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Attention Holiday Shoppers, Amazon Knows If You've Been Naughty Or Nice

December 6, 2018 2:01 p.m.

Attention Holiday Shoppers, Amazon Knows If You've Been Naughty Or Nice

GUEST:

Claudiu Dimofte, associate professor of marketing, San Diego State University

Related Story: Attention Holiday Shoppers, Amazon Knows If You've Been Naughty Or Nice

Transcript:

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

You know who you are the person who may have just or be about to or be in the process of placing an order on Amazon and you are not alone. Holiday shopping season is Amazon's Prime Time as consumers sale through the process of picking gifts with the touch of a button. The potential downside is that Amazon knows who you are too. Maybe even better than you know yourself. It's cutting edge consumer tracking methods go way back in your ordering history and can reveal a lot about your habits and lifestyle. Joining me is Dr. Claudio Dumas.

He is associate professor of marketing at San Diego State University and Professor Timofey welcome to the program. Thank you for having me. It's convenient you know to have Amazon know your address your credit card and shipping information especially if you make frequent purchases.

But what else does the company know about us Amazon and much of the other online retailers are actually quite good at inferring a lot of your personality traits if you will beyond mere purchase patterns that to displayed in the past. Some of the classic examples have to do with Target the retailer for example was in the news a few years back because they were so successful at targeting. Turns out they sent some coupons or promotional materials to the young one for baby products. And this one was. Turns out an underage girl that was living with her parents and that's when the parents learned that the girl was pregnant.

And that's based on target observing the online browsing behavior and searches that that person had engaged in. And this is one of these extreme examples of how proficient the marketers have gotten learning about who we are. And Amazon does the same thing. And it was on I would say even Wal-Mart on their online division. Most of the retailers online engage in this kind of tracking behavior.

So the suggestions that we see pop up on the screen when we go on the Amazon Web site that's based on the information that Amazon has about us.

Yes the old school way to perhaps look at things used to be what's called customer relationship management CRM in an online context of men receiving at home perhaps coupons in the mail for things that were obviously not random but actually based on their previous purchase behavior with a retailer like let's say Ralph's or Vons or any other grocer. The idea behind CRM and much of this more modern version of it online tracking has to do with the fact that any interaction that a company or a marketer has with a customer will be informed by previous instances of interactions with the customer.

So in other words the market learns more and more about every customer as time passes party just from the interactions that they have with the client. But beyond that there's other sources of information online that have to do with things that you as a consumer may have done in other instances that have nothing to do with the retailer.

How long does Amazon keep this information.

As far as I know there is no limit on how long I was on keeps it. And Amazon is in the business of cloud storage as well so I'm not concerned about their ability to actually hold as much data as they want for as long as they want. Do you think it's secure. I'm not perhaps in the best position to judge how secure today's. I think most marketers most companies like Amazon do try to make that as secure as possible. I'm not sure there's absolute levels of security I'm sure these hackers this is going to assume arms race between companies trying to protect their data and hackers trying to get access to it.

There's been a lot of controversy about organizations selling information Facebook selling information about the people who use Facebook. Is Amazon selling information about its customers.

As far as I know and based on what Amazon displays on their Web site if you dig for information about it it turns out they do not. However there is a cautionary note here about the fact that Amazon is a huge company involved in all aspects of marketing and logistics and such does interact with a lot of third party companies including firms that sell their products on the Amazon platform including logistics shipping companies that need information about you to deliver those products. So there is a limit to how much Amazon perhaps could hold onto the data for themselves.

But they do share it with some partners beyond that so far as I know they do not sell it because it's too valuable to them. That's part of it. And I think beyond that it's the fact that there's a level of consumer trust that a player like Amazon still enjoys. And I'm pretty sure they don't want to tamper with that and avoid and they do look to avoid any breaches of consumer trust.

Well we know how convenient it is. But let me ask you this is there a problem if Amazon has a lot of information about your lifestyle and purchase history. Is it a threat in any way.

That's an interesting question perhaps to ask yourself because the implicit perhaps assumption just based on how you introduced the topic today was that there is some kind of scary disadvantage to the fact that these people know as much as they do about us at face value I think most consumers and I think research shows that when they're being asked how much they enjoyed being tracked or created or even accepted the vast majority about 85 percent I think argued that they would not like to see that happen that they don't want to be tracked that they don't get the value from targeted advertising for example on the flip side there's the behavioral results which are quite different and dissonant with this and suggest that consumers actually do enjoy personalized e-mails and products and offers and they do purchase those.

So the disconnections will be pretty obvious between self reports with consumers tell us they're concerned with issues the privacy issue and I'm going to hand the fact that they do actually as consumers enjoy the results of better offers being put forth.

So we think we don't like being tracked but in the way we act. Oh that's a good suggestion.

Absolutely. In a way you can look at it as a distinction between process and outcome. Perhaps this is more and his scholarly academic language but the party itself seems to be unpleasant to consumers. They don't like to think about that and would appreciate it if they wouldn't be tracked. But on the other hand when it comes to the outcome the fact that they are being offered better products targeted in ways that offer things that they're more interested in prices perhaps that are better for them that they do appreciate.

I've been speaking with Claudio Dymov. He is associate professor of marketing at San Diego State University. And Professor thank you.

Thank you very much.