Databases Reference
In-Depth Information
their products and perform analyses using data mining software. This allows suppliers
to identify customer buying patterns at different stores, control inventory and prod-
uct placement, and identify new merchandizing opportunities. All of these affect which
items (and how many) end up on the stores' shelves—something to think about the next
time you wander through the aisles at Wal-Mart.
Data mining has shaped the online shopping experience. Many shoppers routinely
turn to online stores to purchase books, music, movies, and toys. Recommender sys-
tems, discussed in Section 13.3.5, offer personalized product recommendations based
on the opinions of other customers. Amazon.com was at the forefront of using such a
personalized, data mining-based approach as a marketing strategy. It has observed that
in traditional brick-and-mortar stores, the hardest part is getting the customer into the
store. Once the customer is there, he or she is likely to buy something, since the cost
of going to another store is high. Therefore, the marketing for brick-and-mortar stores
tends to emphasize drawing customers in, rather than the actual in-store customer expe-
rience. This is in contrast to online stores, where customers can “walk out” and enter
another online store with just a click of the mouse. Amazon.com capitalized on this dif-
ference, offering a “personalized store for every customer.” They use several data mining
techniques to identify customer's likes and make reliable recommendations.
While we are on the topic of shopping, suppose you have been doing a lot of buying
with your credit cards. Nowadays, it is not unusual to receive a phone call from one's
credit card company regarding suspicious or unusual patterns of spending. Credit card
companies use data mining to detect fraudulent usage, saving billions of dollars a year.
Many companies increasingly use data mining for
customer relationship man-
agement (CRM)
, which helps provide more customized, personal service addressing
individual customer's needs, in lieu of mass marketing. By studying browsing and pur-
chasing patterns on web stores, companies can tailor advertisements and promotions
to customer profiles, so that customers are less likely to be annoyed with unwanted
mass mailings or junk mail. These actions can result in substantial cost savings for
companies. The customers further benefit in that they are more likely to be notified
of offers that are actually of interest, resulting in less waste of personal time and greater
satisfaction.
Data mining has greatly influenced the ways in which people use computers, search
for information, and work. Once you get on the Internet, for example, you decide to
check your email. Unbeknownst to you, several annoying emails have already been
deleted, thanks to a spam filter that uses classification algorithms to recognize spam.
After processing your email, you go to Google (
www.google.com
), which provides access
to information from billions of web pages indexed on its server. Google is one of the
most popular and widely used Internet search engines. Using Google to search for
information has become a way of life for many people.
Google is so popular that it has even become a new verb in the English language,
meaning “to search for (something) on the Internet using the Google search engine or,
by extension, any comprehensive search engine.”
1
You decide to type in some keywords
1
http://open-dictionary.com
.
