Amazon and Big Data

6 Ways in Which Amazon Uses Big Data to Stalk Us

Website: https://www.investopedia.com/articles/insights/090716/7-ways-amazon-uses-big-data-stalk-you-amzn.asp

You may find it a bit weird how Amazon knows all or majority of your preferences just by a few purchases you've made. Amazon uses Predictive Analysis to increase customer satisfaction and loyalty. Let's take a deeper look.

Personalized Recommendation System

Amazon takes a look at customers' purchases, what products are in their shopping carts, their search histories as well as product ratings in order to recommend their most needed items. They uses suggestions and recommendations 'innocently' in order to get customers to impulsively make purchases.

Book Recommendations from Kindle Highlighting

After the acquisition of Goodreads in 2013, Amazon allowed for online readers to highlight words while reading. The company then takes a look at the words a reader writes and tries to decide what kind of books that reader is into. New books are then recommended to that reader based on his or her highlighted words. Smart, isn't it? That reader may also receive some e-book recommendations from Amazon.  

One-Click Ordering 

Amazon used Big Data to create One-Click ordering, a feature which allows consumers to make an immediate purchase. This feature is patented. After clicking the feature, customers have 30 minutes to change their minds, after which, the charge is immediately made via the given payment method and shipped to the given address.

Price Optimization

Amazon uses big data to increase its profits and its customer community. Prices on the site are based on website activity, competition, product availability, preference, profit margin, order history. These prices change every 10 minutes as the data is updated often. Consequently, Amazon offers discounts on its best-selling items but makes more money on its less-popular items.

Comments

  1. Amy Le May 18, 2020 at 5:02 AM

    This blog has an amazing content which emphasizes on Amazon uses Big Data. I’m especially keen on this topic when I’m currently writing a report about Amazon Business Model. By dint of researching a ton of papers, this blog is still very helpful to me to take a deeper look at how Amazon uses Predictive Analysis to increase customer satisfaction and loyalty. I do enjoy each way which mentions on the blog. Nevertheless, there are a few ways which really make me surprise.

    1. Book Recommendations from Kindle Highlighting: In 2013, Kindle readers can highlight words and notes and share them with others as a means of discussing the book. Amazon regularly reviews words highlighted in your Kindle to determine what you are interested in learning about. The company may then send you additional e-book recommendations. I deem that it is so smart way to predict customers’ preference, but also emerge the concern of privacy for the readers.

    2. Anticipatory Shipping Model: Amazon’s patented anticipatory shipping model also uses big data for predicting the products you are likely to purchase, when you may buy them, and where you might need the products. The items are sent to a local distribution center or warehouse so they will be ready for shipping once you order them. Amazon uses predictive analytics to increase its product sales and profit margins while decreasing its delivery time and overall expenses.

    3. Supply Chain Optimization: Because Amazon wants to fulfill your orders quickly, the company links with manufacturers and tracks their inventory. Amazon's big data systems choose the warehouse closest to the vendor and/or you, the customer, to reduce shipping costs by 10 to 40%. Additionally, graph theory helps decide the best delivery schedule, route, and product groupings to reduce shipping expenses further.

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