Barriers of Digital Technology Adoption in Tanzanian Retail SMEs: Role of Perceived Risk, Trust and Price Value

Abstract

Digital technologies help sectors digitise their processes, enabling the production of high-quality products and digital services while improving customer knowledge. Despite these advantages, various factors hinder small and medium-sized enterprises (SMEs) from successfully achieving digital transformation. This study aims to evaluate the main challenges that hinder retail SMEs in Tanzania from adopting digital technologies. The study uses the expanded Unified Theory of Acceptance and Use of Technology (UTAUT) model, which includes perceived risk, Trust, and Price value. The quantitative methodology was used to gather data from 335 SME owners, managers, and directors. The collected data were then analysed using Partial Least Squares- Structural Equation Modelling (PLS-SEM). The study results indicate that the adoption of digital technologies is significantly influenced by the key UTAUT factors, particularly Performance Expectancy and Facilitating Conditions. Also, the study found that the added factors, perceived risk, trust, and price value, hindered adoption intentions. This shows that retail SMEs are hesitant to adopt digital technologies due to high costs, poor infrastructure, and limited employee knowledge of how to use them. 

Issue Section: Information and Communication Technology