In 2018 all eyes are on Amazon. Bezos got crowned the wealthiest man in modern history, and Amazon is overtaking Apple as the most valued tech company in America.

Which begs the question, what makes Amazon so successful? I believe their success comes from the ingenious way they use your data.

Today I’m going to talk about three incredibly smart ways Amazon uses your data to empty your wallet. Let’s dive into it.

Recommended For You Section

Go to Amazon right now and log into your account, I’m sure you’re going to see something similar to this.

The ‘recommended for you’ section uses data from your buying habits to recommend items that you’re likely to buy. The psychology here is very intuitive; as human beings, we have a lot of wants. We want things that we don’t even know exists; its Amazon’s job to show us that they do.

As you buy more things on Amazon, you create a profile of your buying habits. From this profile, Amazon’s algorithm can determine what type of products you’re more likely to buy.

For example last week I was buying chia seeds for a kind of snack I wanted to make. Take a look at the picture above, Amazon’s response was, ‘Hey we see you like healthy seed based products, here’s a few more you should check out.’

All of what I’ve mentioned about the ‘recommended for you’ section ties into a proven principle of persuasion called consistency. The principle of consistency states that you are likely to repeat a similar action that you’ve done in the past. Amazon knows this and with the help of your data they can utilize this principle to sell you more stuff.

Amazon Best Seller List

If you’re like me, from time to time you’ve gone to the best seller list out of curiosity. I remember for a time fidget spinners were at the top, and I couldn’t figure out why (maybe they’re just that fun!?). The ‘best seller list’ is a collection of the best-selling products on Amazon across each category based on buying data from users.

But what reason would Amazon have for giving, you, me, and everyone access to this data? If you think about it logically, Amazon should want to protect that data.

Amazon shares this data with us because it helps them sell more products. Yes, the ‘best seller list’ is ingeniously designed to help boost sales and awareness for products. The ‘best seller’ list achieves this goal by using social proof.

The concept of social proof is simple, in our heads it plays out like this – ‘If a lot of people are doing it, then I should be doing it as well.’

Similarly, when we come across a product on the best seller list subconsciously our mind goes – ‘Hey lots of people are buying this, wonder why people are buying it?’ That spark of curiosity is more than enough to cause a sale.

Frequently Bought Together

And who could forget, right before going to the reviews we always run into the dreaded ‘Frequently bought together’ section. I have a confession to make; this section has caused me to buy more things than I would have liked. If my anecdotal evidence doesn’t succeed in convincing you, I’ll go into the genius of this section.

First, it combines the two psychological principles (Social Proof & Consistency) we saw above. Think about it; Amazon has access to data of all transactions for any product. This makes it easy for Amazon to see trends in consumer buying habits for any product. And once Amazon sees a trend which looks financially beneficial they start pushing for it using the ‘Frequently bought together’ section.

Not to mention, if two products are told to be bought frequently together it also gets you wondering why that’s the case. In some cases, it might be enough curiosity for you to buy the product just to try it out.

It’s subtle, but it’s powerful. Using data from buyers (that includes you) Amazon can make compelling recommendations.

Is Your Data Safe?

After learning about all of this, you’re likely wondering if you should be worried about how your data is being used. The answer is yes, anytime your information is being used to manipulate your decisions, you should be concerned.

But is there anything you can do to make sure Amazon doesn’t use your data? Yes and no, let me explain.

If you decide to use Amazon, there’s nothing that you can do. As long as you buy things on Amazon, your purchase history will be available to Amazon. The only way you can stop Amazon from using your data is not to use Amazon. You’ll end your data going to Amazon, but on the other hand, you’ll miss out on the convenience of Amazon.

Also, as long as you use any e-commerce platform, your data is being collected. It’s not just Amazon who’s a culprit; I’ll bet money every platform is doing the same.

Now that you know how your information is being manipulated, you can be more aware of how things work. Your data is important, and you should be cautious of how it’s being used.