Retail innovation in Central-Eastern Europe: A mixed-methods exploration of executive and consumer perspectives

Abstract

Recent economic and political events and the rapid growth of digital technology have accelerated innovation in retail and made companies reconsider how they deliver front- and back-end solutions along the customer journey. Prior research deeply describes various retail technologies and their impact on customer experience; nevertheless, it rarely examines the perceptions of executives and consumers regarding retail innovation and its value in transition economies. Our mixed-methods study fills this gap by examining Hungarian retail as a representative market in Central and Eastern Europe. We combine 16 semi-structured interviews with senior retail executives and a survey of 291 consumers, analyzed through a two-level clustering methodology, to investigate the foundation, implementation, and impact of innovation. We identify six unique customer segments characterized by varying attitudes to back-end, front-end, and convenience innovations. Furthermore, we conclude that executives primarily perceive innovation as an organizational skill rather than a collection of individual technologies. Executives and consumers agree that omnichannel solutions and mobile app-based ecosystems are the minimum necessary, but they disagree on how important back-end transparency and sustainability information are. Many executives overlook these factors, but some consumer groups respond positively to information about product journeys and supply-chain practices. Theoretically, this study enhances sensemaking and strategic-framing frameworks for retail innovation by correlating executive perceptions with diverse customer adoption trends within an underexplored transition-economy setting. The results indicate that managers need to change how they approach innovation, view some technological solutions as basic features instead of unique ones, and be more proactive about telling customer groups that value them about improvements in back-end and sustainability.