Industry
Retail
Omnichannel CX and Intelligent Innovation – The Future of Retail
HIGHLIGHTS
- Sustainability has moved beyond being a compliance requirement and a means to enhance reputation; it is now a core driver of growth, customer trust, and long-term business resilience for retailers.
- By embedding sustainability into data, platforms, and everyday decision-making, retailers gain tangible benefits, including operational efficiencies, waste reduction, and improved supplier and customer engagement.
- Technology-enabled sustainability, powered by accurate data, integrated systems, and intelligent insight, turns regulatory pressure into competitive advantage and measurable business value.
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Changing retail landscape and the sustainability imperative
In today’s retail landscape in the UK, businesses face several complex challenges that are difficult to prioritise.
The challenges range from rising costs, food inflation, and pricing pressures to shoplifting, labour shortages, and growing cybersecurity risks.
Sustainable practices help retailers tackle these challenges and ease the pressure because they help lower costs, improve efficiency, support compliance, and strengthen customer trust.
Sustainability, therefore, is no longer just a “nice-to-have” requirement. It has become a core strategic imperative, driven by government legislation and increasing consumer expectations.
UK food retailers are under pressure to operate responsibly, transparently, and competitively while ensuring cost efficiency and customer trust.
The TCS Global Retail Outlook Iindicates that sustainability and ESG integration in retail is advancing via renewable energy adoption, circular economy initiatives, and artificial intelligence (AI)-powered emissions optimisation. It shows that retailers are prioritising sustainability and environmental impact reduction as part of their AI-driven initiatives.
The eco-conscious customer is actively choosing retailers that demonstrate real commitment to tackling sustainability challenges through their actions. This flips the sustainability agenda from being an aspirational business objective to a genuine commercial requirement. Any failure to appeal to customers risks loss of footfall, loyalty, and brand image.
Sustainability is not just about doing what’s right; it’s about building future-ready, resilient, and trusted retail businesses. The ability to measure, track, and communicate sustainability initiatives and their progress is now a key differentiator for brands.
Why sustainability matters
Retailers today need to carefully balance an agenda that meets the expectations of two unforgiving stakeholders:
- Governments and regulators, who want compliance, measurability, traceability and accountability.
- Customers and communities, who are passionate about sustainability and demands action, trust, transparency and value for money.
Neither group is willing to accept excuses. Retailers risk losing both trust and market share if they cannot clearly communicate progress on key metrics, including traceability, carbon emissions, and packaging reduction.
The retailer journey
A solid foundation built on accurate data is critical for improving sustainability metrics.
It’s fair to say that complex data issues in multi-million-pound businesses get very little sympathy from both government and customers. But let’s drill into this further, starting with compliance and reporting.
So, why is data a challenge? Legislation, and indeed customers, quite rightly expect large businesses to overcome operational complexities given their scale, expertise, and access to resources. However, the complexity and scale of the business create numerous challenges. Large retail organisations handle thousands of products, vast numbers of suppliers, and numerous business processes with data scattered across systems that don’t speak to each other. This complexity makes reporting slow, fragmented, and unreliable.
Common challenges:
- Traceability: Products are sourced globally, with no universal format for recording emissions, origin, or labour practices. Data is often stored in different systems, manual spreadsheets, or not at all.
- Carbon emissions: A vast majority of emissions occurs in functions outside a retailer’s control—during production, transportation and post-sale operations. A lack of standardised reporting compounds the problem.
- Packaging reduction: Packaging often consists of multiple components (cardboard, film, shrink wrap), and retailers have limited visibility into how customers dispose of these materials. Managing the end-to-end journey of a product is undeniably complex, but regulators and customers expect retailers to solve it.
- Reputation and regulatory risk: Sustainability is arguably the most important area where retailers need to be bold and move fast, rather than being overly cautious. Yet, many retailers remain hesitant due to concerns over data integrity and the risk of greenwashing, which can impact reputation negatively. More than 50% of customers say they’d boycott any retailer found to greenwash. Financial penalties are also potentially crippling and can reach 10% of annual revenue.
Technology as an enabler
Manual data handling is neither sustainable nor scalable.
Technology provides the necessary capabilities for credible ESG reporting and enables retailers to move from fragmented information to actionable insights.
The key technology enablers of a robust system for sustainable practices include:
- Cloud platforms: They help to link source systems and consolidate data into one place.
- Data tools: They organise and standardise data and enable the consistency needed for reporting.
- Suppliers’ portals: They collect traceability data within the sourcing process.
- Automation: It reduces time and improves accuracy in compliance reporting.
