The Web (WWW) celebrated its 32nd anniversary this year, and things have changed since its invention in 1989. Our daily lives have been made easier by the infinite number of tools the internet offers us today.

From tracking health to helping with business decisions; technology plays a vital role in our lives, which would not be possible without data, significant amounts of data. However, as gold requires treatment to earn more value, regardless of its source, data needs to be processed and analyzed before becoming meaningful.

Whether you use the internet for restaurant suggestions, online shopping or connecting with people nearby; you must also be aware of all the data collected, not only to track activity but also to understand customer behavior. Data that after time, turn into valuable information allowing online platforms to provide accurate results and customized experience, both based on user interests.

There is no better example than Amazon’s recommendation secret.

“Data is king at Amazon” – Ronny Kohavi, Director of Data Mining and Personalization, Amazon.com.

As Director of Data Mining and Personalization at Amazon in 2005, Ronny Kohavi said, the conglomerate has found value on data-driven marketing strategies; which reveals the key behind every product recommended on the marketplace.

A ‘Simple’ key

Amazon is a leader in using a collaborative filtering engine (CFE), a recommendation math-based system focused on four simple elements: previously purchased items, current shopping cart or wishlist items, reviewed and rated items and finally the most searched items.

The Practice

This powerful suggestion algorithm encourages you, for example, to buy a case that perfectly matches a phone you just added on your online shopping cart, even though you never planned to spend that extra money.  A “Frequently Bought Together” section appears on every product page, offering a more satisfying shopping experience made from users who “unconsciously” lead each other to better suggestions.

That explains what could be Amazon’s most significant metric of success; “Our mission is to delight our customers by allowing them to discover great products serendipitously,” an Amazon spokesperson told Fortune.

Moreover, we see this well executed when it comes to minimizing “junk email” while maximizing purchase opportunities; claiming why many companies have cited Amazon’s recommendation engine as one of its notable marketing features.

The Reward

Although these practices might sound simple and not as out-of-the-box as we would expect to come from a “big tech” company, believe it or not, Amazon’s recommendation method generates 35% of the sales every year.

Considering the significant success companies like Amazon have experienced by using data analysis on daily marketing decisions; we could assume that trending terms like “Big Data” or “Machine Learning” should result in a data revolution, inspiring us to not only turn our eyes to these cutting-edge elements but also to value the data our companies own today.

References

Facebook Nation: Total Information Awareness by Newton Lee
Amazon’s recommendation secret – Fortune
7 Ways Amazon Uses Big Data to Stalk You by Jennifer Wills