AI and Machine Learning Helped Amazon Become a Trillion-Dollar Company
Wed, April 21, 2021

AI and Machine Learning Helped Amazon Become a Trillion-Dollar Company

Jeff Bezos, founder and president of Amazon.com, started selling books online in 1995 – not knowing that it would be the biggest internet-based company in the world after 25 years / Photo by: lev radin via Shutterstock

 

Jeff Bezos, founder and president of Amazon.com, started selling books online in 1995 – not knowing that it would be the biggest internet-based company in the world after 25 years. Now, it holds the title as the world’s largest online retailer with over 145.2 million mobile users as of March 2019. It’s also worth mentioning that the company is way ahead of its competitors. Walmart, the second-ranking shopping app, had a monthly mobile app audience of only 76.45 million users.

Originally, Bezos planned to sell only books but in 1998, the company expanded into selling computer games and music. During the same year, Amazon also expanded its services internationally by purchasing other online bookstores in the UK and Germany. Other services have also been added throughout the years, from shipping fresh produce to drone delivery.

Today, Amazon continues to grow even more by developing new products, different service offerings, and acquisitions. All of these have helped to enlarge its customer base. Oberlo, an online site that allows you to easily import products from suppliers directly into your Shopify store and ship directly to your customers, stated that 89% out of more than 2,000 US customers agree that they are more likely to buy products from Amazon than other eCommerce sites. It also showed that 98% of the respondents who purchase on Amazon daily and 99% who purchase a few times a week agree that they are drawn to Amazon over its competitors. 

As Forbes once said, “Amazon has earned our trust by delivering the products we want, on time, intact, in the same branded brown boxes—consistently.” One thing that makes Amazon more successful than its competitors is that it is committed to providing a consistently reliable online shopping experience for consumers. The ability to search, select, and purchase products from the comfort of your own home has become an important innovation, which Amazon continues to lead.

A crucial factor that has been driving the success of Amazon is artificial intelligence. A perfect example of this is Alexa, one of the company’s most visible AI applications. Throughout the years, it has become a household name and continues to help and accompany users wherever they go.

The Role of AI and Machine Learning

Amazon is known for providing customized recommendations to its users. The latest reports show that Amazon’s recommendation engine drives 35% of total sales – all thanks to AI. Over the years, the algorithms that they are using have improved more and more. In the past, the company used to provide product recommendations based on what users already said they liked. Now, the recommendations have gotten more dynamic.

“In the past, it might take longer for the algorithms that we use to realize that people who bought these shoes also bought this top. And with some of the new techniques, we can detect those things earlier, those correlations. And then surface the new top earlier in the season,” Jeff Wilke, the CEO of Amazon’s worldwide consumer division, said.

According to Wired, a monthly American magazine that focuses on how emerging technologies affect culture, the economy, and politics, machine learning has become much more effective for Amazon in recent years. It has led to dramatic gains in computer vision, natural language processing, and speech. With that, the company has introduced Amazon AI, a set of AI services that offer machine learning and deep learning technologies for Amazon Web Services (AWS) clients. It leverages text/voice chat to interact or answer their queries. Amazon AI can convert text into speech, perceive human languages, identify places based on images and objects, and more.

Today, the AWS Marketplace has been offering a wide range of machine learning and AI software solutions from different vendors. “It is a renaissance, it is a golden age. We are solving problems with machine learning and artificial intelligence that were in the realm of science fiction for the last several decades. Natural language understanding, machine vision problems, it really is an amazing renaissance,” Bazos said. 

Aside from this, there are many more Amazon AI and machine learning efforts that are helping the company maintain its worldwide status. For instance, these technologies give AWS users access to cloud-based tools, power the Alexa voice assistant, guide robots carrying shelves full of products directly to fulfillment-center workers, and allow shoppers to grab items and walk immediately out of Amazon Go stores.

Amazon is known for providing customized recommendations to its users. The latest reports show that Amazon’s recommendation engine drives 35% of total sales – all thanks to AI / Photo by: Sundry Photography via Shutterstock

 

AI-Driven Efforts in Amazon

Most of us have seen how Amazon continuously develops AI tools for the benefit of its consumers. AI and machine learning are driving its algorithms for demand forecasting, product and deal recommendations, product search ranking, fraud detection, merchandising placements, and more. Here are some of the developments they have made throughout the years:

1 - AI-powered fashion discovery

Earlier this year, Amazon introduced a new feature called StyleSnap that would use deep learning for object detection. It would identify the various apparel items in the image and categorize them into classes like dresses or shirts. According to Brand Minds, an online site that aims to inspire people to create a better world, the feature presents consumers with recommendations for similar items on Amazon that match the look in the photos.

2 - AI optimization in the fulfillment center

Amazon staff are able to keep track of all products and transactions through the help of computer vision systems that could analyze images. Based on the given data, AI solves a large combinatorial optimization problem and decides which orders to pick at the same time to get them in the same box. All of these decisions happen in real-time. 

Indeed, AI and machine learning have so much potential that they can make a company successful. If they are utilized properly and efficiently, there’s no doubt that they can help businesses achieve their goals.