Microfoundations of dynamic capabilities in retail in the age of artificial intelligence and robotics

Abstract. The purpose of this study is to find out what are the skills possessed by people working in physical stores and how these can be utilized and managed in the future. The research problem lies in an assumption that do people working in retail stores obtain required skills and capabilities or not, and are they recognized and utilized by management. Many technological solutions have been introduced within the retail industry, but there seems to be lack of understanding how to utilize peoples’ skills differently as some predictable and repeatable tasks are (or will be) performed by machines. There have been studies conducted in the previous years about dynamic capabilities from the perspective of strategic leaders of companies. Dynamic capabilities have been researched in customer centric industries also from the perspective of corporate directors. However, there lacks a study that fully concentrates on retail industry (no other customer centric industries) and solely limits the research to study physical stores mainly from the perspective of people who actually work in the stores, not the leaders in headquarters. Therefore, it could be stated that this study fulfils a research gap lying in the analyses of dynamic capabilities and their microfoundations. The main results of the study show, that there are variations related to information flows as well as there are inefficiencies about information of technological developments happening in the field in general. There is high motivation towards personal and professional development and willingness to learn. Changes made in processes and operations are mostly based on stores’ own customer analyses and communication with their customers. Even though needs for changes are recognized and there is willingness to development, it is highly resources-dependent. Realignments or redeployments are not fully conducted within store operations if their current resources and technologies in use do not allow this. There is a need to move away from certain routines towards being more creative and analytical. Even though there were need to move away from certain routines, there were no indications of considering the routines to be disappearing from store operations. There are structures in stores and in their supportive operations, which enable good customer service, doing the tasks and routines but there are little enabling factors for other things e.g. to innovate and be creative. Skills such as ability to analyse customer behaviour, product knowledge, good communication skills, ability to learn and share new knowledge, plan, organize and prioritize are possessed. However, the structures and processes prevent to utilize these skills to truly fluently communicate new opportunities forward and be part of creating something completely new. Utilization of skills in a new untraditional way are remained in the background because of routines and the traditional role descriptions and therefore it could be argued, that the microfoundations of retail companies are not dynamic