Question

Is big data analytics used for service innovation at Amazon? If so, please write a brief description. Feel free to use any publicly available documents and internal information for the case organization background description in terms of the BDA infrastructures, data strategies, and current practices that were related to service innovation.

Answer 1

It incorporates Dynamic Pricing to Remain Competitive.

Before retailers used big data too much fr price adjustments,customers typically saw the same daily prices for products, no matter how many times they visited a website. Prices often change regularly. One explanation is that a person's willingness to buy is determined by big data platforms. An example of this outside of Amazon applies to airline ticket and hotel room costs. If people check tariffs and rates several times for the same destinations, they may find that prices are slowly increasing — or at least changing. This strategy is called dynamic pricing, and is being used vigorously by Amazon. The company is adjusting commodity prices about 2.5 million times a day, which means average commodity changes cost every 10 minutes. It can evaluate issues ranging from product pricing to available inventory, and make educated decisions about how much products will cost, thanks to the vast quantities of data the company has.

It tracks requests for transactions and return for signs of fraud.

The top-notch status of Amazon in the world of e-commerce makes it a regular target for retail fraud. The company gathers over 2,000 historical and real-time data points on each order, and uses machine learning algorithms to identify transactions with a high probability of fraud.The system prevents fraudulent transactions worth millions of dollars each year.The organization can also scrutinize suspicious return requests due to Amazon's proactive approach, with modified Big Data algorithms to meet specific needs. For example, if big data indicates a person has returned an exceptionally high percentage of items over the past couple of months, the organization may further investigate.In 2018, some customers confirmed being banned for making so many returns.

It forces people to buy more with every order.

Amazon's product suggestions are perhaps the most common to daily consumers of big data applications. It operates by providing users with similar items based on things they have already bought in their carts or products before. Then, with the introduction of Amazon Personalize, the company provided developers with a highly scalable and easy-to-use platform that gives users recommendations in almost any domain. Many companies would be able to tap into Amazon's consumer technology, offering them product choices ranging from clothes, food and more.If Amazon can effectively cater to consumers with customized choices and make them want to spend more, business profits will be increasing and people are getting the impression that Amazon is a place where they can purchase almost anything they might like.

It uses data to change Physical Stores

When Amazon purchased Whole Foods Business, it immediately began using data to alter the operations of that brand, including by reducing prices on common products. That was the first step in a much wider attempt to leverage big data analytics. Performance in that goal will help Amazon shake up the what is upermarket industry and determine how it can be strengthened. Amazon Go, the cashless convenience store service of the company, is also relying heavily on data to make it work. Sensors identify what items people pick up to purchase, and cameras make sure shoplifting attempts do not make shoppers succeed. Although the company has not gone into depth about the data it gathers about Amazon Go shoppers and why, it is likely that the company will use the data to develop its stores.

It Depends on Information to Run Fulfillment Centers.

Amazon calls its warehouses "fulfillment centers." It is no wonder the company is also using big data there. One of the more contentious uses relates to crunching data on productivity and automatically sending alerts to the workers that they are too sluggish. But, Amazon also uses data to track which products customers most often purchase and if the stock runs low.The company already has a patent for what it is calling "anticipatory delivery." That method would predict what people would want to purchase before placing orders.

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