International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
Lessons from Amazon: AI-driven Marketing Innovation
Analyzing and Comparing Trends from AI-based Marketing Techniques at Amazon
Pranav Suri
1. Introduction
ArtificialIntelligence(AI)ischangingthewaybusinessesapproachmarketingbyhelping usedatatobetterconnectwith customersandtomakesmarterdecisions.
ThispaperlooksathowAIisusedinmarketing,focusingonitsapplications,advantagesandchallenges.
AItoolsatAmazonstudycustomerdata,whichhelpsmarketerscreatepersonalizedcontentandspendtheirbudgetmore effectively. Some common uses of AI include chatbots for customer support, price adjustment, and product recommendationsbasedoncustomersentimentsandchoices.
Advantages of AI in marketing are significant. AI makes operations more efficient by analyzing customer behaviour and interactions,ensuringtherightpeopleseetherightmessageattherighttime.
Somecommonmarketingtechniquesused:
1. Chatbots and Virtual Assistants
Chatbots are designed to deliver human-like interactions using AI. They are often integrated into websites to assist with customerserviceortofacilitatethesaleofproductsandservices. Nowsocial media platformsarealsoincludingthemin their products. The chatbots are trained on the basis of human interaction to get more humane feel. They restructure customerengagementintomorescalableandtailoredinteractions.
Insteadofhumanhelplines,thechatbotsactasthefirststeptocustomerresolutionwithtacklingcommoncomplaintsand issues.
IT consulting companies are also offering AI chatbot systems to businesses in different sectors like retail, healthcare, technology,etc.
2. AI on advertisements
Inthecomingyears,marketer’sjobwillbetoaccesscustomerdatabaseandfeedittoAI.
Advertisement(Ad)industry’scorebeliefistogivecustomizedrecommendationtoitsusers.However,inthepast,general advertisementswerecreatedduetomultipletypesofcustomers.
AIhaschangedthisscenario.ThemarketerscancustomiseAdstotargetawidepopulationwithpersonaltouch.Insteadof merelyfocusingonloyalcustomerbase,AIcantargetnewcustomersusingAdswithpersonalization.
Shopping sites track the customer’s preferred products and show Ads such that customers have more chance of buying theseproducts.
3. Visual and Voice Search
Visual and voice searches have become major achievements in marketing. Various websites are incorporating voice and visual search to market their products. People are from different cultures and use different languages. Some people who areunabletotypecanspeakandfindthedesiredobject.Socialmediaplatformsareincorporatingthesefactorstoincrease contentconsumptionforthemasses.
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
4. Predictive Analytics
A marketer’s job is to make decisions based on data. Human brain can think of limited solutions but AI can contemplate manyscenariosbasedondataandgenerateallpossiblesolutions.
Examples:
1. Amazon uses AI-based recommendation system where it tracks user search, orders and preferences to offer productsandservicesclosesttothecustomers
Effect: Enhancesopportunitiesforcross-sellingandupselling,greatlyboostsrevenue.
2. NetflixleveragesAItoassessviewingpatternsandforecastwhichshowsorfilmsusersmayfindappealing.
Effect: Enhancesuserretentionandengagementwithhighlytailoredrecommendations.
3. Coca-Cola employs AI to capture user sentiments and build campaign based on current social topics so the massescancorrelatewithit.
Effect: Facilitatesimmediatemodificationstocampaignsandimprovesmanagementofbrandreputation.
4. FacebookusesAItoanalyseuserpreferencesandshowAdsbasedondemographics,culture,etc.
Effect: EnhancesAdrelevanceandimprovescampaignefficiency.
2. Technical aspects of incorporating AI in marketing
AI in marketing involves models using optimization techniques, automated processes, decision making and data driven insights.
HerearesomewaysofincorporatingAI:
1. Data Collection and Processing
Data is one of the most important factors in marketing. Data can help the marketer analyze market trends andmakedecision.
Technicalconceptsinvolved:
a. Data Sources: Customerdatalikesocialmediaactivity,purchasehistory,andbrowsingdata,aswellas marketdatalikemarkettrendsandindustrybenchmarkscanbeusedtopredictoutcomes.
b. Data Processing: Streamlining of data involves extracting data from various sources, transforming it accordingtostandards,andloadingitontoresearchsystems.
