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Originally Posted by pwalker8
I'm pretty sure that Amazon doesn't have that information either. At least not 2, 3,5,6 or 7. You also have a lot of inference there. For example, price rarely comes into play when I chose to buy a book. So trying to mine my browsing habits for price data will give you a lot of bogus information. I might have clicked on a book, looked at it and decided I didn't want it for all sorts of different reasons, or I might have clicked on the book by mistake when my cat bumped my arm or I might have misremembered the title of the book that I was looking for. You can't know just by mining the server logs.
True market research involves a lot of talking to the end customers to understand what they like and don't like and what is important to them. Publishers do a lot more market research than you think. They do research into things like book covers, book titles and price points.
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I don't have any inside knowledge of what data analytics that Amazon is actually performing but what I have outlined are pretty basic and I'd be shocked if they don't have this data. I do know that Amazon is considered one of the leaders in big data analytics and they've been at it for a long time.
www.bigdata-startups.com/BigData-startup/amazon-leveraging-big-data/
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Amazon has an unrivalled bank of data on online consumer purchasing behaviour that it can mine from its 152 million customer accounts. Since many years, Amazon uses that data to built a recommender systems that suggest products to people who visit Amazon.com. Already in 2003 they used item-item similarity methods from collaborative filtering, which was at that time state-of-the-art. Since then Amazon has evolved and improved its recommender engine and today they master this to perfection. They use customer click-stream data and historical purchase data of all those 152 million customers and each user is shown customized results on customized web pages.
Amazon uses big data also to offer a superb service to its customers. This could be the effect of the purchase of Zapos in 2009, but it clearly helps that it ensures that customer representatives have all the information they need the moment a customer needs support. They can do this because they use all the data they have collected from their customers to build and constantly improve the relationship with its customers. This is something many e-tailers can learn from.
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There is a lot of noise in data analytics if you look at small samples but when you look at large samples it can be filtered out.
I'm sure that the big publishers know that Amazon has better data then they do (and I'm sure they're negotiating for access to it). I don't think they question that it's accurate either. I've never seen them claim it's wrong but I've seen them claim that Amazon has educated the consumer that $9.99 is the correct price and the BPH have to educate the consumer that the price needs to be higher. They don't like the answer and they are arrogant enough to think they can change the customer's mind rather then adjust their business plan to meet it.
I believe that Amazon has given them four years to try to "educate the consumer" and learn they were wrong (four years is a long time in the ecommerce world). Now Amazon is frustrated because the answer is still $9.99 (or lower) and the publishers are too stubborn to admit they were wrong.