Opportunities and challenges of smart technology for small independent fashion retailers: a reflexive thematic analysis using the technology-organization-environment framework

Abstract

Smart technology has become an increasingly prominent feature in the fashion apparel industry. However, small retailers still face challenges while trying to adopt such innovative smart technologies to increase consumer interaction and sales. By applying the Technology, Organization, and Environment (TOE) framework, the aim of this study is to understand small independent fashion retail owners’ and employees’ thoughts on innovative retail technologies and their reactions to the currently available new technology. A qualitative research method of in-depth interviews with 11 participants working in fashion companies was used. The themes that emerged in this study represent criteria to be met prior to adopting new technology for small fashion retailers, including transparency, consistency, and integration of technology. While there were concerns regarding the cost and timing of adopting smart technology, they all expressed unanimous agreement that these advancements would become the next major trend in fashion retail, enhancing consumer connectivity. In particular, the smart technology they plan to adopt must possess the capability for reciprocity between consumers and the company. This will motivate a resurgence of innovative technologies in the less advanced fragment of small independent fashion retailers. Future research can focus on analyzing how the implementation of new smart technologies affects these types of businesses and their customer satisfaction.

Introduction

With the fast growth of the fashion market, competition has also increased in the fashion industry (Irfan et al., 2019). Additionally, the pandemic has significantly impacted fashion retail, and one of its prominent effects is the plummeted in-store foot traffic (Zhao & Kim, 2021). Customers are now returning to physical stores and reconsidering in-store shopping experiences (Díaz-Martín et al., 2021). Thus, fashion retailers are seeking ways to increase store traffic, attract customers back to their stores, and improve overall customer experiences, which, in turn, leads to an increase in customer loyalty and retention, constituting a major benefit to a retailer’s bottom line (Foroudi et al., 2018). For example, retailers implement entertainment aspects to enhance customer engagement and boost customer satisfaction (Elmashhara & Soares, 2019). This is more accurately described as “Smart Retailing”; specifically, it involves digital, mobile, or immersive experiences (Pantano et al., 2018). For example, virtual entertainment in stores has become a way for retailers to customize the shopping experience to keep customers in the store as long as possible (Jelev, 2017). While the implications of these new technologies have the potential to contribute to the success of businesses, the specific implications can vary based on the types and sizes of retailers, leading to vagueness for firms considering their adoption. Thus, small fashion retailers often are at a disadvantage within this domain; nevertheless, this niche still holds some advantages over their larger, more affluent competition (Gartenstein, 2019).

Smart retail technologies, referring to interconnected store digital technologies to enhance the provision of unique quality service, have revolutionized many aspects of fashion retail (Ogunjimi et al., 2021). For example, ground-breaking smart retail technologies such as the interactive smart mirror and virtual reality became popular in the fashion retail space to provide a personalized shopping experience and enhance customer engagement (Joshi, 2019; Kim & Cheeyong, 2015; Park et al., 2018). These new technologies are fascinating and seem highly promising for both fashion retailers and their customers (Poncin et al., 2017). However, the emphasis on the technological side of innovation can lead to a neglect of customers’ connection to and positive experiences with this technology.

Furthermore, while these types of new technologies are accessible to large fashion retailers (Blazquez et al., 2020; Passavanti et al., 2020), they are not distributed well to the small fashion retailers (Kim et al., 2013). Thus, it is critical to study the opportunities and challenges faced by the small fashion retailers in the US where a small number of giant firms have been dominant for decades, as it will foster a more balanced and resilient economic landscape and develop strategies that can level the playing field and create a more inclusive market. Nevertheless, small fashion retailers continue to grapple with challenges when attempting to adopt innovative smart technologies aimed at boosting consumer interaction and sales (Marikyan et al., 2020). Surprisingly, no specific studies have delved into the opportunities and challenges faced by small fashion retailers in this context. Thus, our research tackles the question, “What are the challenges and opportunities that small independent fashion retailers have when it comes to adopting innovative smart retail technology?”.

In particular, an interactive smart mirror, which is a type of smart retail technology, offers a convenient shopping experience. For instance, consumers can touch and interact with the surface to browse a clothing selection, add items to virtual fitting rooms, view compatible products, compare pricing, and so much more (Beck & Crié, 2018; Lee & Leonas, 2018). Especially, the smart mirror is a key example of smart technology in fashion retail as it becomes more affordable, enhance the customer experience, and create an innovative shopping environment (Vaidyanathan & Hennignsson, 2023), which is the reason we have chosen the smart mirror as an example of smart technology in our study.

