Amazon`s Big Data Strategy
| Case Code: ITSY077 Case Length: 15 Pages Period: 2003 - 2013 Pub Date: 2014 Teaching Note: Not Available |
Price: Rs.400 Organization: Amazon Industry: E-commerce Countries: US Themes: Big Data, Analytics, Market Research |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Big Data at Amazon
Over the years, Amazon had evolved from being a pure e-commerce player into a giant Internet services firm which offered a large range of services for individuals and corporations. It started to focus heavily on big data and embarked on its transition from a pure online retailer into a giant big data company. Amazon along with other major Internet giants like Yahoo! Inc. (Yahoo) and Twitter, Inc. (Twitter) realized in the early 2000s that they had huge amounts of data about their users which they could put to valuable use. While the other companies did not concentrate on the importance of big data, Amazon was quick to cash in on the invaluable database of people who shopped on its e-commerce portals around the world. The product recommendation team at Amazon thought of innovative ways in which it could use the data accumulated by the company. The result was the big data revolution which transformed the way Amazon did business.
As an e-commerce giant, Amazon’s success had always depended on making the right products available to its customers. Making the right products available in turn depended on understanding the precise products that customers wanted. Understanding the needs and tastes of customers involved doing proper market research as well as analyzing its own customer base. Since its inception, Amazon had been renowned for its product recommender system which provided product suggestions to customers depending upon their past purchasing behavior. Data collected from its customers was the primary driving force behind Amazon’s recommender system. Being the leading e-commerce player, Amazon had a large bank of data regarding the likes and the past purchasing behavior of its customer base.
Utilizing Big Data
Amazon leveraged on big data to improve its relationship with its customers and provide superior customer service. The online retailer built a vast database of its customers and their buying preferences over a long period of time. It was one of the first e-commerce companies to start using the cross-selling/up-selling method. This customer recommendation system was later augmented by utilizing its big data resources. Using big data, Amazon started analyzing the past product purchases made from its online store by its customers and the other items that were purchased along with them. Data collected from its customers was used to give silent but highly customized suggestions to make them buy more..
Aiding Other Companies With Big Data
Nokia was the undisputed leader in India’s mobile market till 2007. It was the leader in the feature phone market and entry level mobile phone market. It had a presence in the smartphone market through the N Series launched in 2005. The N series phones allowed the users to listen to music, take pictures, play games, and also access the internet. Nokia also had other smartphones, the C Series and the E Series that ran on its proprietary software Symbian, apart from XpressMusic phones. In 2007, Apple launched the iPhone, a smartphone..
Looking Ahead
Analysts came up with suggestions on more ways in which Amazon could benefit from big data. Having its roots in selling books, Amazon had built a review system for the books sold through its website. Amazon’s review system was mainly based on text reviews written by customers and the number of stars (from one to five) given to a book or author. This review system allowed Amazon to build a community and a loyal customer base. Over the years, there were allegations that many authors had found a way to manipulate Amazon’s review system and to get paid reviews for their books..
Exhibits
Exhibit I: Timeline of Amazon.com
Exhibit II: Financials of Amazon from 2008-2012 (Figures in US$ Millions)
Exhibit III: Top 10 retailers in National Retail Federation Foundation/American Express Customers’ Choice Awards for 2010 and 2011
Exhibit IV: Five Components of the Big Data Process
Exhibit V: Screenshot of Samsonite’s Website Built Using Amazon Webstore
Exhibit VI: AWS Infrastructure
Exhibit VII: Kinesis’ Architecture
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