The news: The UK department store giant partnered with JPMorgan-owned robo-advisor Nutmeg to launch investing services, per AltFi.

Product zoom in: Nutmeg is powering the underlying infrastructure for John Lewis customers to access a junior or a stocks-and-shares individual savings account (ISA) or a general investment account.

Why launch investing? John Lewis is building out its financial services to reduce reliance on its suffering brick-and-mortar retail model.

The department store has 34 shops left nationwide, having closed 16 of them after the pandemic greatly reduced foot traffic on high streets. But even though the UK has come out of lockdown, the pandemic’s legacy will carry on: Insider Intelligence expects further store closures as customers continue to make more purchases online, just as they’ve grown used to doing over the past 18 months. This year, the gap between ecommerce and physical retail will shrink to 37.5% and 62.5% respectively, per our UK Ecommerce Forecast 2021.

At the same time, a recent John Lewis survey of its customer base found that 72% would consider investing, but nearly 60% do not know where to start. With its robo advisory solution, the department store is adapting to customers’ changing demand and opening a new revenue stream for its existing fintech arm—which already offers credit and insurance services. It also brings it closer to its target of deriving 40% of its profits from sources outside of retail by 2030, per Altfi.

Looking ahead: John Lewis’ expansion highlights a potential shift in the face of retail investing, raising the question of where financial firms will end up within the reimagined supply chain. Some examples in the US offer a clue to where the UK may be headed:

• API brokerage platform DriveWealth lets global brands add investing options to loyalty rewards toolkits, such as topping every customer credit card swipe with fractional shares of their stock.
• Walmart is building its own fintech offering, and it may even “reward consumers who come to the store every week to buy groceries with Walmart stock or a wider portfolio,” CEO Bob Cortright said in an interview with Insider Intelligence.

UK retail giants offering investing could become valuable allies for financial incumbents defending themselves from fintech disruption. In December 2020, the FCA stated it expects that all major UK retail banks will offer automated investing within the next few years. However, UK banks have so far engaged in a series of unsuccessful attempts to build their own digital offshoots. Joint robo-advisory offerings in partnership with trusted retail brands like John Lewis could be more successful: These brands tend to enjoy higher consumer trust than banks and are capturing a trove of data on their customers’ shopping habits that banks could use to better tailor fintech offerings.