Based on this literature gap and research questions, the purpose of this study is to understand small independent fashion retail owners’ and employees’ thoughts on smart retail technologies, particularly their reactions to the examples of two key interactive smart mirrors developed for fashion retail. Furthermore, the study explores the challenges and opportunities these retailers encounter while adopting new smart technologies in addition to these two types of smart mirrors. Accordingly, this study benefits small independent fashion retailers by providing an understanding of the smart technology needs of similar types of fashion retailers and their perceptions; additionally, it provides technology development companies with the necessary insights to reach out to these fashion retailers.

Literature Review

Smart retail technology

Smart retailing is defined as “the intelligent usage of smart technologies to engage consumers in more efficient and satisfying shopping experiences” (Pantano et al., 2018, p. 95). Smart retail technology allows businesses to explore and utilize new methods of understanding and collecting consumer data to create a more efficient retailing strategy (Pantano et al., 2017).

In turn, this makes businesses more knowledgeable about their customers and thus more profitable; however, fashion retailers still face challenges regarding what metrics and predecessors are required to adopt these sought-after smart technologies. In this regard, two factors have been determined to be indicative of how to effectively use smart technologies in this field: the organizational level needs and sales activities (Pantano & Timmermans, 2014). Regarding the organizational level, it requires the development of ad hoc capabilities, changes in knowledge management (e.g., collecting knowledge from consumers and transferring product knowledge into service), and the creation of smart partnerships, both with the consumers and technology providers (Pantano & Timmermans, 2014). For selling activities, the key components of smart technologies include implementing changes in product/service access for consumers (e.g., an assistance tool as an alternative to the physical assistant), carrying out changes in product/service consumption (e.g., high flexibility and customizability of consumption), and developing and maintaining strong relationships with consumers (Pantano et al., 2018). Understanding these key concepts for both the organizational level needs and selling activities is imperative for a retailer to properly adapt to the world of smart retailing and be able to adopt smart technology effectively.

The examples of smart technologies in fashion retailing include, but are not limited to, the following: interactive smart mirrors, radio-frequency identification (RFID), and virtual and augmented reality (VR/AR). First, regarding interactive smart mirrors, shoppers can either use the smart fitting rooms to get assistance and recommendations or virtually try on clothing items without physically changing (Ogunjimi et al., 2021). Second, RFID technology enables real-time inventory tracking, reducing stockouts and overstocking issues (Landmark & Sjøbakk, 2017). It also helps improve the accuracy of stock levels and supports omnichannel fashion retailing. Third, VR and AR technologies are employed by fashion retailers to craft immersive shopping experiences, including virtual fashion shows, interactive product displays, and virtual store tours (Park & Lim, 2023). These types of smart technologies empower businesses to explore and implement innovative approaches for comprehending and collecting consumer data, ultimately enhancing the efficiency of their retailing strategies (Pantano et al., 2017).

Theoretical underpinnings of smart technology adoption

Researchers have studied technology adoption and use in retail from diverse theoretical perspectives more focused on consumer perspectives (Herroro-Crespo et al., 2022). In particular, the technology acceptance model (TAM) (Davis, 1986) and the unified theory of acceptance and use of technology (UTAUT) (Venkatesh et al., Venkatesh et al., 2012) are the two most popular theoretical theories to explain technology adoption at the individual levels. Additionally, the diffusion of innovations (DOI) (Rogers, 2003), which explains the five stages of the innovation-decision process (i.e., knowledge, persuasion, decision, implementation, and confirmation), and the technology, organization, and environment (TOE) framework (Tornatzky & Fleischer, 1990) have been used as important technology adoption models in previous studies (Dube & Gumbo, 2017; Kumar & Krishnamoorthy, 2020). However, most previous studies utilizing TAM, UTAUT, and DOI have primarily focused on technology adoption by consumers. In contrast, the TOE framework delves into the adoption of technology, considering both internal and external factors, from an organizational perspective across multiple stages. Therefore, this study applies the TOE framework to gain a deeper understanding of the factors influencing the adoption of smart retail technology by small fashion retailers.

Technology, organization, and environment framework. The TOE framework was originally developed by Tornatzky and Fleischer (1990). Three aspects of the company’s context can affect the procedure and decision on what technological innovation should be adopted (Oliveira & Martins, 2011). These include the technology (e.g., availability), organization (e.g., size and communication process), and external task environments (e.g., industry characteristics and infrastructure) (Setiowati et al., 2016). For example, technological readiness, which is a firm’s openness to communication, and consumer opinions can be positive indicators for a company to adopt the new technology. Thus, applying this TOE framework, we explore the opportunities and challenges that small independent fashion retailers encounter regarding smart retail technologies.

