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Retailers now sell more than just their own products

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Stores and more

In the news

•

Trying out the clinical-trials business. Some large US retailers have been in the pharmacy business for years, but recently, a handful of them have ventured into the clinical-trials space. They’re recruiting participants for clinical trials, making participation more convenient (for instance, by operating clinical-trial centers at their facilities or by offering virtual and in-home options), and developing digital tools to help increase diversity among clinical-trial participants—which is important given that among the roughly 5% of the US population who participate in trials, 75% are White. [Drugstore News]

•

Retailers as media companies. Retailers have a huge audience, so why shouldn’t they sell advertising in their stores and on their websites? Indeed, this year could mark a turning point for retail media networks (RMNs): analysts expect the leading RMNs to grow their revenues by more than 40% in 2023. Retailers are raising their game in the advertising business by creating more ad formats and expanding their ad sales teams. And RMNs could fare relatively well even in a recessionary environment, as advertisers look to spend their (likely reduced) ad budgets on targeted, measurable media. [Modern Retail]

“We tested customer willingness to buy services from retailers, and 60%, on average, stated that they would. Furthermore, high-income customers are more willing to switch to retailers.”

On McKinsey.com

•

Beyond traditional retail. As retailers face pressure to grow profitably, getting into the services business is an attractive option. Retail-adjacent services—such as consumer finance, healthcare, or travel services—have higher profitability and growth potential than traditional retail does. Furthermore, as McKinsey partner Marco Catena explains in a recent webinar, a survey of more than 6,000 European consumers showed that many are dissatisfied with their current service providers and would be willing to switch to a retailer’s service offerings.

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A new playbook. By offering new services, retailers can start building ecosystems that attract and retain customers. But if you’re a retailer, which consumer services (such as credit cards, vacation packages, or pet grooming) or B2B services (such as advertising) should you offer? Three factors are useful to consider: the unmet needs of your customer base, a service’s profitability or monetization potential, and your brand values and capabilities. Learn more about the new playbook for retail success.

See what else is in store

— Edited by Monica Toriello, editorial director, New York

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:09 - 7 Feb 2023

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Retailers now sell more than just their own products

Stores and more

In the news

“We tested customer willingness to buy services from retailers, and 60%, on average, stated that they would. Furthermore, high-income customers are more willing to switch to retailers.”

On McKinsey.com