Omnichannel Retailing and Data Analytics: Leveling the Playing Field

As a follow up to their MIT Sloan Management Review article, “Competing in the Age of Omnichannel Retailing,” the authors delve into the challenges and successes in the new world of physical, digital and mobile shopping.

I’ve had my eye on a Breville Panini Press and Grill for longer than I’d like to admit.

I’ve dutifully signed up for email alerts to deals and sales. I’ve comparison-shopped on, Crate & Barrel and Williams-Sonoma. I’ve read and re-read online reviews. Finally, this weekend I trekked down to my local Williams-Sonoma for some instant gratification (sort of). I had the sales woman pull the big daddy out of its box, so I could see it and feel its weight and heft before purchasing.

While in the store, I slipped to a back isle to do a last-minute comparison shop on my mobile (discretion seemed appropriate). It turned out I hadn’t used my Amazon credit card in forever and, as a Prime member, I was eligible for a sweet discount on the very same Breville I’d just held in my hands — free, fast shipping included. Amazon got my business.

Many retailers are grappling with stories like mine, stories of consumers armed with smart phones, mobile apps, online reviews and on-the-spot digital deals who can simultaneously navigate in-store and online retail environments.

It’s the new world of omnichannel retailing that blurs the lines between physical, online and mobile channels. And retailers are scrambling to catch up.

In a recent AllAnalytics video and web chat, Analytics in the Age of Omnichannel Retailing,1 researchers Erik Brynjolfsson, director of the MIT Center for Digital Business, Yu Jeffrey Hu, associate professor at Georgia Institute of Technology’s Scheller College of Business, and Mohammad Rahman, associate professor at University of Calgary’s Haskayne School of Business, discussed the challenges facing retailers.

“We’re in the early stages of a tectonic shift in the way that retailing is being done,” said Brynjolfsson. “The first big wave came with Internet retailing in the ‘90s, and it's been progressing. And obviously companies like and others have made a huge impact on the industry. But what we’re seeing now is going to be much bigger, and that’s omnichannel retailing. Because digital technology, analytics, new devices — those are being brought to every retailer. It’s no longer segmented off to people who are shopping online.”

Two technologies are really driving this omnichannel revolution: mobile telephony, especially smartphones; and big data and analytics. Retailers need to understand these shifts because it is these big changes in technology that complement and require equally big changes in strategy and business processes, says Brynjolfsson.

But what exactly are those challenges facing retailers — many of whom already operate online stores that are counterparts to brick and mortar shops? “The biggest challenges faced by retailers are changing the management and culture to take advantage of the opportunities created by these new technologies,“ says Brynjolfsson. “That’s really hard for most companies.”

Business-to-business retailers have their own set of challenges, he said. “Big data analytics is often tougher because the number of transactions is lower. However, relationship analytics can be more important. Becoming a trusted partner that helps customers navigate lots of options is a good way to add value in B2B relationships.”

Rahman expanded on the relationship angle. “A big challenge for retailers in the omnichannel retailing world is to manage relationships,” he said. “This includes managing relationships with customers, building trust and not alienating them.”

This is where big data analytics comes in.

“Until now, stores didn’t even necessarily know what customers were looking for,” says Rahman. “But now [with data from mobile apps] they have a way to know exactly what customers are looking for.”

This knowledge of what consumers want is leveling the playing field between online retailers and brick-and-mortar stores, says Brynjolfsson. He gave the example of, which runs 200 a/b tests a day. They use the knowledge gleaned from these analytics exercises to become a more effective retailer.

Historically, however, retailers weren’t able to do this same sort of testing; it’s a harder in the analog world to collect consumer data. But with both the digitization of retail and more and more consumers downloading mobile retail apps, there is suddenly some parity in consumer understanding through data.

That said, there is still a long way to go before retailers fully embrace the world of omnichannel retailing. “There is a lot of reinvention that needs to get done,” said Brynjolfsson. “This is new territory for everybody.”

2 Comments On: Omnichannel Retailing and Data Analytics: Leveling the Playing Field

  • joel rubinson | August 27, 2013

    Excellent piece and this IS the number one issue for retailers. Competitive advantage is no longer in the greeter or even in short check out lines. Retailers must compete as technology companies. Coincidentally, I just blogged about this

  • Subbu Jois | October 24, 2013

    Retailers have to revisit their models with the introduction of Omnichannel Retail, which will bring together Online and Offline retail to give a unified experience seamlessly. The Next stages will be Self-checkouts. However, the fundamental issue is all retailers are still addressing the market with traditional Product Centric approach. That mindset shift will take longer to adjust if Omnichannel retail has to succeed!

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