The TOE framework best suits this research as it is focused on the changing retail environment regarding technology. As prior research has suggested, a proper organizational retail system is imperative when it comes to executing effective smart retailing through smart technology (Pantano & Timmermans, 2014). As the retail industry is continually growing to be smart-centered, it is permanently changing retailers’ conduct and overall infrastructure.

The TOE framework considers three separate components that affect the decision of adopting new technology: (1) technology characteristics and availability, (2) surrounding organization (e.g., communication process), and (3) environment (e.g., market structure) (Tornatzky & Fleischer, 1990). For the technology context, complexity (e.g., perception of the level of difficulty using the technology), compatibility (e.g., consistency with the existing values of the company), and relative advantage (e.g., perception of the benefit of using the technology) are considered to be significantly influential factors (Verma & Bhattacharyya, 2017). In the organization context, top management support, organization data environment (e.g., availability of quality data at the organizational level), and perceived costs are listed as key factors (Kumar & Krishnamoorthy, 2020). Regarding the environmental context, key factors include competitive pressure (e.g., the influence of technology adoption by competitors) and industry pressure (e.g., the influence of technological advancement in the industry the company belongs to) (Verma & Bhattacharyya, 2017). Overall, the TOE framework serves as a basis for understanding the influences affecting fashion apparel companies when considering the adoption of new retail technologies in this research.

Technology advancement for small independent fashion retailers

Small independent fashion retailers, often referred to as small and medium-sized enterprises (SMEs) in the fashion industry, play a significant role in the global retail landscape. They face unique challenges and opportunities, and technology advancements have become instrumental in helping them thrive in an increasingly digital and competitive marketplace (Mitchell et al., 2013). Small fashion retailers have historically faced barriers to adopting technology due to limited resources. However, recent advancements in affordable and user-friendly technology solutions have made it easier for them to integrate digital tools into their operations (Nambisan & Baron, Nambisan & Baron, 2021). For example, the growth of e-commerce has been a game-changer for small fashion retailers. Establishing an online presence through websites, social media platforms, and online marketplaces has allowed them to reach a wider customer base and compete with larger retailers (Wang et al., 2016). Also, small fashion retailers are leveraging customer data to offer personalized shopping experiences by using data analytics tools (Rese et al., 2020). While technology offers numerous benefits, research is scant regarding what opportunities and challenges small independent fashion retailers face when adopting smart technology. Therefore, this study aims to explore these opportunities and challenges of adopting smart technology for small independent fashion retailers through the lens of the TOE framework.

Method

This study used a qualitative research method of one-on-one, in-depth interviews as our research aim is to explore complex and multifaceted phenomena of smart technology adoption for small independent fashion retailers and understand their diverse perspectives on related challenges and opportunities. First, open-ended interview questions were developed to understand what types of retail technologies are currently used by small fashion apparel retail owners and employees. Second, we showed them two interactive smart mirror technologies introduced in the market and asked how they felt about them. Third, we asked questions about the opportunities and challenges of adopting smart technology in general.

For the questions about specific smart mirror technologies, we chose two interactive smart mirror types to show our participants. The selection of these two interactive smart mirror types is grounded in their prevalent adoption and ongoing discussion within the fashion retail sector, particularly in physical store settings (Jawaid, 2022; Lee & Xu, 2020). Given that our study centers on fashion retailers with brick-and-mortar stores, with an emphasis on reinvigorating consumer interest in physical retail spaces, we have deliberately omitted considerations for virtual fitting/mirrors within online store contexts. The first interactive smart mirror provides assistance and style recommendations but had limited functions. For example, Rebecca Minkoff, a fashion designer, adopted the interactive smart mirror in her SoHo Manhattan location to make her customers excited to be in the store environment and feel attached to her brand (Schlesinger, 2017). This mirror is used in the fitting room, and customers can select the different sizes and color options of clothing on the screen and are even able to receive complete outfit suggestions based on what they previously brought into the fitting room (Lee & Xu, 2020). The second interactive smart mirror allows the shoppers to try on clothing virtually without physically changing, but has limitations related to accuracy and reality. For example, Cisco introduced this version of the interactive smart mirror with which a customer can virtually try different types of clothing selected from the screen (Jawaid, 2022).

