Integrating circularity in the design of future-proof retail spaces

Urban areas are major contributors to CO2 emissions and waste, with redevelopment activities further intensifying their environmental impact. The current gradual shift from physical retail to e-commerce is expected to exacerbate this trend, potentially leading to significant conversions of vacant retail spaces and increased urban waste and energy use. Adopting a circular economy approach - emphasizing efficiency, waste reduction, and decarbonization - can support sustainable urban development, particularly in the event of such transformations. This requires designing retail spaces with flexibility and modularity, though such approaches may involve higher costs. This study proposes a method to evaluate the economic and environmental impacts of various design options, including adaptable, circular economy-compliant designs, under future demand uncertainty. The proposed method is applied to an example retail space in Milan for demonstrative purpose, with findings, limitations, and recommendations presented for its future integration into the Real-option analysis to improve the long-term design evaluation of retail spaces.