Retailers face pressure for transparency as supply chains evolve

Global retail supply chains are under increasing scrutiny as new regulations and shifting consumer expectations drive the industry towards greater sustainability and transparency. Changes to tax rules and ongoing climate policy debates are putting pressure on fast-fashion business models, signalling a significant transformation in how goods move from production to consumer.

Regulatory landscape

The removal of the United States' de minimis exemption has had a marked impact on operators like Shein and Temu. This rule change closes a loophole that had previously enabled the shipment of individual items at low cost. The move is already having an effect, with DHL Express reporting a 32% drop in billed weight for US-bound parcels compared to the previous year. There are indications that the UK may follow suit with its own tax crackdown in upcoming fiscal policy.

This shifting environment coincides with broader international action on climate. Measures such as Border Carbon Adjustments and the Corporate Sustainability Due Diligence Directive (CS3D) are putting a focus on the carbon intensity of imported goods and the responsibility of businesses to document supply chain impacts. The fashion industry, which committed at COP24 to achieving net-zero emissions by 2050, is under particular pressure.

Operational disconnect

Despite ambitions at board level, many companies face challenges translating sustainability goals into operational changes. Survey results highlight this execution gap: 66% of UK businesses have made transition plans for climate risks, but Manhattan Associates' research finds that just 28% of UK executives consider sustainability performance in day-to-day operational planning, even as 57% report full CSRD compliance.

"There's a clear disconnect between the corporate support for sustainability and the reality of supply chain operations on the ground. Many businesses are still operating with systems that can't provide the necessary insight and visibility," said Pieter Van den Broecke, EMEA Leader of Supply Chain Strategies, Manhattan Associates.

Retailers increasingly anticipate stricter sustainability compliance requirements, with 87% expecting challenges to escalate. The ability to meet these demands hinges on digital infrastructure capable of providing comprehensive insight. Without unified data, companies struggle not only to report emissions but also to optimise logistics and verify compliance with new environmental directives.

Efficiency and waste

Pursuing sustainability requires both system-wide visibility and operational agility. Waste reduction can only be tackled by improving efficiency across the supply chain, from optimised delivery routes to smarter returns management. Data-driven decisions in these areas depend on digital tools that unify warehouse, transport and inventory management.

Reverse logistics are a particular focus, as traditional practices of consolidating returns in a central location often result in unnecessary transport emissions and delays returning goods to sale. Intelligent systems can enable routing based on real-time demand, local inventory needs and environmental considerations.

"The movement of goods is becoming increasingly circular. So, continuing to think about it in a linear way doesn't make sense. Uniting transport, warehouse and order management systems is an essential facilitator for the future of retail, giving businesses the power to actively and intentionally improve the sustainability of their operations at the root of their services - systematically removing waste and (importantly) carbon from their supply chains," said Van den Broecke.

Consumer trust

As regulatory standards tighten, transparency is becoming a differentiator in customer relationships. Providing consumers with more control, such as options to modify or cancel orders prior to shipment, can strengthen trust and improve sustainability outcomes. Improved data-sharing processes can also mean products are returned to the market more rapidly, benefiting both commercial and environmental objectives.

Supply chain visibility has moved from a back-end technical concern to a critical element of brand perception, as consumers and regulators alike now expect openness around product origins and environmental impact.

"The COP meetings are an annual and essential reminder that industries need to lay the groundwork for an intelligent, circular economy. We must not forget that retailers and consumers also have a big part to play in enabling and demanding that positive change too," said Van den Broecke.