Sampling and data collection

Small independent fashion retailers fall under the umbrella of small and medium-sized enterprises (SMEs) with employee sizes ranging from less than 50 to 200 (Kim et al., 2013). More specifically, in the fashion industry, SMEs typically pertain to companies with fewer than 50 employees (Malem, 2008), which aligns with the primary focus of our study. The non-probability purposive sampling method was used to recruit participants for interviews (Djafarova & Bowes, 2021). Small independent fashion retailers in the Southwest region were identified and invited to participate. The criteria for including a small independent retailer were that the retail space had to be around 1000 square feet and that the number of employees had to be less than 50 (Mitchell et al., 2013). A total of 11 interviews lasting from 45 to 90 min were conducted in the fashion retail market of Northwest Texas with owners and employees from five local independent apparel retailers in the US (see Table 1). Interview questions developed for this study included questions assessing the general retailing industry’s thoughts on smart retail technology and their reactions to current available new smart retail technologies that were already launched (i.e., two different types of interactive smart mirrors) in addition to the store and demographic information. The questions included but were not limited to: What retail technologies are you using in your store? What is the most effective retail technology out of all these, and why? Do you think this type of smart retail technology will eventually be standard practice in the retailing world (asked after watching the videos about two different types of interactive smart mirrors)? What are the perceived challenges you foresee with the future of smart retail technology? What other smart retail technologies do you consider to be more prominent than the examples shown? What are the opportunities and challenges you see in terms of innovative smart technology adoption?

Table 1 Interviewee information

The interviewees were shown videos of two different types of interactive smart mirrors after answering general store/company-related questions. Then, they were asked about their opinion on adopting these smart retail technologies. The first video was about the interactive smart mirror that is currently used by Rebecca Minkoff (Shannon, 2021). This mirror allows consumers to touch the mirror screen to select the options of different outfits, get assistance from sales associates/stylists in the store, and send the selected outfits’ information to the consumers’ mobile devices. The second video showcased the interactive smart mirror currently under development (Jawaid, 2022). This mirror provides consumers with the virtual experience of seeing virtually how different outfits look on them through the mirror without getting undressed. Figure 1 illustrates the flow of the interview design and thematic analysis processes.

Fig. 1

The flow of the interview design and thematic analysis process

Data analysis

The reflexive thematic approach was used to identify emerging themes in this paper (Braun & Clarke, 2006). The theme development was based on a deductive way using an existing model, the TOE framework. A three-step approach was used for data analysis. First, the ethnographic and interview data were audio-recorded and transcribed verbatim. The transcribed interviews generated the qualitative data set of 11 participants, totaling 235 pages. Then, the audio-transcript data were transferred to NVivo software to analyze the interview contents. Second, the dimensions and contents of each interview file were examined. Based on Spiggle’s (1994) qualitative data analysis maneuver steps, data categorization based on integration and comparison was repeated to identify the themes. As suggested by Braun and Clarke (2006), the generated codes were cross-checked to discuss any differences in the coding of the data. Finally, a thematic analysis was done to identify key emerging themes, following the outline of Lofland et al. (2006). These themes were categorized into technological, organizational, and environmental factors. To assure the inter-coder reliability (i.e., ICR), three researchers were involved in data analysis and continued the repeated process until the agreements on categorization, themes, and sub-themes were made.

Results

After the interview process, it was found that all stores interviewed followed a click-and-mortar format, meaning that they have a presence both online and offline. They identified their e-commerce platforms and point-of-sale systems as the most prominent retail technologies they are currently using (i.e., Shopify, BigCommerce, and Square). The main themes identified in this study were as follows: (1) Integration for Comprehensive Development, (2) A Tool, Not the Ultimate Answer, (3) Resistance to Rapid Transformation, and (4) First-Mover Advantages with Continued Resilience.

Integration for comprehensive development

The first theme, Integration for Comprehensive Development, was a common opinion among the participants. Most of the interviewees (9 out of 11) agreed that new technologies should be compatible and integrated with the systems they are currently using. When respondents were asked whether they would consider replacing their current system technologies, they started to talk about the strong need for integration instead of the total replacement. The two sub-themes of this first main theme include the following: (1) Transparent and Streamlined Setup, and (2) Personalization.

Transparent and streamlined setup

This sub-theme emerged from most of the interviewees after they saw examples of the two interactive smart mirrors. Most of the interviewees (7 out of 11) talked about the importance of speed in setup and the complexity of smart technology as key factors when adopting new technologies. Chloe, who has worked in the fashion industry for over 18 years, mentioned the importance of consistent speed in setup to address the needs of the new generation, the digital natives:

I think it would be a great addition because, if the price was right and it was easy to set up and get going, I would just definitely merge in-store and digital and online and all of that, which I think is great for the new generation that’s coming up. In this video, while the girls aren't using the mirrors, videos and images of other girls in the outfits flash through so that they could get ideas. I’m so inspired by these videos. Exactly, it’s inspirational.—Chloe, Owner/Facilitator

