On Prime Day, Amazon issues up some of the best deals of the year, looking to get more and more customers signed up for its added-value membership. From radical price drops on Echo devices to free digital subscriptions, shoppers have come to expect and look for remarkable deals on and around the retailer’s annual Prime Day. This year, they also encountered a different kind of promotion: a direct $10 credit to their account if they signed up to receive the extra services of the comparison shopping tool called Amazon Assistant.
What could be wrong with that? An approximated 7 million people already have signed up for Assistant, which surveys various websites to determine which one has the best prices for various products customers seek. By installing the add-on service, browsers feel confident that they are getting the best deal on various items they want; they also might receive alerts when a particular item is on sale somewhere on the web.
Yet there’s a catch to the great deal and helpful service: To sign up and receive the credit, people also must give Amazon permission to access their web search behavior, including what websites they peruse, when, and in what order. Such information is required to support the price comparison service; for example, Assistant needs to know if a shopper visited walmart.com to look for a table lamp, so that it can determine the prices for the same décor on Amazon, Overstock, and so forth. That is, the information is required for the service to function as promised and provide the comparison that users seek.
But it also gives Amazon a vast treasure trove of data about consumers. In addition to competitive retailers, the Assistant tracks what content the users look at on Hulu, Rotten Tomatoes, and IMDB. Thus it learns not just what somebody plans to purchase but also what kinds of movies they like and which actors appear to be of most interest to them. Such insights become virtually invaluable when it then comes to marketing to shoppers. If Amazon knows that a browser keeps checking on the release dates for the next Avengers installment for example, it also learns that it is likely to prompt a sale if it promotes Iron Man toys, a Scarlet Witch costume, or digital access to the new Thor movie to that consumer.
It is not as if Amazon is the only company to collect such information. Google has far more of it, from far more users, because the inherent search function it provides to millions of people gives it a constant source of data about what consumers want and which sites they click to when they receive a long list of results. Technology called tracking pixels, installed on a vast majority of web pages, also means that Google can determine where its users go, even if they don’t start a browsing session on its search site.
The difference is that Amazon is, ostensibly, a retailer, not an information aggregator. That role seemingly is changing though. Amazon will always be a place people can go to purchase virtually any product they need, but it also is increasingly a data and advertising services provider to other firms. Because so many people willingly give Amazon so much information, it possesses valuable information that other firms will pay to access, such that the revenue that it ultimately earns from consumer sales actually involve multiple sources.
In another difference, Amazon Assistant is explicitly tracking precisely where users go for the entire browsing session. Unlike the tracking pixels, which are more broad based, the Assistant detection system follows a specific segment of consumers in greater detail, providing more in-depth insights into how particular consumers shop. Again, such insights are critical to the businesses that rely on Amazon to provide them with necessary data.
We might bet though that Amazon is charging those business clients a lot more than $10 to give up its data. Should consumers be doing the same?
1. How much is data worth? How might individual consumers come up with a reasonable estimation of what a
2. If they gain access to these data from Amazon Assistant, what kinds of market research can other firms achieve?
Source: George P. Slefo, “Amazon Wants to Give Users $10 in Exchange for Tracking Them All Over the Web,” Advertising Age, July 16, 2019; Jeffrey Dastin, “Amazon Offers $10 to Prime Day Shoppers Who Hand Over Their Data,” Reuters, July 16, 2019