Out of laundry detergent? Just press an Amazon Dash Button. Out of trash bags? There’s an Amazon Dash Button for that too. What might appear like a seamless way to allow users to order common household products is a new source of data for Amazon to better understand consumer behavior.

How? By using predictive modeling. Predictive modeling is a statistical modeling technique that forecasts an outcome or behavior. This type of modeling often uses historic or current data to predict a future outcome, which can be validated as more data becomes available.

The data collected by the Dash Button is valuable to both Amazon and the manufacturers of products. Dash Buttons give insight into individual patterns of frequency of purchase into a sample of Amazon’s users. Pair this consumption data with Amazon’s rich demographic data, and Dash Buttons are giving new insights to fuel future growth for Amazon.

With this type of data available, perhaps a predictive model could anticipate future consumption and ordering behavior of customers. The future of shopping for household items could mean enrolling and letting predictive modeling take over from there. What if Amazon could accurately predict the amount of laundry detergent and trash bags to ship to you based on your past behavior? This is the future of retail with predictive modeling. 

While the verdict is still unclear if Dash Buttons are a viable, profit-producing technology for Amazon, the data they produce may be more valuable than the products they sell. Every product sold through a Dash Button is a valuable data point that will contribute to Amazon’s next generation of services and products.

To learn more about Amazon’s Dash Button’s data here, check out this article from Fast Company.

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Digging through a basement bargain bin of books, who could resist the urge to purchase Ellen Shell’s book, Cheap: The High Cost of Discount Culture, at 50% off of the cover price? A paradox to the book’s title, of course, the decision to purchase the book was an inevitable tango with a good bargain.

In a society dominated by cheap prices, we are increasingly becoming travelers in a world of foreign and unfamiliar prices. The “Age of Cheap” makes it harder to infer if the price we pay is actually the deal we believe it to be. It’s stressful to constantly renegotiate new norms for what constitutes a fair price while our relationship to pricing is positioned on a slippery slope of value and perception.

The Bottom Line on A Good Bargain

Does paying less make us wealthier? The satisfaction of finding a deal can create great personal joy, but in the long run, cheap prices can point to breaks and flaws in the value chain. The bargain price that we see affixed to clothes, food, or other items could be the result of workers earning below a living wage or materials gathered through unsustainable practices.

Cheap comes at a cost. If the consumer doesn’t pay this cost, who covers it? Workers, suppliers, and the environment are a few easy targets that help carry the burden.

Who is Ultimately Shouldering the Cost

The cost of cheap doesn’t always get paid by something or someone else either. You, as a consumer, might ultimately pay for a cheap price. Maybe you’ve purchased an inexpensive piece of furniture, then spent an entire weekend assembling it. In this case, the cost of cheap has been passed along to you by doing the assembly work. You become an extension of the factory, albeit likely lacking some critical skills and tools.

Consumers work for free, if the price is right, but are inadvertently paying for a cheap price. The initial price might make us more satisfied, but the extra labor doesn’t create wealth.

Let's Reevaluate

It’s hard to put down the 75% off coupon and walk past the deal of a lifetime, but how can we re-evaluate our relationship to price? Knowing that all of our purchases have consequences for ourselves, the environment, and the companies that make our goods, to name a few, we can begin to set our own mandate for how we consume.

We can choose to ignore a bargain and shop with our own standards in mind. The standards we choose are up to us: craftsmanship, quality, sustainability, transparency, etc.

Putting aside the flashy discount sticker, what’s your story with price? What standards guide your decisions to consume?

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Interested to know more about willingness to pay and other fundamental business concepts?

 

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Data is reshaping how problems are defined and how solutions are developed to address pressing social issues. With the evolution of data-collecting technologies and the ability to apply analytic methods in new areas, unique insights are advancing the common good through data.

These four initiatives use data analytics to bring about positive social impact:

Eliminating Medical Prescription Errors

MedAware uses analytics to search for unusual patterns in medical prescription and diagnosis data that would signal a prescription error. By searching for outliers, MedAware could potentially save lives while also reducing the medical costs associated with prescription errors.

Ensuring Equitable Working Conditions

Laborlink, powered by Good World Solutions, collects data from international factory workers using mobile phone technology. Empowering workers to report their working conditions, Laborlink collects real-time data about wages, safety, and worker satisfaction. Not only are companies better informed with Laborlink, but they can alter their practices based on this new source of data.

Saving Lives with Targeted Campaigns

DataKind, a community of data scientists and organizations, worked with data from the American Red Cross to identify counties in the US that would benefit from smoke alarm installation campaigns. The team’s work combined Red Cross data with other data sets to develop targeted recommendations for delivering the Red Cross program.

Driving Governmental Progress

In HBX’s home city of Boston, local officials are using data to drive government progress. From the data dashboard that hangs in the mayor’s office displaying critical citywide data, to monitoring the city’s trashcans to ensure timely collection, data is helping to build a stronger Boston.

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