What the study found
The study finds that a retailer’s choice of data analytics depends on the supplier’s encroachment cost, which is the cost to the supplier of entering the retailer’s channel. Under a shared data platform, perfectly accurate analytics are used when that cost is either very high or very low, while moderate costs lead to informative but biased forecasts.
Why the authors say this matters
The authors say their findings offer practical guidance for retailers on how to implement learning algorithms and how to choose between shared and separate data governance structures. They also conclude that transparent and integrated data analytics can be beneficial within vertical distribution channels.
What the researchers tested
The researchers studied the retailer’s data analytics strategy using a Bayesian persuasion framework, which treats analytics as a signaling rule that maps market states into predictions with partial informational granularity. They compared two organizational structures: a shared data platform, where retailer and supplier receive the same demand predictions, and a separate data platform, where the retailer gets accurate predictions and the supplier gets less precise insights.
What worked and what didn't
On a shared platform, the retailer used perfectly accurate analytics when the supplier’s encroachment cost was very high or very low. At moderate encroachment costs, the shared platform produced informative yet biased forecasts, and the paper says these surprisingly benefited both firms because of the ease of double marginalization.
What to keep in mind
The abstract does not describe empirical data, so the findings are presented within a theoretical modeling framework. It also does not provide detailed limitations beyond the scope of the shared-versus-separate platform comparison.
Key points
- The retailer’s analytics choice changes with the supplier’s encroachment cost.
- A shared data platform uses perfectly accurate analytics when encroachment costs are very high or very low.
- At moderate encroachment costs, the shared platform produces informative but biased forecasts.
- Under a separate platform, the supplier gets no informative predictions at moderate encroachment costs.
- The retailer prefers a shared platform when the supplier’s encroachment cost is relatively high.
Disclosure
- Research title:
- Retailer data analytics choices change under supplier encroachment
- Publication date:
- 2026-02-26
- OpenAlex record:
- View
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