Remember when Amazon first came along? That was 20 years ago in 1995. That same year, eBay arrived — and shopping as we formerly knew it was about to change dramatically. PayPal arrived in 2002, addressing concerns about online payments. Despite the Dot Com Bust and the Great Recession, online shopping is alive, well, and continuing to evolve. What’s shaping the online shopping experience today? Data.
How data impacts the shopping experience
Amazon is the perfect example of how data collection can impact the shopping experience. Let’s say that you’re searching for a new kitchen gadget, a pizza cutter, on Amazon. One of the pizza cutters you’re interested in looks good, and Amazon helpfully suggests a pizza pan and a pizza stone to go with your purchase. Yes, Amazon wants to sell more products to you, but these aren’t random upsells; they’re suggestions built upon real data and presented to you under the “Frequently Bought Together” section.
If you scroll down the page, you’ll also see “Customers Who Bought This Item Also Bought” and “Customers Who Viewed This Item Also Viewed” sections.
Meanwhile, whether you buy the pizza wheel or not, Amazon will keep that data on file. When you log in to Amazon in the future, expect to see related suggestions and recommendations. The more data Amazon collects about you, the more personalized your shopping experience becomes. You’ll also start to notice more relevant email offers.
Online retailers also use data to determine the ideal reorder point for items such as laundry detergent, shampoo, ink cartridges, and other consumables. Again, we can thank data for optimizing these recommendations.
Data also impacts pricing — potentially in real time. For example, algorithms can be used to set prices based on demand, inventory levels, and other factors.
Offline retailers use data, too. The last time you swiped your rewards card at the drugstore, your purchase was captured and associated with your account. The next time you shop at that particular chain, your receipt may contain coupons related to your past purchases .
How data impacts package delivery
The packages that ultimately arrive, whether ordered online, via a catalog, or over the phone, are also affected by data. This may start at the point of sale and continue on in conjunction with the shipping carrier. For example, an online retailer will likely use address validation to verify the accuracy of your address and correct any errors such as a misspelled street name or transposed ZIP code. From there, the closest fulfillment center will be selected to ensure a timely delivery. Once the carrier gets involved, data will be used to determine the most efficient and cost-effective delivery route. As the saying goes, they have it down to a science — in this case, data science.
Expect even more sophisticated data collection in the future. For example, some retailers are using location-based tracking and Web beacon technologies to track your movements in a store, detect your presence, and present you with instant offers. Omni-channel fulfillment is also hot, and data collection can help retailers to provide a seamless shopping experience across all of their channels. For example, when you check out at a department store, the clerk may be prompted to suggest a particular product based on the items you’ve previously looked at on the company’s online store.
We’ve come a long way since 1995. What will shopping look like 20 years from now?