While looking to enhance sustainability measures, it’s important to align ambition with pragmatic investment that overcomes the unique challenges of each retail business and makes the most of available systems and budget. This can be ensured in three stages:
- Stage 1: Start with existing systems. Foundational data tools and structured processes are a must for accurate emissions, packaging, and energy insights.
- Stage 2: Maximise supplier data collaboration. Standardised data formats and shared reporting structures accelerate traceability and reduce manual effort.
- Stage 3: Invest in technology solutions.
- An ESG software that offers–affordable platforms with pre-built dashboards and provides legislation-aligned outputs.
- Cloud-based solutions to link core systems (product specs, logistics, sales) for centralised visibility.
- AI-powered tools to help churn through the often-overwhelming volume of data with added benefits of spotting data inconsistencies. This improves reporting accuracy and model scenarios to facilitate insightful decision-making.
The common point of failure
Deep data insight is a must to unlock true business value, However, any sustainability technology investments are positioned as just compliance costs rather than as strategic value drivers, causing them to falter.
Since sustainability spans multiple functions and competes with other business priorities, the investment thesis must extend beyond conforming with regulatory requirements to capture commercial upside and long-term business advantage.
Use cases: Turning sustainability into value
Details of data platform investments alone will not sway commercial stakeholders; the narrative must be linked to growth, efficiency, and competitive advantage to convince them.
That’s why pitching sustainability investments as a compliance requirement alone will not suffice. The business case must be anchored in tangible commercial benefits and strategic outcomes to make it compelling and
resonate with decision-makers. It must be clearly spelt out that clean, connected data doesn’t just ensure regulatory requirements; it also unlocks competitive advantage.
Here are a few high-impact use cases:
Insightful and accurate data helps identify automation opportunities, inefficiency hotspots across processes, streamling transport facilities based on store locations, and, importantly, optimise resource.
Indicative benefits:
- About 30% reduction in energy costs via accurate monitoring
- 15% improvement in logistical efficiency with carbon-aware routing and scheduling
- 25% faster fault detection via observability-linked dashboards
Verified sourcing metrics can support buyers to develop range strategies with suppliers that target key metrics and encourage the inclusion of low-impact products.
Indicative benefits:
- Supplier compliance via measurable year-on-year improvement
- Strategic cross-category targets to create cohesive environmental, social, and governance (ESG) narratives.
- Scorecard approach to deliver multiple targets, including packaging reduction, emissions, water usage.
Boost trust, deliver customer satisfaction, and improve brand image via transparent reporting
Indicative benefits:
- 73% of customers prefer brands with transparent and visible metrics
- Up to 25% improvement in brand recall when ESG dashboards support marketing messages
- Increased customer retention and social media engagement
From packaging options to improved forecast, , data insights can support a strategic approach to reducing waste and save cost by identifying inefficiencies
- more than 20% reduction in manufacturing waste enabled by digital tracking
- Up to 40% reduction in food waste by using predictive analytics
- Reduced packaging waste through improved lifecycle visibility
- Improved recycling rates through real-time dashboards
Data-driven analytics set sustainability benchmarks from the very beginning of a new product development cycle
Indicative benefits:
- Strategic prioritisation of range refreshes that give greater benefit
- Higher margins on sustainable products with premium pricing
- Greater customer loyalty for both individual products and the retailer
It may seem a stretch but collating cross-functional information into impactful dashboards can help engage the whole business in achieving the overall vision. The dashboards help translate vision into action. While customers tend to be the focus, dashboards targeted at business employees improve motivation and productivity.
Indicative benefits:
- 25 to 40% increase in employee understanding of overall sustainability goals
- Up to 30% faster adoption when teams can see real-time progress
- 20-35% improvement in cross-departmental collaboration scores
- 15-20% reduction in duplication of effort as proper structured data streamlines processes and workflows
Conclusion
Amid competing priorities, retailers should be careful not to push sustainability objectives to the backburner.
They will end up paying a heavy cost due to any inertia in initiating sustainability measures as customers will start walking away, compliance gaps will begin to widen, and brand credibility will start eroding.
Retailers are increasingly looking at technology to realise the aim of making sustainability a strategic business lever.
Businesses that understand the potential of integrated platforms, cross-functional dashboards and AI-powered insights, and don’t dismiss sustainability as a compliance requirement, will unlock strategic benefits, reduce costs, and win customers.
Those who act now will build operational resilience, strengthen customer trust, unlock new commercial opportunities, and lead the transition to a more transparent and responsible future.
Sustainability isn’t just an operational metric anymore—it’s a boardroom priority and a powerful differentiator.