Digital Transformation in SME Retail Operations: Impact on Supply Chain Agility Post-COVID-19

• Abbas Ahsun

  Texas University

  Author

The COVID-19 pandemic exposed critical vulnerabilities in small and medium-sized enterprise (SME) retail supply chains, prompting accelerated digital transformation across the sector. However, the precise mechanisms through which digital technologies enhance supply chain agility in resource-constrained retail SMEs remain insufficiently quantified, and existing studies predominantly examine large firms or aggregate adoption indicators without distinguishing between foundational production technologies and customer-facing consumption technologies. This study addresses this gap by analyzing the differential predictive power of digital transformation components on supply chain agility outcomes among post-pandemic retail SMEs. Drawing on a cross-national dataset of 491,636 SME technology adoption records and employing machine learning ensemble methods alongside structural equation modeling, the research identifies that production-oriented digital infrastructure—specifically automation and backend integration—exerts substantially stronger effects on agility than consumption-oriented tools. The Random Forest model achieved a test R² of 0.6249, with feature importance analysis revealing that production technology adoption accounts for 89.4% of the explained variance in supply chain agility when combined with digital infrastructure investment. The findings challenge prevailing assumptions about the primacy of customer-facing digital tools and demonstrate that foundational digital capabilities serve as the critical enablers of post-pandemic supply chain responsiveness. The study contributes a validated predictive framework for SME retail digitalization strategy and offers actionable guidance for practitioners and policymakers prioritizing technology investments.

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Copyright (c) 2026 Abbas Ahsun (Author)

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