2. Customer Distribution
AI distinguishes between users or customers based on behavior, preferences and demographics for target campaigns.
KeyAItechniques:
a. Clusteringalgorithm:DBSCANandothertechniquestosegregatecustomers.
b. Predictiveanalysis:Gradientboostingforcustomerlifetimevalue.
c. Naturallanguageprocessing(NLP):Analyzingcustomersentiments.
3. Predictive Analysis
AIpredictsscope,trends,andcustomerbehaviorstosupportplanning.
a. Regressionanalysis:Linear/logisticregression
b. Timeseriesanalysis:ARIMA,LSTMsforseasonalsalesprediction
c. MachineLearning(ML)models:MLmodelshelppredictoutcomesofunknownnature.
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
4. Chatbots and Conversation AI
AIchatbotsarethenewcallcentres.Theyanalyzehumaninteractionandoffersolutions.
a. NaturalLanguageUnderstanding(NLU)providetheframeworktodevelopchatbots.
b. GPT-basedconversationmodelsareusedforresponsegeneration.
5. Content Creation
Contentcreatorsandconsumersarebothgrowingexponentially Producingcontentrequiresskillandtime. Therefore,AIisusedtohelpgenerate,optimizeanddistributecontent
3. Chatbots
a. Textcontent:GPTandothertoolsareusedtocreatetext-basedcontent.
b. Visualcontent:AIisusedtocreatevisualmodels.
c. Videoediting:AIisusedforcontentresizing,cropping,etc onthedesiredcontent.
ChatbotsorvirtualassistantsarethemostcommonapplicationofAIinmarketingandcustomerservice.Chatbotscanact aspersonalassistantwhileshopping, ascustomerserviceagentwhileloggingacomplaint,orasmessageautomationbot whiletextingsomeone.Therearevariouswaystodeploychatbotsbasedontypeofservice.
HereisthealgorithmtodevelopanAIbasedchatbot:
1. Defineusercase
Thepurposeofdeployingchatbotshouldbeclearlydefinedsothechatbotcanbetrainedaccordingly.The purposemaydependonuse-socialmedia,onlineretailers,serviceprovider,etc.
2. Collectdata
Thisstepinvolvesgatheringdataonwhichthechatbotcanbetrained It includes FAQs for the bot deployed for customer service, product details for retail digital assistant, or basicgrammarforchatassistbot.
3. Chooseplatformandlanguage
This step involves finding the right platform on which the chatbot will be developed and choosing the languagelikepythonorJavaScript.SomeplatformsareRasa,Dialogflow,andMicrosoftBot.Theplatform choice depends upon customization requirements and platform limitations.
4. BuildNaturalLanguageUnderstanding(NLU)
ThisstepinvolvestrainingtousethedatagatheredusingNLUengine.Thedeveloperdefinesthecontext andintent.Thechatbotistrainedwithdataasperspecificexamples.
5. Defineconversationalflow
When we are communicating, there is a flow in conversation. Flowcharts can help visualize interaction between the user and the bot. At the time the chatbot is trained on data, defining the flow is helpful in enablingthechatbottocommunicatewiththeuserjustlikehumanbeing.
6. Integratebackend
Thisstepinvolvesintegratingthechatbotintothewebsitesandtheplatforms(e.g.,customerrelationship management(CRM)andinventoryforretail-basedbusinesses)
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
The chatbot responds dynamically to each input by the user, ensuring an interactive and adaptive exchange.
7. Createresponse
For unknown queries, the fall-back response is defined or advance language model like GPT are used to redirecttheusertotemplatesorrule-basedresponses.
8. Testanddeploy
Thisstepinvolvestestingthebotwithalltestcasesandthendeployingittotheplatformlikesocialmedia websiteorapplication.Thechatbotisintegratedforplacement,usuallyatthefront-endofthewebsite
9. Maintainandimprove
Thechatbotisadvancetrainedbyfeedingnewdataprovidedbycustomers.Thisinvolvesfinetuningand retrainingforadvancedresolution.Theanalysisofchatbotlogshelpsunderstandcustomerrequirements.
Figure1:Flowchartforstep-by-stepprocessinAImarketing Reference:https://www.researchgate.net/
4. Amazon and AI marketing strategies
AnoverviewofAmazon’ suseofAItechnologiesinmarketing:
1. Recommendation and Personalization Systems: Amazon’srecommendationengineusescollaborativeand content-basedfilteringtomakeproductrecommendationsbasedonuserpreferences,pastbrowsingactivity, and order history. The highly customized user experience on the website and app increases sale and encouragescustomerengagement.
