The benefit of having a huge amount of customer information is being able to translate that into action, by targeting problems where you know they exist.
Just as a company such as Netflix is able to create popular entertainment based on the viewing habits of its users, retail businesses such as Amazon create products that are built squarely for those searching on its site.
This has led to the creation of products such as the Amazon Kindle eBook reader and Fire set-top box. By examining the top products in any one specific category, Amazon is able to identify what its customers want, and then give it to them.
But the model goes far beyond just making products. Being able to access the buying habits of millions of shoppers means providing even more accurate recommendations alongside existing products, so the likelihood of providing the customer with relevant information continues to grow.
Recommendation engines are commonplace in online retail, but tapping into the consumer base and exploiting that data can mean the difference between an ignorant business, and one that knows its customers intimately.
What does Amazon have at its disposal?
- 152 million accounts globally
- 1.5 billion items in its retail store that are monitored, tracked and secured using big data
- Analyse customers’ purchasing intent
- Develop customised results and web pages
- Recommend products
- Offer customer service
- Package customer data and tailor personalised ads
Amazon relies heavily on data and metrics to make almost every important decision, such as what features to introduce or kill, or whether a new process will root out inefficiency in its fulfilment centres. To highlight just to what level of granularity the business uses its data and technology – its pricing bots-software carefully monitors other companies’ prices and automatically adjusts Amazon’s to match.1
1 PwC Australia, ‘The new wave of business: Embracing the ‘always on’ customer’, November 2013
2 MIT Technology Review, ‘Amazon Woos Advertisers with What It Knows about Consumers’, 21 January 2013