Small independent retailers: digitalize or disappear? An empirical study based on dynamic capabilities

Abstract

Purpose

This study analyzes how small French retailers are adapting their front-office to the digitalization of their business environment.

Design/methodology/approach

The qualitative study focuses on dynamic capabilities of 27 independent French retailers, in a wide variety of sectors.

Findings

The digitalization of small retailers does not date from the pandemic health crisis. Small retailers are willing, agile and organized to make controlled progress, ranging from the visibility on social networks to online sales with its specific logistical constraints. Even if their presence on marketplaces is trickier to implement, it represents the culmination of the digitalization process, once their online store has been launched. The digital transformation of independent retailers should be less radical than for large retailers.

Research limitations/implications

By distinguishing between the concepts of adaptive, absorptive and innovative capabilities, this research highlights strong differences between small retailers, that is SMEs, and larger companies. In terms of adaptive capabilities, it confirms that small retailers are not embracing digitalization as a fad, but because of real changes in the market, and particularly in demand. In contrast to large companies, small retailers drive it more around external objectives linked to their intimate knowledge of changing customer behavior (customer centricity). In terms of absorptive capabilities, the success or failure of digital transformation weighs directly on the entrepreneur's shoulders, but is less hampered by technological legacy. Despite interviews only conducted in the Paris region, it converges with professional studies carried out on a larger scale in France. Its widespread use is certainly easier in countries at the same stage of commercial development.

Practical implications

In terms of innovative capabilities, independent retailers need to focus on four key areas: reinventing the in-store experience; increasing visibility on social networks; creating an online store; being present in one or two marketplaces or creating a common platform with other local merchants.

Originality/value

This research is one of the first to analyze the digital transformation experienced by small structures. It draws on the concept of dynamic capabilities, well-suited to technologically and commercially dynamic markets. It puts into perspective studies carried out in other countries on less diversified types of shops. Unlike other studies examining the front office, it does not exclude stores and SEO in marketplaces.