Retailers today are being pulled in two different directions. On the one hand, there’s growing pressure from both consumers and regulators to step up on sustainability. On the other, margins are tight, and only getting tighter in a volatile, price‑sensitive market.
Our global research with consumers and senior executives in Consumer Products and Retail organizations shows 80% of consumers want to make a difference in saving the planet, yet cost‑of‑living pressures mean shoppers are increasingly unwilling to pay a green premium above ~5%.
Head of Retail at Capgemini Invent.
It’s a complex balancing act—one that requires an understanding of where sustainability and profitability are at odds, and where they can be mutually reinforcing.
The challenge (and opportunity) for retailers is to make lower‑impact choices the easy, obvious option for the mainstream customer, without losing sight of commercial goals.
Building trust through education and transparency
Trust is a primary driver of loyalty and retention, but when it comes to sustainability promises, many retailers are facing a credibility gap. Our 2025 consumer data shows almost two‑thirds of shoppers report insufficient information to verify sustainability claims and over half say they do not trust those claims.
Clearly, consumer trust can’t be won with unsubstantiated promises. Brands that go the extra mile to provide tangible proof, for example with clear labelling, accessible disclosures, or human stories about sourcing, will earn the trust they need to differentiate and price with confidence.
Building robust transparency through audits, certification, and data collection comes with its own costs, and more visibility can expose higher true costs such as traceable materials and living wages. In the short term, that can compress gross margins.
But in the long term, credible transparency pays off: it reduces returns and customer service issues, lowers the risk of regulatory actions, supports premium tiers or membership benefits, and can also help guide customers to durable products with lower lifetime servicing costs.
There are a number of relatively simple ways to improve transparency for consumers. Retailers can standardize a few plain‑English metrics per category to minimize label complexity and packaging rework.
Digital product passports using QR codes or NFC tags allow customers to access more in-depth, up-to-date details about a product’s journey, certifications, emissions, care, resale value, and end‑of‑life options.
Transparency can be staged in waves, starting with high‑volume SKUs where reduced returns and higher customer satisfaction can help offset the costs within a season or two.
Using AI to engage consumers
Data science and AI are powerful tools for quantifying trade-offs and finding win-wins: modelling demand, cutting waste, and personalizing lower-impact choices without sacrificing value for money.
That said, not every AI use case delivers instant ROI. Getting the most from these tools takes upfront investment in data infrastructure, model operations, and governance.
But the potential payoffs are big: forecasting, allocation, and dynamic pricing reduce shrink and markdowns, while transport route optimization lowers energy and fuel costs.
AI can also fuse procurement, logistics, and supplier data to estimate embedded emissions, flag risks like deforestation exposure, and surface verifications directly on product pages.
Natural language models add another layer of value: they can scan claims against evidence and standardize language to meet internal and regulatory thresholds., and power conversational assistants embedded in apps to explain sourcing, decode labels, and tailor care tips, to enhance customer understanding.
Incentivizing behavior change
For conscious consumption to become mainstream, sustainable behaviors need to be affordable, accessible, and genuinely worth it for everyday shoppers. Retailers have a unique opportunity to design incentives that not only encourage environmentally responsible choices but also align with commercial goals.
Rather than relying on blanket discounts for eco-friendly products (which can chip away at profit margins and confuse value perception), there are more targeted approaches that strike a balance of value with impact.
Repair and resale services not only extend product life but also create new revenue streams and deepen brand loyalty, while reward programs aimed towards lower-impact purchases can foster repeat business and long-term engagement.
Community-based incentives also hold real promise. Retailers can initiate local sustainability challenges or group rewards that encourage collective action, such as neighborhood recycling drives or shared goals for reducing packaging waste.
These initiatives not only amplify impact but can also strengthen customer relationships through shared purpose. By weaving sustainability into every step of the customer journey and making responsible choices both fun and rewarding, retailers can drive behavior that benefits both the planet and their bottom line.
Looking ahead: the business case for sustainability
The traditional model of mass consumption is giving way to something more mindful. Today’s consumers expect transparency, circularity, and accountability—and they’re rewarding the brands that deliver.
Sustainability‑marketed products are already punching above their weight when it comes to CPG growth, despite a minority market share.
Of course, not every retailer is starting from the same place. Some already have mature sustainability programs, while others are just beginning to embed environmental and ethical considerations into their operations. Regardless of the starting point, progress requires coordinated action across the organization.
That means empowering teams with the skills and incentives to champion sustainability in daily decisions, and aligning cross-functional processes to support transparency, circularity, and responsible sourcing.
Equally, it also means investing in data infrastructure that enables measurement, verification, and reporting of impact, as well as modernizing systems to support dynamic labelling, AI-driven forecasting, and customer engagement around sustainability.
None of this happens overnight. The goal is not perfection from day one, but steadily building momentum. Retailers who develop AI-powered capability and iterate with commercial discipline will be best positioned to protect margins today while earning trust for tomorrow.
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