How Amazon Used Big Data to Rule E-Commerce

Topic 9: How Amazon Used Big Data to Rule E-Commerce

Name: 陳美菁
Student ID: D0773630
Author: Caleb Danziger 

Amazon has an unrivaled bank of data on online consumer purchasing behavior that it can mine from its 152 million customer accounts. For many years, Amazon has used that data to build recommendation systems that suggest products to people who visit Amazon.com. Since then Amazon has evolved and improved its recommender engine and today they master this to perfection. They use customer click-stream data and historical purchase data of all those 152 million customers and each user is shown customized results on customized web pages.

One of the biggest ways that Amazon utilizes data is through its recommendation engine. When a customer searches for a particular item, this enables Amazon to better predict what else that customer might be interested in. Subsequently, this enables Amazon to streamline the process of persuading a customer to purchase it. Its personalized recommendation system is thought to account for 35% of the company’s annual sales.  Amazon gathers individual data on each and every one of its customers while they use the website. In addition to what a customer buys, Amazon observes the items looked at, shipping address, and whether a customer leaves reviews. Big Data has helped propel Amazon to the top of the e-commerce pile. The company links with manufacturers and tracks their inventory to ensure orders are fulfilled quickly. Through Big Data, it allows the warehouse closest to the customer to be selected and shipping costs to be considerably reduced by 10-40%. With Amazon’s grip on the field showing no signs of slowing, data and the ways it’s used is more important to the long-term future of companies than ever before, or run the very real risk of falling behind to competitors. 

Amazon is now packaging information on what it knows about consumers and selling this information to marketers who can use it to advertise products tailored to what people really want. In contrast to Google and Facebook, who might have more overall data about consumers, Amazon has a clear understanding of what people actually buy and therefore what they are looking for and what they need. This is much more valuable information and this could definitely grow Amazon’s advertising revenue in the coming years. In the past few years, Amazon has definitely moved away from a pure e-commerce player to a giant online player who offers much more than just products. It focuses massively on big data and is changing from an online retailer into a big data company.

Comments

  1. HannaJune 6, 2020 at 7:16 PM

    I think this is a really good article
    For a multinational conglomerate technology company as Amazon, data management is really important, especially this company operate mainly on the E-Commerce
    Commodity information, customer ordering information of thousands of people,... and others. A huge information, so the big problem is management and security. Big Data makes it easier and more convenient. Amazon focuses massively on big data and is changing from an online retailer into a big data company. Big data is one of the important factors that make Amazon successful as nowadays
    D0458704

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