What: Leading retailers achieve superior performance by transforming into data-driven platforms, integrating marketplaces, retail media, and B2B services.

Why it is important: The emergence of new revenue streams is creating a growing performance gap between digital leaders and laggards in the retail industry.

Leading traditional retailers are reinventing themselves as data-driven business platforms by integrating online marketplaces, retail media, data monetisation, and B2B digital services. This transformation is driving sustainable growth and competitive advantage, with top-quartile retailers significantly outperforming the industry's five-year TSR (16% versus 9%). Approximately one-third of this outperformance comes from new revenue streams. The combination of these initiatives creates a powerful business flywheel, where each element reinforces the others, enabling core business growth and increased profitability. Success requires excellence in core shopping missions, expanded offerings through e-commerce and marketplaces, traffic monetisation through advertising and data insights, and reinvestment in core operations. While larger retailers can experiment broadly, mid-sized and smaller retailers should focus on specific initiatives like retail media or accelerated online operations.

IADS Notes: The transformation of traditional retailers into data-driven business platforms represents a fundamental shift in retail strategy. According to Forbes' March 2025 coverage, retailers are rethinking their approach to retail media and shopper marketing, with 70% of retail media spend being diverted from traditional advertising channels. BCG's February 2025 analysis revealed that only five economies are fully AI-ready, highlighting the critical importance of technological infrastructure in retail transformation. Inside Retail's February 2025 report showed how Asian retailers are leading this evolution, with major players like Central Retail investing $665 million in AI integration and ecosystem development. Inside Retail's March 2025 coverage emphasised how 71% of consumers now expect personalised interactions, driving retailers to develop more sophisticated digital capabilities. This convergence of new revenue streams, technological innovation, and changing consumer expectations is creating a clear divide between digital leaders and laggards, with top-performing retailers generating significant value from these new business models.

How new revenue streams are transforming traditional retail