Repositioning Structural Enablers in Informal Retail: The Role of Digital Infrastructure and Perceived AI Benefits in Nanostore Operational Performance

Abstract

This research examines determinants of artificial intelligence (AI) adoption and its impact on operational performance in nanostores across seven emerging markets, addressing a critical literature gap focused on formal SMEs in developed economies. By investigating perceptual and contextual drivers in informal, resource-constrained retail, it provides one of the first large-scale quantitative studies in this context. Building on exploratory work in Honduras, this cross-sectional study analyzes data from 1,412 nanostores in Jordan, Israel, Saudi Arabia, UAE, Morocco, Honduras, and Colombia (collected August 2024–November 2025). Partial Least Squares Structural Equation Modeling (PLS-SEM; R2 = 0.617) reveals perceived AI benefits (β = 0.394, p < 0.001) and environmental interaction (β = 0.132, p < 0.05) as significant predictors of operational performance, while perceived quality has no direct effect. Digital infrastructure accessibility emerges as a key contextual determinant, with multi-group analysis showing stronger effects in Middle Eastern than in Latin American markets. Results indicate that effective AI integration requires addressing perceptual barriers (benefit demonstration) and structural constraints (infrastructure/ecosystem support). Findings advocate context-sensitive strategies: prioritizing benefit communication and ecosystem linkages in Latin America, alongside targeted infrastructure investments. This multi-regional evidence guides inclusive digital transformation in informal retail.