70 per cent of retailers are now generating revenue from non-core sources.

The number of retailers diversifying their income streams beyond non-core product sales to boost profit margins has risen year on year, new research by Webloyalty has revealed. Known as secondary revenue, retailers have expanded their offerings beyond their traditional product lines, following the successful adoption of similar practices in the airline industry.

70 per cent of retailers are now generating revenue from non-core sources, with 46% of retailers generating more than 10% of revenue through secondary income streams – up from 36 per cent a year ago. In an increasingly competitive environment, the Webloyalty Beyond the Core II report highlights how retailers are seeking new strategies to stay profitable and boost the bottom line.

As the first benchmarking study of its kind, the research was initially launched in partnership with the British Retail Consortium in 2017. Now in its second year, it explores how secondary revenue has become common practice, with retailers increasingly becoming savvy about how they can monetise their websites and customer bases.

With the number of retailers issuing profit warnings reaching a seven-year high in the first three months of 2018, the research of 100 retailers found that income diversification is growing in importance – now being considered very or extremely important by 29 per cent of retailers, up from 13 per cent just last year. Providing a cost-effective way to add resilience and boosts to profit margins, it’s unsurprising that secondary revenue continues to build momentum. For companies diversifying their income streams with a defined secondary revenue strategy, the report found 75 per cent of businesses experienced a growth in profit margins, providing clear evidence of its commercial success.

Taking various forms, secondary revenue sources include advertising, affiliate marketing, cross-selling additional products and services, and loyalty and reward programmes that provide additional revenue. Beyond the Core II found that the most utilised methods of secondary revenue are advertising (30 per cent) and internal loyalty and reward programmes (29 per cent).

Richard Piper, Director, Webloyalty Northern Europe, commented: “In today’s competitive marketplace, retailers of all sizes are experiencing significant industry landscape changes, it’s important for all retailers to be smart about maintaining and importantly, increasing their profitability.

“With secondary revenue streams proven to have a positive effect on profit margins, retailers should introduce a dedicated secondary revenue strategy that can fit within and support the overall marketing strategy to ensure business success and resilience.”

Sharing her views on secondary revenue streams that are derived from the intelligent use of data and loyalty programmes, Edwina Dunn, CEO of Starcount and co-founder of Dunnhumby, said “Companies just need to get started... it needs to be at the forefront of thinking. The CEOs who take secondary revenue seriously are the ones that will ultimately be successful.”

For more information and to read the report in full, please visit