BrazilFour developments driving a more sustainable retail industry in 2025
Over the past years, sustainability and circularity have grown into one of the top strategic goals for retailers. That focus is showing no signs of slowing down – experts from Supply Value share four trends and developments that are set to shape the sustainability drive in the retail industry in 2025.
1. Increasingly Tough & Transparent Reporting Standards
Retailers face growing pressure to demonstrate sustainability commitments due to changing regulations & requirements, such as the US SEC climate disclosure requirements and the European CSRD. Because of this, international retailers struggle to comply with diverse and evolving laws and regulations in different countries, leading to operational complexity.
In addition, implementing stringent reporting standards can be costly and complex, particularly for smaller retailers lacking resources.
2. Continued Rise in Second-Hand and Rental Services
As consumers increasingly seek value and sustainability, the market for second-hand goods and rental services is experiencing significant growth. With the global rental market expected to reach approximately $2 billion by 2026 and the resale market, especially in the luxury sector, expanding rapidly, retailers must adapt to these shifting consumer preferences.
However, the variability in condition, size, and style of second-hand and rental items complicates inventory management, making it difficult for retailers to maintain accurate stock levels. In addition to inventory management complexity, maintaining brand integrity is crucial for retailers entering the second-hand market, requiring rigorous quality control and clear communication about item conditions to manage consumer expectation.
3. Increased Integration Between Technology and Sustainability
As the retail industry evolves rapidly due to technological advancements and changing consumer demands, there is a significant rise in the integration of technology, particularly artificial intelligence (AI), with sustainability efforts.
AI is becoming a crucial tool for enhancing sustainability, addressing ethical considerations, and meeting consumer preferences for eco-friendly practices. Through the effective integration of AI, businesses can not only improve operational efficiencies but also foster sustainable consumer choices and enhance their commitment to sustainability.
But, as AI systems process large amounts of sensitive data, it raises concerns about data security and privacy, particularly regarding compliance with regulations such as the GDPR. Moreover, gaining consumer trust in AI-driven sustainability recommendations can be challenging due to concerns about transparency and accuracy, leading to scepticism about AI’s role in decision-making.
4. Increased Competitor Collaboration for Sustainability
In response to complex sustainability challenges, companies are increasingly collaborating with competitors to address issues like ecological impact, safety, and transparency. This trend is driven by the need to meet evolving consumer expectations and regulatory demands while reducing reputational risks, lowering operational costs, and sharing resources and expertise.
Collaborating on sustainability initiatives requires retailers to align diverse objectives while managing sensitive information and input from various stakeholders. The challenge lies in balancing competitive interests, building trust, and ensuring adherence to shared standards.
Conclusion
In the fast-paced world of retail, sustainability and circularity are no longer optional but essential. As consumer expectations increasingly go green, retailers are forced to reassess their business models, provide greater corporate responsibility and transparency, meet mounting regulatory burdens, and adapt to a more sustainable future.
While there are substantial challenges ahead, the transition to a more sustainable model also presents opportunities for innovation, growth, and competitive advantage. Companies that can adapt and embrace sustainability will emerge stronger from these changes.