2. Advertising on Amazon (AI-powered Ads): AIisusedbyAmazon’sadvertisingplatformforcustomizedAd placement and real-time bidding. By examining user behavior keywords and historical data, the predictive analytics and NLP techniques maximize Ad performance. This guarantees a greater return on investment (ROI)foradvertisersanduser-specificcontent.
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Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
3. Alexa and Voice Search Marketing: WiththehelpofAI,Alexacancomprehendandreacttovoiceinquiries while making personalized product recommendations. Voice shopping powered by Alexa makes purchases easier.Brandsusevoice-enabledmarketingcampaignstoincreasediscoverabilityandengagecustomers.
4. Predictive Analytics to Forecast Demand: Using deep learning models and time series analysis, Amazon uses AI to forecast demand trends. This ensures effective inventory management, prompt marketing campaigns,andcustomizedpromotionsbasedonseasonalpatternsandexpectedconsumerdemands.
5. Promotions and Prices that Change: Based on market demand, competitor analysis, and consumer behavior, AI dynamically modifies product prices. This makes it possible for Amazon to run time-limited promotions,offercompetitiveprices,andgenerateurgencytoexpeditepurchasesandincreasesales.
6. AI and Amazon Prime: Amazon leverages AI to improve Prime member experiences through Prime Video contentpersonalization,deliveryrouteoptimization,andexclusiveproductrecommendations.Inaddition,AI helps with loyalty plans and targeted promotions which improves customer retention and increases subscriptions.
7. Virtual Assistants and Chatbots: Chatbots with AI capability automate marketing and customer service interactions. Using conversational interface, they propose products, answer consumer’s questions, and facilitate transactions. NLP is used by chatbots to comprehend user intent and ML is used to retrain and improvethechatbotsovertime.
8. AI in Supply Chain and Inventory Management: During promotions like Prime Day or Black Friday, AI forecastsproductdemandandautomatessupplychaindecisionstoguaranteeavailability.Byreducingstock outsanddelays,thisintegrationenhancesmarketingexecutionandcustomersatisfaction.
9. AI Marketing Automation: AI automates drip campaigns for product launches, email campaigns, and abandonedcartalerts.AmazonensurestimelyandpertinentcustomercommunicationbyusingMLtoanalyze userbehaviorandtoinitiatecustomizedworkflows.
5. Amazon as case study
Amazon’suseofAItechnologieshasimpacteddifferentareasofitsbusinessoperations.Theseimpactsinclude:
1. Increased Sales and Customer Engagement: RecommendationenginesdrivenbyAIhavegreatlyimproved consumerinteractionandnowaccountforabout35%ofallpurchases.Revenueincreasedby13%asaresult ofthisindividualizedapproachandinearly2024totalsalesreached$143.3billion. - The Guardian.
2. Workforce Development and Skill Evolution: TheworkforcedynamicsatAmazonhavechangedasaresult of the implementation of AI. Despite workforce reorganization brought on by automation, Amazon still employs over a million people worldwide with roles changing to concentrate on managing and maintaining automatedsystems.Intheirnewfacilities,thecompanyplacesastrongemphasisondevelopingcareerpaths andskilledemploymentopportunities - The Times and Sunday’s Times.
3. Higher Capital Expenditures: Capitalexpenditureshaveincreasedsignificantlyasaresultofinvestmentsin AI infrastructure and are expected to reach $51 billion in 2024. The main goal of these investments is to improveAIcapabilitiesacrossa rangeof operationssuchascloudservicesandsupplychainmanagement. –AP news
4. Optimization of the Supply Chain: AIapplicationshavesignificantlyreducedcosts andincreasedefficiency in supply chain operations. Amazon saved $1.66 billion in transportation and logistics expenses in 2020 because of ML and AI initiatives. These efforts also improved supply chain speed and decreased delivery times. -Sifted
5. Growth of Cloud Services: Because there is a greater need for AI and ML services, Amazon Web Services (AWS)hasgrownsignificantly.AWSsawa13%increaseinrevenueinthefirstquarterof2024reaching$143 billionasmorecompanieslookedforcloudsolutionspoweredbyAI.- Data Centre Knowledge
In conclusion, Amazon’s dynamic growth can be attributed to its strategic use of AI, which has improved customer engagement, evolved workforce, increased capital expenditures, optimized supply chain operations, and expanded cloud services.
