The European retail ecosystem is undergoing a profound transformation driven by digitalisation and sustainability. SME retailers, which form the backbone of the sector, face increasing pressure to adapt to evolving consumer preferences, regulatory requirements, and economic challenges. This study, commissioned by the European Commission, examines the twin transition of SME retailers by analysing key trends, barriers, and opportunities associated with the adoption of digital and green solutions.

Through an extensive survey, desk research, and case studies, the study identifies major external and internal drivers facilitating this transition, such as shifting consumer behaviour, the availability of financial support, and innovative business models. At the same time, it outlines critical barriers, including regulatory complexity, financial constraints, and operational challenges.

A key component of the study is a compendium of 20 success stories from retail SMEs across 16 EU Member States that have successfully navigated the twin transition. These cases showcase innovative strategies in digital adoption, sustainability practices, and customer-centric transformations, providing valuable lessons for other businesses.

The findings contribute to the European Commission’s #RevitaliseRetail initiative, which promotes knowledge-sharing and best practices among retail SMEs, policymakers, and other stakeholders. The study also feeds into the transition pathway for the retail ecosystem, supporting policy efforts aimed at fostering a resilient, sustainable, and competitive retail sector in Europe.