How Big Data Helps Drive Amazon Sales

The reliability of businesses on big data is becoming increasingly high every day. Businesses now fully rely on data, from the time it is generated, up to the moment it delivers valuable insight to online users. Hence, collecting, storing, processing, and analyzing data within a short period of time, has become necessary in order for a business to stay ahead of the competition.

Amazon, as the leading eCommerce platform, has achieved all its success by putting in hard work to remain at the top of the charts. It makes use of big data analysis to persuade customers to make more shopping choices that are pleasing. This stimulates more purchases from them, and thus more profits.

How Does Amazon Use Big Data?

The secret to Amazon’s success lies within their adopted model, which has left nothing untouched. Its technologies enable them to provide customers with great options that make them feel informed. Customers become knowledgeable about a variety of choices, giving them the ability to make wise and better shopping decisions. The dependence of a product’s sales rank on the number of its sales is also interesting. The smaller the rank, the more sales there are. Therefore, this tool will be useful to sellers because it uses data and the latest algorithms to convert the rank into sales.

Amazon analyzes big data collected from different customers who shop on their platform, to accurately build an efficient recommendation engine for its users. Amazon tries to learn as much as possible about you, in order to make accurate predictions of what you might want to buy. They recommend various items which you might be interested in buying thereby saving you the stress of searching through their website to find products on your own. 

Amazon’s recommendation system is built by picturing who you are and then offering you products that other customers with the same or similar profile as yours, have bought in the past. 

Implementing Dynamic Pricing System to Stay Ahead of Competition

Amazon uses big data to assess the willingness of a customer to purchase a product on its platform. This is why the price of items on Amazon’s platform changes frequently. 

The proactive approach used by Amazon to implement big data algorithms has enabled them to meet the precise needs of customers. Once a customer shows a lot of interest in purchasing a product, the price of the product changes to a slightly higher price. Unlike platforms that make use of big data, other websites that don’t,  find it difficult to frequently change the price of items in their stores. Therefore, this results in them making less profit as compared to the Amazon platform.

Amazon uses big data to change product prices every 10 minutes, which means that product prices change about 2.5 million times a day. Things that are being analyzed include: 

  • Competitor pricing
  • Inventory that is available 

Analyzing this data enables Amazon to set unbeatable prices for products on its platform.

Amazon Encourage Users to Buy More Products with Every Order

The product recommendation system used by Amazon has been the most popular big data application on the site. It presents online shoppers with items that are similar to products they’ve purchased in the past, or products related to items in their shopping carts. This amazing recommendation system helps persuade customers to buy more items, even if they didn’t originally plan on doing so. 

Amazon is said to have generated about a 35% increase in annual sales using its recommendation system. Amazon designed its recommendation system in such a way that it is appealing to customers so that they will buy more and more products willingly. 

SinceAmazon has generally become accepted by customers all over the world as a great place for purchasing any item, the company’s profits increase day by day. 

Amazon personalize, which was released by Amazon, has paved the way for developers to make use of its highly scalable and easy-to-use platform, to recommend products for users on any domain. Amazon’s technology has enabled other companies to show merchandise options such as food, clothing, jewellery, etc. to their customers. This innovative idea from Amazon shows that they will continue to hold on to the use of big data in moving their business forward.

Without big data, Amazon wouldn’t have come this far with its eCommerce business. Big data has propelled Amazon as an eCommerce platform, to the highest level within the eCommerce industry. Through big data, Amazon has been able to easily connect with manufacturers to track their inventory, so as to ensure quick delivery of orders. This has also reduced the cost of shipping items by 10 – 40%.

Amazon is one of the leading platforms that has used big data to move its business forward, and it has no intention of slowing down. Implementing technologies has proven to be the most reliable and promising way of staying ahead of the competition for the long-term future. 

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