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How Your Favorite Stores Get to Know You

Updated on February 7, 2013
The more you buy, the more the website learns!
The more you buy, the more the website learns! | Source

If you're like me, and you grew up learning how to use a slide rule and balance a checkbook by hand, shopping on the Internet can seem a little weird. Back before the dot-com bubble burst, online shopping—or e-commerce—seemed like the bold new wave of the future. And while the online marketplace today is more competitive than it was way back when, online shopping keeps growing bigger, better and smarter.

When you log onto a website like Amazon, take a quick look around. That website is making recommendations based on what you recently purchased, as well as on all kinds of additional information you've given it. This is e-commerce personalization, and it goes deeper than you may realize. That website knows all about you, and it uses the information it collects to make recommendations it knows you'll respond to. It might sound crazy, but it's true—and here's how they do it.

Browsing the Store

So let's say you go onto a website for the very first time. It doesn't know anything about you, yet, so the product recommendation engine isn't really turned on. You aren't getting a personalized online shopping experience—but you will. From the first few clicks of the mouse, that website is watching you, tracking your movements and seeing what you're interested in looking at.

For example, when you first look at a pair of shoes, it knows that you're interested in clothing. As you look at more and more shoes, it understands what type of clothing you want—for example, if you're looking at athletic sneakers, the product recommendation engine will suggest other workout clothing. If you add a pair of sneakers to your cart, it will specifically recommend clothing that matches those sneakers. But it goes even deeper!

As you look at more and more, including things unrelated to the workout clothes and shoes, the e-commerce store learns more and more about you. It pieces together the items in your browsing history like clues, completing a picture of your buying persona based on the music, movies and books that you're interested in. And you haven't even bought anything yet!

Checkout and Beyond

When you make a purchase on an e-commerce site that utilizes personalization programs, you give it more information that it uses to make recommendations for you in the future. For example, the website learns your name and where you live, allowing it to make geographically-influenced recommendations. As you return to the site again and again, it picks up new information every time, allowing it to make better-informed recommendations for you using its product recommendation engine. Some sites even allow you to make wish lists and save products that you may want to purchase in the future—don't be surprised if you get sale emails advertising those same products in the future!

Should You Be Creeped?

It's easy to get a little wary about divulging your personal information online. When personalized online shopping is used more and more often, then, does it mean that you should be creeped out by websites monitoring your shopping habits and making recommendations?

In my opinion, not really. Here's how I think of it: The website is a store, and when it collects information about me and my spending preferences, it's like I'm talking to the same salesperson every time I go in. And I'll be honest: Most of the time, I'm actually interested in the things that an online store recommends to me, and I end up buying them! I'd rather shop online where the website doesn't offer me products that I would never be interested in, so if it can personalize the experience for me without me have to actually do anything, I say, go for it.

What Happens Next?

It's hard to say exactly where product recommendation technology will go next, but if you look at the 2002 science-fiction blockbuster "Minority Report," you'll see that the movie has at least partially predicted where we are now.

In the Tom Cruise movie, technology not unlike today's personalized online shopping has actually found a place out in the real world, so that shoppers visiting brick-and-mortar stores can experience the same personalization that online shoppers enjoy today. This happens through face recognition and optical scanners that are placed in stores—in the movie, when a character walks into a store, a seamlessly-integrated eye scanner identifies the shopper and begins making recommendations based on his spending history.

Now obviously, we're not going to be having our eyeballs scanned at the bookstore anytime soon! But it's interesting to see how this movie predicted the principle of the technology—identifying a shopper and making personalized recommendations—back in 2002. Now if only the jetpacks from that movie would become a real thing, too!

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