The Amazon.com online marketing giant fascinates technology buffs with their incredible ability to “read minds” by consistently predicting consumer behavior with remarkable precision. However, closer inspection reveals that Amazon.com’s seemingly clairvoyant powers have more to do with how they use the massive amounts of information consumers provide to the company on a daily basis using Big Data analytics than it has to do with superhuman powers. From their early days as an online book reseller, Amazon.com began the trek of leveraging customer provided information to increase their business model’s predictability when they wrote an algorithm inserted into their web-based applications that would automatically offer like kind products to customers based on what they are currently purchasing as well as what they have previously purchased. Now, however, Amazon.com’s use of Big Data has evolved far beyond their humble beginnings to include the ability to predict what a customer will buy and when and from where even before the customer buys it. This amazing use of technology is the product of what we now call Big Data Analytics.
Amazon.com leverages custom algorithms built in-house to mine new information from their vast amounts of consumer data. Amazon.com uses of Oracle SQL databases as the engine that drives their big data analytics, heavily customized to meet the needs of their aggressively growing company. Amazon chose to use this model rather than Big Data analysis software from another company because Amazon.com’s analysis needs are on the cutting edge of Big Data technology, as they essentially creating new ways to use Big Data even as they gather more.
As mentioned earlier, Amazon has been using data mining almost from the beginning of the company. In addition to the techniques already mentioned, Amazon also uses Big Data Analytics to manage their massive amount of retail items (over 1.5 billion items total) with regard to the item location, how many there are, when to restock, and the best distribution model. Another Amazon.com use of Big Data Analytics that has captured the technology world’s attention is the ability to predict when customers will buy items, which items they will buy, and where the items will ship, all before the customer has even purchased the item. By using an algorithm with this feature, Amazon hopes to cut costs and at the same time decrease shipping time to customers, gaining, even more, business through better performance and improved customer experience.
In part two of this series, discover how Amazon.com increases their logistical performance while using the same technology to build repeat business and committed customer relationships.