Two thirds of UK retailers turn to secondary revenue methods to survive
Secondary revenue options are being used by more than two thirds of UK retailers as a means of maintaining their finances, new research has revealed.
According to the British Retail Consortium and Webloyalty, it is claimed the move comes at a time of unprecedented pressure on financial margins.
Their Beyond the Core report found that secondary revenue options are increasingly commonplace, while 18% of retailers report that at least one fifth of their revenue comes through such streams.
The selling of advertising space, offering credit alongside reward programmes, affiliate marketing, and cross-selling extra products and services were among the secondary revenue methods used.
Larger firms were found to be taking advantage of these methods most, as 22% of firm with a turnover of more than £1 million were generating at least 20% from secondary sources.
Whereas firms with a turnover of £100 million or more used an average of seven ancillary methods to generate revenue, those with a turnover of £100,000 or less used only four.
The report suggests that remaining profitable has proved tough for retailers of late, which is why a growing number have looked for alternative methods to boost their revenues.
An unpredictable marketplace in the face of Brexit, high delivery costs and the outlay associated with ecommerce channels have all put pressure on the bottom line.
Acting quickly at any sign of difficulty is essential, as it provides more time for insolvency practitioners and other financial support to find viable solutions.
Businesses also need to ensure that any secondary revenue strategies are both relevant to the brand and are implemented in the right way in order to maximise potential income.
Staying competitive is key for retailers, especially in crowded markets and when key products are increasingly selling for less.
By Phil Smith