Big data is being used to drive business on many fronts — from in-store sales to customer personalization strategies. One current study set out to determine whether the advent of big data collection also can reveal more about online buying and price points for retailers than in the past.
Specifically, Benjamin Shiller, an Assistant Professor of Economics at Brandeis University, is studying “First Degree Price Discrimination Using Big Data”–the effects of discount offers and how much they can raise profits for a product and a company.
Shiller described his research at a recent lunch seminar sponsored by MIT Center for Digital Business’ Initiative on the Digital Economy (IDE). His group looked at the online sales of Netflix and determined that tailored customer discounts do provide incentives to sales and can be customized to specific buyers based on detailed web behavior.
Shiller explained that:
Increasingly, the appeal of tailored pricing will be critical in online competition and in understanding the motivation of online buyers. Big data will have a big role to play in this new marketplace.
The full presentation and slides can be viewed here.