Unlocking Industry 4.0 technologies adoption in inventory management: empirical evidence from Australian retailers

Purpose This study aims to identify and analyse the barriers to adopting Industry 4.0 technologies in inventory systems within the retail sector. Despite the critical role of these barriers in hindering the implementation of digital technologies, there is a noticeable gap in the literature regarding analytical studies that address this issue. Design/methodology/approach To fill this gap, the study employs a hierarchical model to examine the interrelationship between various barriers. The model integrates joint interpretive structural modelling (ISM) and cross-impact matrix multiplication applied to classification (MICMAC) analysis. The research involves interviews with a group of expert participants from the Australian retail industry, focusing on 13 key barriers identified through a comprehensive literature review and expert input. The driving power and dependence power of each barrier are assessed and classified into four clusters. Findings The study identifies 13 key barriers to the adoption of Industry 4.0 technologies in retail inventory systems. Among these, four stand out as the most influential: financial constraints, lack of management, organisational inadaptability and government reluctance. Financial constraints emerge as the dominant driver, as limited profit margins restrict retailers’ ability to invest in new technologies. In contrast, skill and training requirements were found to be the least consequential, indicating that workforce limitations, while relevant, are not perceived as critical in undermining inventory system performance. These results clarify the relative influence of barriers and their role in shaping adoption outcomes. Practical implications The study provides exploratory insights that can help retail practitioners in Australia understand and prioritise the barriers to adopting Industry 4.0 technologies in inventory systems. By mapping the driving and dependence power of each barrier, retailers can develop more targeted strategies to address the most influential challenges. While the findings are indicative and context-specific, they offer a structured basis for reflection and strategic planning, supporting the ongoing digital transformation of inventory management in the retail sector. Originality/value The contribution of this research lies in its context-specific examination of barriers to Industry 4.0 adoption in Australian retail inventory systems. Although previous studies have investigated Industry 4.0 adoption across various sectors, few focus on retail inventory management and the interrelationships among barriers in this specific context. By applying interpretive structural modelling (ISM) and MICMAC analysis, the study provides a structured exploration of how barriers interact, offering preliminary insights for both researchers and practitioners rather than claiming a fully novel methodological or theoretical contribution.