Furthermore, about half of the participants inquired about the update requirements for these mirrors as they are looking to stay up-to-date and maintain transparent information among their stakeholders. Adele, a stylist of one fashion retailer, gave the example of Apple products and how often they provide updates. This then raised the question regarding the need for frequent updates for these potential innovative smart technologies they may adopt:

I mean…think about Apple and iPhone. There’s a different update every year, and even for your GPS, there’s an update every year, you know, whether it’s like they’re adding just more roads that were built and they're updating the look and the interface. So, for your stores online, they need updates like what's linked or what pops up and different looks of your online sources, like that. Everything needs updates. And I think that the mirror wouldn’t be an exception.—Adele, Sales/Stylist

Personalization

Maximizing personalization experiences demonstrated that store owners look for personalization services to bring value to their customers. Adele talked about how personalizing experiences for customers based on their clothing size and preferred fit can help retailers provide better service. In general, most of the interviewees (7 out of 11) mentioned that a system capable of managing inventory based on the needs of a customer base would benefit both the retailer and the customers. Adele also mentioned that personal styling centers on not only customers’ preferences but also their previous purchase history, making this technology useful for the retailer.

I'd say retail store gets the most use out of the effective technology because I mean a huge part of personal styling, and our business specifically, is knowing what the customers have bought in the past and being able to deliver things that coincide with their wardrobe. This mirror with personalized styling shows them something in the right size, knowing what you have in their size, steering them away from things you don’t have in their size, so you don’t have to order it for them so that you keep track of your inventory, and you’re selling what you've bought. There are a lot of manipulation tactics but in a good way.—Adele, Sales/Stylist

A tool, not the ultimate answer

The second main theme, A Tool, Not the Ultimate Answer, also emerged after interviewees looked at two different interactive smart mirror examples. Most of the participants (9 out of 11) mentioned that the technology could be used as a tool but that just having an innovative technology should not be a goal because the technology itself is not the actual product to sell; rather, it is employed to assist them in selling and communicating better with their consumers. The two sub-themes under this theme include the following: (1) Convenience with Agility and (2) Fit, Fabric, and Color.

Convenience with agility

John emphasized the added benefit of special care for their customers through assistance in the new smart technology available:

I feel like a huge lifestyle change was when the Apple Watch came out. It was a jump from the smartphone. Thus, something like that really revolutionizes how someone lives a day today. I feel like that was a big jump from phones to watches. Those are big markers to look towards the industry leaders in technology. However, it’s so important to not solely rely on the mirror and to be able to still have those customer service skills and have a foundation. That mirror might have gotten someone in the store, but you need a special customer care to continue to grow. You don’t stop training your sales staff and start and just solely rely on the tool. You use it to your advantage.—John, Owner/Buyer/Seller

Chloe mentioned the benefit of using smart technology in terms of the convenience they offer. Additionally, she emphasized the importance of implementing a cohesive system with such technology as a supporting tool to increase sales for both online and brick-and-mortar stores:

It sure would make it a lot easier on us. I’m just trying to run two stores as I do now. I consider the online and in-store kind of separately, and it’s basically like running two different things. If we could make it more cohesive so that everything runs smoothly, I think that would be very helpful. It could drive a lot of our in-store customers more toward online sales. That would also be helpful for us.—Chloe, Owner/Facilitator

Fit, fabric, and color

A number of participants (5 out of 11) talked about the issue of providing their customers with accurate information about a garment’s fit, fabric, and color as fashion products need to be evaluated based on these criteria before purchase. The interviewees’ main concern regarding this theme was the limitations of the smart technology currently available when it came to presenting accurate product information. They still noted a need for an in-store experience, where customers try things on to understand the fit, the feel of the fabric, and see the true color. Because of this, they stated that the currently available technologies are more likely to be an accompanying tool to help facilitate the buying process. Adele, again, talked about the need to touch the fabric and try on clothes to solve common fit issues:

I think my biggest thing is that you can’t feel fabric using this smart mirror, and you can’t see it on other people, too, like seeing real-life photos of people in that garment, not just seeing a digital projection on you. Let me see this product on other people who have actually, like physically, have the garment on. That’d be nice because, I mean, how it looks in a projection on you could be completely different. It tapers to your body and with the years they even make you look thinner. That can make you look taller, but for the best version of you to buy that product, seeing it in real life on other people would be good. Like let’s see it in a size six, a size four, or a size twelve, let’s see it in all these different sizes, so that you can see how it looks on different body types and make a better assessment.—Adele, Sales/Stylist

Furthermore, Hailey also talked about the need for an accurate representation of the product on the smart mirror technology. She stated that she liked the example of the Rebecca Minkoff mirror, the in-store fitting room mirror replacement. This particular mirror can provide an actual try-on experience for customers and maintain interactions with sales associates.

