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How does Amazon do it?

The main threats from Amazon to traditional communications are the next-day delivery service and the data-rich insights.

Amazon sells everything – consumers rely on amazon for anything from ‘grass seed to birthday gifts. The platform has the capacity to sell millions of products globally (119,928,851 to be exact), with 57% of them being from independent retailers, and can do so with 10% of these products being able to be delivered the next day in the UK. Their Prime service is a perk that competitors cannot match for such a vast array of products; time utility is very valuable for prime users and it gives them their competitive advantage against other sites.

They are a data company.

Although they happen to sell products, they are a data company.

Amazon looks at the rich data like what you look at, what you don’t buy, what you look at next etc. and uses this data to enhance the consumer experience.

Amazon particularly utilises data through their shift into the in-house services with their Alexa and Ring products, as they ‘from voice one can learn so many things about what a person cares about, what they’re thinking, how they’re engaging with family, what their emotional state is’ (BBC, 2020). They use information collected by in-house tools to their advantage. They use this data to ‘perform analytics including market and consumer research and operate, evaluate, develop and improve our business’ (Amazon, 2020).

How much do they really know?

The ability for them to collect mass data sheds light on their ability to continue satisfying customers, as they know so much about them and can anticipate user’s wants before they’re even aware of them themselves. However, the data collected is not available for public access: Amazon does not share this data, so how do we know much they really know? Do consumers continue letting Amazon learn ever more about us in the name of a better service or consider forcing it to divide up its data?

The data Amazon has gives them an advantage against traditional communications as multiple factors contribute to this data collection process which traditional communications cannot satisfy (to this extent).  

Source: Feb 28 | What's Trending