Large retailers like Target and Walmart have already recognized the growing influence of e-commerce and are offering online store formats. Costco, whose advantage lies in wholesale sales, also announced a bigger focus on online with plans for mobile apps and improvements to Costco.com. It is becoming increasingly clear that companies that continue to invest in the growing online sales channel are likely to emerge as future leaders. Brick n Mortar retailers like Target and Walmart are investing in creating an omnichannel environment. The model embraces IT while leveraging the benefits of physical locations. Companies that don't invest as much as leaders in online channels (e.g. Kmart) risk losing ground in the long term. Operational efficiencies The retail industry is focused on consumer goods and is therefore extremely dependent on price/cost advantages. Investments in IT technologies that enable efficient inventory management. The retail industry is one of the largest users of big data. Big data is used to analyze process improvements, study logistics, optimize inventory, improve merchandising and, most importantly, study consumer behavior in-store and online to predict future needs. IT technologies that enable supply chain efficiency will play a greater role in achieving cost leadership. Companies like Walmart, which are able to use IT to track and manage the purchasing, storage and distribution of merchandise, can offer lower prices, which is a key success factor in the industry. Amazon and Walmart, which continually invest in technology, will likely remain competitive on price and be able to offer services that make goods available to consumers efficiently, will likely remain... middle of the paper... ...channel of distribution would lower Amazon's labor costs, thus increasing its ability to further reduce product prices. As a result, traditional retailers will face even tougher competition against online retailers. Online shopping is set to fundamentally change the dynamics of the retail industry with increased consumer reach. It is expected to continue to thrive with the increase in mobile transactions and online retail sales expected to reach $434 billion over the next four years. Large retailers are also entering the e-commerce market. Online shopping will be disruptive for the following reasons: • Industry leaders like Walmart, Target, and Costco have significant brick-and-mortar locations. They will find it difficult to adopt online channels. • Industry leaders do not have as much experience in online channels as “younger” competitors like Amazon.