Drivers and barriers of the digitalization of local owner operated retail outlets

A disruptive innovation process in the retail industry threatens the very existence of Local Owner Operated Retail Outlets (LOOROs). The traditional business model of LOOROs is challenged by digitalization pressure imposed by online and offline competitors on the one side and by changing shopping habits of their customers on the other. Despite all digitally-enabled opportunities to regain competitive power, LOOROs still hesitate to adopt digital tools and applications. The aim of this study is to examine drivers and barriers of the digitalization of LOOROs to identify possible trigger points that can promote their digital development. Therefore, we conducted a survey among 223 LOORO owners from 26 cities in Germany. The results indicate high uncertainty among SME retailers about what to do and where to begin the path towards digitalization. LOOROs positive attitude towards digitalization is the only driver. Furthermore, LOOROs face manifold barriers, including lack of available resources, low perception of external pressures, low intentions to use and low current use of digitalization. Our findings reveal that the use of digital tools and applications for administration and marketing could work as a suitable trigger to promote digital development and are promising starting points for LOOROs.