The pros for this one, I’d say, is that you can see it on yourself, but that’s also a con because you don’t know if it’s an accurate representation. Because things in a mirror that are done virtually can sometimes look a little bit skewed. Um, I don’t know how it would work with sizing or how that would help. Um, maybe it has a proportion mechanism inside the thing that can help with that. Um, consumers would like to be able to feel the clothes, so the reason why I like the Rebecca Minkoff one more is because you’re still trying the clothes on.—Hailey, Social Media Director

Resistance to rapid transformation

The third theme, Resistance to Rapid Transformation, was in line with the organizational component of the TOE framework. This theme was mentioned the most by all interview participants. In this regard, the main concern was the lack of interaction between customers and their sales associates/stylists as well as the uncertain implementation costs of these smart technologies. The two sub-themes under this theme include the following: (1) Relationships without Reciprocity and (2) Obscure Cost Fright.

Relationships without reciprocity

This theme was the most common of concerns for the small fashion retailers regarding currently available interactive smart mirror technologies. These retailers seem to run their businesses successfully relying on the close relationships between their customers and sales associates/stylists. Because of this, they found that the current smart retail technologies introduced in the market may not meet the needs for building close relationships with their customers. Chloe, the owner of a boutique, talked about the limitations of the currently available interactive smart mirrors:

From what I’m seeing, customers come into the store because they want that interaction. There is a lack of interactions when using the smart mirrors. I do feel like everything has gone digital, so a lot of people are kind of holed up in the library or their homes, and so, when they come out to shop in-store like this, they want that social interaction. They want one of their peers with them. I think they want that social interaction. They want somebody to talk to them. They want that person to help them put outfits together. To me, it just seems like there’s a big disconnection with human beings in this technology.—Chloe, Owner/Facilitator

Obscure cost fright

This theme emerged as some of the store owners and managers (6 out of 11) worried about the unknown costs of new technologies, even though some of them mentioned that they didn’t mind investing up to $50,000 in new technology. Isabella, a sales associate of one small independent fashion retailer, mentioned that “You have to weigh it, weigh that out to see if it would be a financially feasible thing.” Kelly, the owner of another boutique, talked about the unknown costs of using technologies that make her hesitant to adopt them:

How would you balance it? You know, I guess if you could see that it would bring in, you know enough, and I don’t, I don’t know. It’s hard for me to just be throwing something at you that I just dig up and have a clerical, but if you know, if, if it could double business based, I’ll have to sign to buy, that might be worth it. If it just took business up 20 percent depending on the cost, and you don’t know until you’ve purchased. Yeah. You just have to kind of see. It is sort of hard to answer questions that you really don’t know.—Kelly, Owner

After watching the provided videos on interactive smart mirrors, Haylie, the social media director of one fashion boutique, talked about the potential benefits of using smart retail technology over the concerns about the expenses.

Oh, I don’t know. I like, I really liked the dressing room one, but that one seems a lot pricier than the other one because that’s like effective to light and you have to have a connection to the store associate, and it just seems like a lot bigger of a change. So maybe I should start with the other one that’s just full view. Okay. One person at a time would be better.—Hailey, Social Media Director

First-mover advantages with continued resilience

The fourth main theme, First-Mover Advantages with Continued Resilience, emerged from the responses of some interviewees (5 out of 11) after they saw the advantages of adopting technologies such as the smart mirrors early. The participants saw the benefits of being a first-mover and early adopter but also noted the need for any implemented technology to continue to benefit and be resilient in terms of long-term business success. It is insufficient to merely generate a short-term bubble effect of foot traffic and a sales boost when customers come in to try the tech for the first time. The two sub-themes under this theme are as follows: (1) Adjusting to the Changing Environment and (2) Time Will Tell and Follow the Leader.

Adjusting to the changing environment

All interviewees agreed that the adoption of advanced technologies is imperative for adjusting to the current changing retail environment. Adele mentioned that current generations look for new and innovative ways to shop and experience shopping, and because of that, there will be a trickle-down effect if some technologies were to be introduced in her town. For example, John echoed this as he mentioned that young customers in the current era look for an innovative and convenient way of experiential shopping.

The pros are that I think it could serve as a bridge for that very young customer who is shopping on her phone, which may be the easiest way to trust an in-store experience. She’s still kind of controlling her world from that. I could see that it would work well for a lot of branded retailers like that, like a store that’s Rebecca Minkoff, because the issue with the retailer is how do you find good help? How do you deliver a consistent experience? When that sales associate broke up with her boyfriend the night before, is she going to be a great representative of the brand the next day? Brand stores encounter significant turnover and changes in personnel, and that’s why they need to gain more consistency.—John, Owner/Buyer/Seller

Time will tell and follow the leader

Some of the participants (3 out of 11) mentioned the desire to invest and adopt the new technologies as soon as they become more readily available to them, whereas others said that they would rather wait to adopt the technologies until they are verified by other early-adopter retailers first. However, John mentioned that he does not want to wait until all others adopt.

