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Climate Action Roadmap

Climate Action Roadmap

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The future: trends shaping the retail industry

The retail industry is a driving force in the economy, makes a massive contribution to the fabric of society and is at the heart of communities across the country. It is a hotbed of innovation and the pace of change is extremely rapid. Looking back just a small handful of years, the scale of change seen in UK retail was unimaginable. The growth of online shopping, and more recently COVID-19 have reshaped the UK retail industry. 

In the short-term, the industry is already adapting to COVID-19 and Brexit, bringing with them changes to shopping patterns, customers needs, operational practices, supply chains and regulation. The sustainability landscape too will continue to evolve rapidly, as new technologies, initiatives and regulations come into play, and climate impacts increase in severity and frequency across the world. 

Over the longer term, the industry will undergo significant transformations that can be harnessed to speed decarbonisation of the sector. These include: 

Digitisation: There will be massive growth in the digitization of the economy driven by the implementation of 5G technology. There are potential for disruptive changes to the way customers shop, the information retailers have available to tailor products and services, and changes to shopping patterns. 

Online: The tremendous growth in online sales will continue, a transition accelerated during the coronavirus pandemic. Online shopping experiences are likely to merge with in-store retail. Technologies including augmented reality will allow for enhanced shopping experiences. The on-going changes to shopping patterns and channels will drive significant shifts in the retail footprint, supply chain and operations. 

AI: Retail is on the cusp of an Artificial Intelligence revolution. The use of AI in retail will accelerate dramatically, with intelligent automation allowing retailers to improve demand forecasting, supply chain planning and customer engagement. AI offers retailers significant potential to personalise and customise experiences for customers. It also will support efficient collation, analysis and use of emissions data across the retail value chain. 

Customer needs: How the retail industry meets ever-changing customer needs will influence the greenhouse gas emissions from the sector. Trends are likely to include:

•   Convenience: demand for products and services that are convenient to busy lives, including changing expectations around pace of delivery of products.

•   Experience: Demand for products and services that provide a unique customer experience.

•   Payment: Flexibility and innovation in payment options for customers, including the expanded use of new digital payment channels.

•   Personalisation: Tailoring of products including food, fashion and beauty around specific customer needs (e.g. DNA or sizing) provides opportunities to engage people very specifically in the sustainability of the products they buy.