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Amazon was founded in 1994, and its headquarters are in Seattle, Washington. Today, it is the world’s biggest physical and virtual goods retailer, while its initial business model was an online bookshop. Amazon provides its services through different websites globally, such as amazon.com, amazon.de, etc. It also enables authors, musicians, filmmakers, app developers, and others to publish and sell content via branded websites. Amazon’s core is its recommendation systems, built on understanding users’ needs and predicting what we need and when we need it. Amazon also provides Kindle Direct Publishing, an online platform that allows independent authors and publishers to self-publish their books in the Kindle Store. In addition, it offers co-branded credit card agreements and advertising services, serves developers and enterprises through Amazon Web Services, and manufactures and sells electronic devices. Amazon additionally offers Amazon Prime, an annual membership program that provides free shipping, streaming, and access to books to borrow and read on a Kindle device.Recently, Amazon expanded on the food industry by providing fresh produce and quick delivery through the Amazon Now service.
The biggest challenge in the 21st century is information overload. Having many online services and websites makes it harder for retailers to retain loyal customers. Amazon offers its “everything under the same roof” business model, which helps retailers increase the probability of increasing their sales by making it easier for their potential customers to find them. We all want to have options, but when there are so many options available online, we get overwhelmed by the vast range of them. On top of that, “buyer’s remorse” is a big topic today. Imagine if you were buying a product or a service and then identifying a better and cheaper option. This fear of making an ill-informed purchase can lead to putting off spending until someone has done sufficient market research. Buyers can become data-rich and insight-poor simultaneously by the sense that they gain more information about their options but get overwhelmed by it and eventually face more significant decision-making challenges.
The idea of recommendation systems pre-existed, but Amazon took it to another level by introducing it to widespread public use.
Considering its clients’ needs, Amazon used Big Data to build a recommendation system that assists customers in shopping while browsing Amazon’s websites. The main idea here is that Amazon collects data to create consumers’ profiles, understand the different combinations of sales (which products sell together), and finally suggest to you what other buyers with similar profiles have bought. To create these profiles, they check out different things like someone’s demographic data, the frequency, the day, and the time of the day that a buyer is shopping. Another thing that is essential for Amazon is a buyer’s digital print: customer feedback and reviews.
Except for the above, Amazon uses the collaborative filtering technique where the user can set up some filters to define which criteria are essential for them. In filtering, only the metadata of products is used, for example, their names, prices, etc. Hence, this is different than a content-based filtering technique used in other recommendation systems like Netflix, where the unstructured data (text) is used for patterns identification.
Furthermore, if you are using Amazon services like Kindle, Amazon considers the time that a user spends reading books to understand more about the user’s behavior. Every bit of information is used to build a consumer’s profile, and then Amazon groups similar profiles to make recommendations based on their interests. Advertisers currently pay Amazon to access the anonymized users’ data. Hence, Amazon became a big competitor for Google and Facebook in selling data for marketing purposes.
As you can already imagine, getting the public to put faith in taking part in online commercial activity is a considerable challenge for all e-tailers. Significantly, the delivery of financial data or data related to money transactions was tough to obtain because of security issues. Amazon faced this challenge by investing heavily in security. Amazon uses the Netscape Secure Commerce Server systems and SSL to store sensitive information in an encrypted database. Amazon succeeded in making its users trust it. Amazon’s data warehouse has approximately 200 unique website visitors monthly, and its revenue coming from cloud-based Web services businesses is nearly $2 billion per year.
Founded in 2005 and based in Athens, Greece, Skroutz S.A. develops innovative technology services, creating innovative e-commerce platforms and high-performance websites, including products from 3.500+ online merchants. The company provides a range of user-centric software solutions and e-commerce platforms utilizing new technologies and methodologies that highlight the passion of its human resources. It serves more than 8 million unique visitors monthly and has an impressive 15-year track record in the E-commerce industry. Skroutz S.A. employs a 240+ people workforce and forms €10.5m revenues annually.