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
a. Revenue (in billion dollars)
b. Gross Profit (in billion dollars)
c. Marketing Expenditure (in
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
d. Annual Fulfilment Expenses (in billion dollars)
e. Amazon Prime Consolidated Sales (in billion dollars)
f. Number of Employees
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
6. Calculation and Analysis
a. Revenue of Amazon(in billion dollars)
Ingraph,x-axisisyearsfrom2014to2023andy-axisisrevenueearnedbyAmazon(inbilliondollars)
Let’sconsider2014as1,2015as2……..2023as10.
After manually drawing the graph on Excel, we find biquadratic equation covers maximum number of plots consideringy=Ax2+Bx+C.
Revenue (in billion dollars)
Formula: y=3.33*x2+21.17*x+51.88
Where‘ y ’representsrevenueofAmazon(inbilliondollars),and ‘ x ’representsyear1,2,3……(1represents2014, 2represents2015andsoon)
b. Gross Profit of Amazon (in billion dollars)
Ingraph,x-axisisyearsfrom2014to2023andy-axisisgrossprofitearnedbyAmazon(inbilliondollars).
Let’sconsider2014as1,2015as2……..2023as10.
After manually drawing the graph on Excel, we find biquadratic equation covers maximum number of plots consideringy=Ax2+Bx+C.
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
GrossProfit(inbilliondollars)
Formula: y=2.06*x2+4.99*x+17.32
Where ‘ y’ represents gross profit of Amazon (in billion dollars), and ‘ x ’ represents year 1, 2,3……(1 represents 2014,2represents2015andsoon.)
c. Marketing Expenditure of Amazon (in billion dollars)
Ingraph,x-axisisyearsfrom2014to2023andy-axisismarketingexpenditureofAmazon(inbilliondollars)
Let’sconsider2014as1,2015as2……..2023as10.
After manually drawing the graph on Excel, we find biquadratic equation covers maximum number of plots consideringy=Ax2+Bx+C.
MarketingExpenditure(inbilliondollars)
Formula: y=0.198*x2+2.69*x-0.66
Where‘ y ’representsmarketingexpenditure(inbilliondollars),and‘ x ’represents1,2,3……(1represents2014,2 represents2015andsoon.)
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
d. Annual Fulfilment Expenses of Amazon (in billion dollars)
In graph, x-axis is years from 2014 to 2023 and y-axis is annual fulfilment expenditure by Amazon (in billion dollars).
Let’sconsider2014as1,2015as2……..2023as10.
After manually drawing the graph on Excel, we find biquadratic equation covers maximum number of plots consideringy=Ax2+Bx+C.
AnnualFulfilmentExpenses(inbilliondollars)
Formula: y=0.616*x2+2.97*x+4.93
Where‘ y ’representsannualfulfilmentexpenses(inbilliondollars),and‘ x ’representsyear1,2,3……(1represents 2014,2represents2015andsoon.)
e. Amazon Prime Consolidated Sales (in billion dollars)
Ingraph,x-axisisyearsfrom2014to2023andy-axisisAmazonPrimeConsolidatedSales(inbilliondollars)
Let’sconsider2014as1,2015as2……..2023as10.
After manually drawing the graph on Excel, we find biquadratic equation covers maximum number of plots consideringy=Ax3+Bx2+Cx+D
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
AmazonPrimeConsolidatedSales(inbillion dollars)
Formula: y= -0.047*x3+0.84*x2 -2.371*x+2.195
Where ‘ y ’ represents amazon prime consolidated sales (in billion dollars), and ‘ x ’ represents year 1, 2,3……(1 represents2014,2represents2015andsoon.)
f. Number of Employees of Amazon (in thousands)
Ingraph,x-axisisyearsfrom2014to2023andy-axisisnumberofemployeesofAmazon(inthousands)
Let’sconsider2014as1,2015as2……..2023as10. After manually drawing the graph on Excel, we find biquadratic equation covers maximum number of plots consideringy=Ax4+Bx3+Cx2+D. Formula: y=3.31*x2
NumberofEmployees(inthousands)
Where‘ y’representsnumberofemployees(inthousands),and‘ x ’representsyear1,2,3……(1represents2014,2 represents2015andsoon.)
