The Adoption of Smart Retail and Business Performance: A New Mechanism Analysis

Smart retail adoption (SRA) is widely seen as a way to improve operations. But how it affects business performance (BP) is still unclear. This study builds a framework using information theory and the Technology–Organization–Environment (TOE) framework. We use data from 220 Chinese retail firms (2012–2023). Our analysis shows that SRA significantly improves BP. It does so by first reducing incomplete information (measured by analyst forecast dispersion, AFD) and then lowering uncertainty (UNC). These two factors work in sequence. Technological conditions (TECH), organizational conditions (ORG), and environmental conditions (ENV) all strengthen this effect. SRA also has strong long-term benefits. The effect is greater in non-state-owned firms, large firms, firms in central China, and those that rely mainly on offline channels. This study explains how SRA boosts BP and offers practical insights for retail transformation.