If it’s available, and it works, then go after it, you know, I’m more like don’t wait until everybody else does it. Just be the first to do it. Hopefully, it works, and there’s a downside to the risk. So, if it doesn’t work, it’s not that we’ve wasted the money. I would expect that if you said, okay, I will try your new technology, well, it damn sure better work because I don’t want to sit there and pay $30,000 for something, and then we used it for three customers, and it was like a toy I got tired of after Christmas and played with it once, You know where it needs to work and needs to, you know, be a value just like we deliver value to the customer. It’s got to be a product that we get good value out of.—John, Owner/Buyer/Seller

On the other hand, Olivia said that she would rather wait and see the technologies being accepted and approved by other fashion-forward retailers before she made any moves toward adoption.

Probably, I would not adopt it right away just because it is so new and so many people wouldn’t have any idea how to use it, and I think they’d be reluctant to use it, but once it became more popular, you know, it’d be one of those things where if we didn’t have it, we’d be behind. Especially if they’re coming from a bigger city because you get a lot of people from there; even just to see the mirror.—Olivia, Sales Associate

Table 2 demonstrates the organization of the emerging themes in this study related to the TOE framework. It summarizes the overall theme outcomes and presents what challenges and opportunities small independent fashion retailers encounter when it comes to adopting based on two interactive smart mirror examples as well as the general concept of smart retail technology.

Table 2 The emerged themes of this study connected to the TOE framework

Discussion

Overall, we have found valuable information in terms of understanding the needs of small fashion retailers who are contemplating smart technology adoption, and promising opinions and points of possible improvement have been brought to light concerning these smart retail technologies. We interviewed a total of 11 participants with varying roles, ranging from sales associates to buyers and owners, all working in small independent fashion retailers. First, when asked about current technologies used in general, retailers often identified point of sales (i.e., POS) systems as critical technologies. The systems identified included Shopify, BigCommerce, Square, and others. Moreover, many participants mentioned different customer relationship management (i.e., CRM) systems to help keep track of customer history and increase marketing efficiency, and RetailStarr is an example of such systems.

When asked about specific smart retail technologies, such as interactive smart mirrors, they explained that they look for technology that can be integrated with the platforms they are currently using. This approach helped our participants gain a clearer understanding of smart technology, resulting in unique responses related to these specific types of technology. Overall, they expressed positive attitudes toward the functions operated in both mirrors. When they were asked if they would adopt such technology, almost half of the participants were willing to invest in it, whereas the other half were hesitant because of the cost and uncertainty about the return on investment. Not only did they highlight the cost of the technology as a hindrance to trying new technologies, but they also emphasized the importance of the need for any technology to foster strong relationships between their employees and customers. Furthermore, as we followed up with more general questions about smart technology, we were able to gather valuable in-depth insights into their overall thoughts and opinions regarding the adoption of smart technology.

As described in the TOE framework, the data obtained from the interviews indicated that small independent fashion retailers are more likely to determine their adoption of smart retail technology based on the industry environment and the compatibility and relative advantage of the technology to their business (see Fig. 2). They discussed the challenges in adopting smart technology at the organizational level but also highlighted the opportunities presented by the technology and how the environment (e.g., clients) respond to it. The participants agreed that new smart retail technologies, such as interactive smart mirrors, will be the next big thing to take over fashion retail. However, the participants have also voiced concerns about the feasibility of these innovations at this point in their lifecycles.

Fig. 2

The visual summary map illustrating the thematic findings of this study

After conducting interviews, four major themes emerged. The first theme, Integration of Technology, was found to be a major factor in whether a decision to adopt new smart technology is made or not under the technology context of the TOE framework. Interviewees continuously touched on the importance of having new smart technology that works seamlessly with their existing systems in a synergistic way to make the perceived benefit of a new technology worth it (Lynch & Barnes, 2020). Building off this, the interviewees continually expressed the importance of being transparent with their customers regarding the selection options and prices via the integrated system. Furthermore, maximizing personalization experiences was often mentioned as a significant factor influencing the technology adoption. The second emerging theme, A Tool, but Not the Ultimate Answer, is also related to the technological context of the TOE framework. This theme demonstrated the importance of adopting smart retail technology as an effective means to conduct a particular task (e.g., customer service, promotion, sales, etc.).

