Amazons Most Prized Possession: Our Personal Data
Ever since the inception of the internet, individuals personal online privacy has diminished. While there are a variety of different reasons that companies may try to access our personal information on the internet, it is a reality that is becoming increasingly unavoidable in recent years. Corporations and businesses often use the data they collect to more accurately target adds to consumers in hopes of monetary gains. This is why it is common to have pop up adds on various websites from searches you either made on Amazon. Despite the use of big data contributing to the explosion of Amazon in the retail market, the methods in which they use consumers data may be an invasion of privacy.
How Does Amazon do this?
Amazon goes about collecting data in several different ways in order to most accurately personalize your online experience. Primarily, Amazon will record your purchases and searches on their platform through their collaborative filtering engine technology, also known as CFE. This allows Amazon to recommend related items that may interest the user. This method of data collection and application contributes to 35% of their data annually, which is a significant portion. Secondly, Amazon uses a tool called price optimization, which sets the price of a given good based on: “your activity on the website, competitors’ pricing, product availability, item preferences, order history, expected profit margin and other factors”. This allows Amazon to raise the price of goods when their data algorithms predict that a consumer is willing to pay more for a good, and visa versa. It is estimated that this tool increases Amazon’s sales 25% annually. While these aren’t the only tools that Amazon uses to maximize its sales, these are the most invasive yet effective ones.
How Big is This Industry?
The big data industry is growing at an exponential rate, which is worrisome to consumers around the world. According to leading studies, the bid data market in 2018 was worth 40 billion dollars, and expected to grow to 103 billion dollars by 2027. With the increase in focus by companies such as Amazon on the big data market, it is important for consumers to recognize the affects of this growing market. Not only is the monetary value of this industry increasing by the day, but also the amount of data we contribute to databases increases as we use the internet. As our society becomes more dependent on the use of technology, it is inevitable that we will be giving more of our information away online. Online users often times give up their privacy either unknowingly or because of their laziness. Companies can hide the methods in which they collect the data within unnecessarily long “terms and services” contracts that the vast majority of people don’t read. This not only keeps the user in the dark about the privacy of their personal information, but also fails to inform individuals how to protect their privacy online.
Tradeoffs We Need to be Aware of:
As our technology continues to improve, it is evident that our experience with the internet will become increasingly seamless. While this may be attractive to some consumers, this benefit comes with a large tradeoff. In order to interact coherently with the internet, it is imperative that data be collected about our habits online. By giving up this bit of personal privacy allows corporations to further tailor their websites to our needs. It is up to consumers around the world to determine if they are willing to trade their personal privacy for a smooth online experience.
Problems that Arise from Big Data: Amazon Addition
As we look at the development of Big Data, it is necessary to discuss how our relationship with the internet will affect our lives. Not only will this new development affect our online practices, but also our daily lives. When Amazon provides a list of suggested products to customers based off their previous purchases, and consumers buy these products, Amazon is inherently affecting how we spend our money and the products we use on a day to day basis. In addition, when Amazon price discriminates based off what their algorithms estimate we are willing to pay for certain products, they are regulating who can get what products and for what price. While these affects may seem small in the short run, they have the potential to control what groups of consumers have better access to specific products, based off of their algorithms derived from our online data.
- Simplilearn. “How Big Data Is Used In Amazon Recommendation Systems | Big Data Application & Example | Simplilearn.” YouTube, YouTube, 26 July 2016, www.youtube.com/watch?v=S4RL6prqtGQ.
- Wills, Jennifer. “7 Ways Amazon Uses Big Data to Stalk You.” Investopedia, Investopedia, 12 Mar. 2019, www.investopedia.com/articles/insights/090716/7-ways-amazon-uses-big-data-stalk-you-amzn.asp.
- “Global Big Data Market Size 2011-2027.” Statista, www.statista.com/statistics/254266/global-big-data-market-forecast/.
- “Software, Not Hardware, Will Catapult Big Data into a $103B Business by 2027.” SiliconANGLE, 4 Oct. 2018, siliconangle.com/2018/03/09/big-data-market-hit-103b-2027-services-key-say-analysts-bigdatasv/.