Study on the twin transition of SME retailers

The retail ecosystem is experiencing significant changes driven by technological advancements and shifting consumer behaviour. In retail, digitalisation is not only modernising operations but also transforming the relationship between businesses and consumers. To adapt to this evolving landscape, retailers are embracing digital technology, implementing multi-channel retailing and offering customer-centric innovations. Additionally, both businesses and consumers are becoming more conscious of their environmental impact, leading to efforts to improve environmental performance and more sustainable shopping choices. The COVID-19 pandemic and recent political and economic shocks have further intensified these changes, presenting challenges, but also opportunities for the retail ecosystem. In such economic downturns and during transitional periods, small retailers, as many other small and medium-sized enterprises (SMEs), often face difficulties. To survive and remain competitive, they need to demonstrate agility, resilience, be able to adopt new technologies and potentially reinvent their business models. In light of these challenges, it is crucial to support retail SMEs in adopting digital and green business solutions to help maintain their attractiveness and viability. This study focuses on identifying and collecting success stories from small retailers that have embraced such solutions and transformed their business. It highlights the lessons learned, analysing both the drivers and the barriers of such transformation. The inspiration from successful transformation stories can help retail SMEs recognise the potential benefits of the digital and green transition and realise the practical steps they need to take to embrace it. The study is done within the framework of the European Commission #RevitaliseRetail initiative which promotes knowledge and best practices exchange among retail SMEs, associations, local authorities, policymakers and civil society. The initiative builds upon the European Commission Communication "A European retail sector fit for the 21st century" and the "Facing the Future: Practical guide for fostering the revitalisation and modernisation of the small retail sector" both published in 2018. The study also provides valuable insights which will feed into the green and digital transition pathway for the retail ecosystem, co-created by the European Commission and retail ecosystem stakeholders.