The third theme is Resistance to Rapid Transformation. This theme was explained in relation to the organizational context of the TOE framework. Similar to what the TOE framework postulates (Tornatzky & Fleischer, 1990), the findings of our study indicate that the communication process and perceived costs were important components of the organization context of technology adoption for small independent fashion retailers. Commonly, interviewees emphasized that the key value surrounding customer service is building close relationships with their customers. Thus, they noted that the advancement of technology may be a threat to some extent, and they suggested the need for smart retail technology that can boost the reciprocity between the company and customers and not one that will potentially take away the key value of a customer/retailer relationship. Additionally, small independent retailers often have a more limited technology budget; in this regard, the interviewees voiced their concern that new and innovative technologies can often be extremely expensive. They also shed light on the importance of a high return on investment (ROI) to make such purchases “worth it” to adopt and integrate. Last but not least, concerning the environmental context within the TOE framework, the theme “First-Mover Advantages with Continued Resilience” underscored the significance of adapting to a dynamic environment. It also sheds light on how the timeline for smart technology adoption can vary based on the price points and product categories carried by different small independent fashion retailers.

In the context of the TOE framework, our findings align well with the technology segment of the theory (Tornatzky & Fleischer, 1990; Verma & Bhattacharyya, 2017). A significant portion of the framework’s technology-related factors hinges on the availability of technology, both in terms of its physical accessibility and its price feasibility for adopting companies. These points find strong validation in this study, as the predominant emerging themes revolved around the financial aspects of the business and the costs associated with smart retail technology. Furthermore, it was noted that because most interviewees came from small independent fashion businesses with one or two stores, the implementation of smart retail technology appeared to be more manageable across the entire business when compared to corporate big-box retailers with thousands of stores (Gartenstein, 2019).

Conclusions and implications

The findings of this study provide significant contributions for both industry practice and academic theory. It has been determined that general technologies for most small independent fashion retailer niches are used for functionality, and such technologies include POS systems, customer relationship management, and website management. Regarding the practical implications, the themes discovered in this research specifically represent reservations and criteria to be met before adopting the new smart retail technology, particularly targeting the examples of two key interactive smart mirrors. These factors are transparent and streamlined setup, agility and convenience, and accuracy of product representation on the smart retail technology system. That is, a clear demonstration of the benefits of smart technology in terms of the streamlined operation and consumer engagement can enhance the likelihood of small fashion companies adopting such technologies. Given the crucial role of in-store experiences in the fashion category, leveraging smart technologies can ensure competitiveness of small independent fashion retailers in the dynamic retail landscape. Specifically, in-store experiences facilitate social interactions using smart technology, allowing friends or family to shop together and share opinions on fashion choices, as shopping is often a social activity.

Additionally, boosting customer service with the help of smart technology emerged as a key criterion for small independent fashion retailers’ decision to adopt such technology. More importantly, the findings of this study highlighted the key initiatives and practices that fashion retailers consider when adopting smart technology. In adopting smart technology, small independent fashion retailers specifically require personalization and optimization for fit, fabric, and color, along with the building of customer-stylist relationships, as unique components crucial to their success. As fashion consumers seek not only convenience but also the optimal fit when shopping for clothing, smart technology developers and fashion retailers need to consider both these components when developing and adopting new smart technologies. Also, a well-designed and aesthetically pleasing store using smart technology can enhance the brand image and contributes to brand loyalty.

In terms of academic implications, the present study makes a valuable contribution to the literature concerning the TOE framework by reaffirming the significance of assessing the interplay among these three factors when comprehending their impact on business decision-making processes. This research marks an initial endeavor to validate the framework in the context of fashion retailers and their adoption of smart retail technology. Based on our findings, the TOE framework can be applied in the context of other types of technology adoption in the fashion field. Furthermore, this study adds new sub-themes to be considered when studying small independent fashion retailers. In particular, some of these components, such as personalization and accurate product representation, offer new insights into the original TOE framework (Kumar & Krishnamoorthy, 2020).

Through this research, it has become more apparent that smart technology companies wanting to enter the small independent fashion business market must address the aforementioned factors to increase the chances of adopting smart technology. Future research can focus on further analyzing how the implementation of new smart technologies affects these types of businesses and their customer satisfaction. We highlight small independent fashion retailers as a possible major consumer base for potential smart technology partners. If this information is taken and addressed, smart retail technologies can direct their marketing to smaller retailers instead of larger, big-box retailers who are competitively sought after by existing technology companies. Hopefully, this will motivate a resurgence of innovative smart retail technologies in the less advanced fragment of small to medium-sized fashion retailers.