Taking Online Personalization To the Limit

Amazon's Web site simply oozes personalization. Customized to meet and greet returning customers as if they were walking into their corner bookstore, the site's storefront or "introduction page" pops up a window of recommendations, based on preferences and past buying habits. Among the various tabs at the top of the page is one called "<your name here>'s store," where the company lists a wide range of products that it thinks you might be interested in.

And that’s just scratching the surface at Amazon, a company largely recognized as a pioneer in online personalization. Using collaborative filtering technology to make reading recommendations to each customer based on the purchases of other customers, the company for years has allocated both money and resources to upgrading its personalization capabilities and, as such, has implemented multiple versions of a number of personalization technologies.

Amazon records what a shopper purchases and then matches the acquisitions to the aggregated purchases of other shoppers who have bought similar products. By comparing what an individual shopper has purchased to aggregates of what shoppers with apparently similar tastes have purchased, has come up with, for example, a "new for you" feature. The features can suggest, for instance, that based on a certain book purchase, a shopper might like a certain newly released music compact disc.

Amazon shoppers also can set up lists of "trusted friends" to see what people whose tastes they trust are buying, and individual shoppers can set up "best-seller" lists of favorite purchases, review them, and make the reviews public; other shoppers can rate the reviews according to how helpful they found them.

The strategy appears to be working. Amazon had 2007 2nd quarter net sales of $2.89 billion and has added clothing to its mix of books, DVDs, toys and electronics products. In a time when many other dot-coms were shutting down and their executives returning to the "real world". Amazon persevered, boosted its offerings and today ranks as one of just a handful of truly successful online-only companies.