The retail industrial ecosystem, the largest in the EU in terms of gross value added (€1.5 trillion), employment (almost 30 million people), and number of firms (5.4 million), is undergoing significant transformation. This report, part of the European Monitor of Industrial Ecosystems (EMI) initiative, analyses the ecosystem's trajectory in green and digital transitions.

Retail spans a broad set of subsectors, from food and clothing to electronics and furniture, and includes both online and offline business models. SMEs dominate the ecosystem, though the EU is also home to several global retail giants.

The green transition in retail remains in its early stages. Startups are increasingly contributing to environmental innovation through recommerce platforms, sustainable packaging, and circular business models. Yet, a large share of SMEs allocate minimal turnover to eco-friendly technologies. Notably, only 14% use energy-saving technologies, and uptake of advanced options like carbon capture remains low.

Digitalisation has made more headway, with 91% of surveyed SMEs acknowledging its importance and 42.6% having increased investments in digital technologies over five years. Key trends include e-commerce expansion, omnichannel strategies, and growing use of cloud technologies, big data analytics, AI, and IoT. However, integration challenges persist, and uptake of immersive technologies like AR/VR is limited.

The report draws on diverse data sources, including startup and investment databases (Crunchbase, Net Zero Insights), LinkedIn, and job advertisement analysis. It maps venture capital trends, scaleup dynamics, and skill requirements, and benchmarks EU performance against global peers like the US and China.

The findings emphasise the dual imperative for retailers to embrace sustainability and digital innovation to remain competitive in an evolving marketplace.