Strategic Integration of Conversational AI in Retail SMEs: Addressing Organizational Readiness and Budget Constraints

This study examines the adoption of conversational artificial intelligence (AI) systems— chatbots, virtual assistants, and generative agents—by small and medium-sized enterprises (SMEs) in retail e-commerce. While existing research highlights potential benefits, little is known about SME adoption in practice. Using the Technology–Organization–Environment (TOE) framework, this study analyzes strategies, barriers, and drivers through semi- structured interviews with Italian e-commerce managers. Findings show that leadership vision often outweighs technical readiness, with customer service automation as the dominant use case. Yet challenges remain around balancing automation with human interaction, ensuring data quality and usability, and leveraging ecosystem partnerships. Hybrid human–AI models emerge as a practical pathway, reflecting the sector’s need for scalable but customer-centric solutions. The study develops the theoretical discussion on SME-specific adoption dynamics and provides actionable insights for resource-constrained firms pursuing AI integration.