Online booksellers such as…

… and Barnes and Noble are using similar R-technology to sell more books, and to make customers smarter shoppers. Amazon derives its collaborative recommendations from customers who have a purchasing behavior similar to yours. Based on what you have bought in the past, and what others have bought in the past, Amazon advises: Dear reader, you should like these titles. And, they are usually right. In fact, their recommendations are so handy that they are Amazon’s prime marketing mechanism and their chief source of revenue growth. According to company spokespersons, “significant” numbers of users buy additional books–on impulse–because of the co-recommendations that pop up when you inspect a book.

Evan Schwartz, author of Webonomics, goes so far as to suggest that firms such as Amazon should be viewed as primarily selling intangible relationships. “Amazon should not be compared to actual stores selling books. Rather . . . the value that Amazon adds is in the reviews, the recommendations, the advice, the information about new and upcoming releases, the user interface, the community interest around certain subjects. Yes, Amazon will arrange to deliver the book to your door, but you as a customer are really paying them for the information that led to your purchase.” When you log on to Amazon you get a relationship generator, one that increasingly knows you better.



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