Technology exploring the impact of digital transformation on sustainable performance in the retail industry: the moderating role of market turbulence and innovative culture

Digital transformation has emerged as a strategic imperative for organizations seeking competitive advantage in rapidly evolving markets. However, its impact on sustainable performance remains theoretically and empirically contested. This study examines the relationship between digital transformation and sustainable performance, investigating the moderating roles of market turbulence and innovative culture within China’s retail sector. Grounded in Dynamic Capability Theory, we employed a quantitative approach using survey data from 353 Chinese retail managers. Structural equation modeling via SmartPLS was utilized to test the proposed hypotheses and validate measurement scales. Results demonstrate a significant positive relationship between digital transformation and sustainable performance (β = 0.453, P < 0.001). The model explained 24.4% of the variance in sustainable performance (R² = 0.244). Innovative culture significantly enhances this relationship through positive moderation (β = 0.216, P = 0.004), indicating that organizations with strong innovation-oriented cultures better leverage digital investments for sustainability outcomes. Market turbulence showed no significant moderating effect (β = 0.099, P = 0.051) but exhibited a direct negative impact on sustainable performance. Contrary to expectations, market turbulence does not moderate the digital transformation-sustainability relationship but exerts a direct negative effect on sustainable performance. These findings provide critical insights for retail managers pursuing digital-enabled sustainability strategies and offer practical guidance for enterprises entering emerging markets characterized by digital disruption.