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
7. References
1. Amazon Official Website
Amazon's official site provides insights into its AI capabilities, products, and services related to marketingandbusinesssolutions.
Link:https://www.amazon.com
2. Amazon Web Services (AWS)
AWS offers detailed information on how Amazon utilizes ML, AI, and Big Data analytics to enhance marketing.
Link:https://aws.amazon.com
3. The Guardian - Amazon Sales Report (2024)
ProvidesadetailedreportonAmazon'ssales,revenue,andmarketingperformance,especiallyfocusing ontheimpactofAItechnologies.
Link:https://www.theguardian.com/technology/2024/apr/30/amazon-sales-report-ai
4. Sifted - How Amazon Uses AI in Supply Chain
Describes how Amazon integrates AI into its supply chain and marketing strategies, highlighting the efficiencygainsandcost-savingaspects.
Link: https://sifted.com/resources/how-amazon-is-using-ai-to-become-the-fastest-supply-chain-inthe-world
5. Harvard Business Review - AI for the Real World
A critical look at AI applications in businesses, including Amazon’s use of AI in marketing and customerexperience.
Link:https://hbr.org/2018/01/artificial-intelligence-for-the-real-world
6. McKinsey & Company - AI in Marketing Report
Insights into how AI is revolutionizing marketing, with examples from Amazon's own marketing strategies.
Link: https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/ai-inmarketing
7. TechCrunch - AI and Machine Learning at Amazon
A detailed look at how Amazon leverages AI for various applications, including marketing and customerengagement.
Link:https://techcrunch.com
8. Forbes - The Business of AI in Amazon's Marketing
Discusses how Amazon integrates AI into its marketing strategies, from personalization to data analysis.
Link: https://www.forbes.com/sites/bernardmarr/2021/09/21/how-amazon-uses-ai-and-machinelearning-in-its-business/
International Research Journal of Engineering and Technology (IRJET) e-ISSN:2395-0056
Volume: 12 Issue: 02 | Feb 2025 www.irjet.net p-ISSN:2395-0072
9. Statista - Amazon’s Annual Revenue and AI Investments
Provides data and statistics on Amazon’s revenue and investments in AI, including their impact on marketingandbusinessoperations.
Link:https://www.statista.com/statistics/273963/quarterly-revenue-of-amazoncom/
10. Reuters - Amazon’s Digital Marketing Evolution
OffersdataonAmazon’sshifttowardsdigitalmarketingandtheroleofAIinthattransition.
Link:https://www.reuters.com/article/us-amazon-ads-strategy-idUSKBN2A10ZN
8. Biographies
Pranav Suri
Credentials:
- StudentofGrade12inCityMontessoriSchool,KanpurRoadBranch,Lucknow
- ShortlistedatDistrictLevel,PradhanMantriRashtriyaBalPuraskarAward
- Commendation Letter from Government of India Defense Minister, Shri Rajnath Singh, for excellent academic performanceinClass10AllIndiaICSE(IndianCertificateofSecondaryEducation)BoardExams98.2%
- Co-FounderandPresidentoftheComputerClubatschool
- DistinctioninAMC12AmericanMathematicsCompetitionorganizedbytheMathematicalAssociationofAmerica, NationalRank44inIndia,participatedinAmericanInvitationalMathematicsExamination(AIME)
- APScholarwithDistinctionAwardfromCollegeBoard
- AspiringformajorinComputerScience
Under the guidance of:
Dr. Mamta Jain
- M.Sc(Mathematics)(DoubleGoldMedalist)
- M.Phil(ComputerApplications)withHonorsfromtheUniversityofRoorkee(nowIITRoorkee)
- Ph.D.(Mathematics)-Variouspaperspublishedininternationaljournals
- FormerLeadAuditorISO9001,ISO-22000
- SchoolAccreditationExaminerbyQCI
- 26yearsofteachingexperience
Er. Raunaq Jain
- B.EMechanicalEngineeringfromThaparInstituteofEngineeringandTechnology
- DistrictPhysicsTopper
- Contentwriterandgraphicdesigner
- MechanicalMentorfromsession2019-2020
- UpcomingDataAnalystatDeloitte