It’s the season of giving, so it’s time to search the vast expanse of online stores to find the perfect gifts! But browser beware: When you visit a website, you leave behind information about yourself. Those websites you visit may use this data to track your online activity and preferences, which can affect how you experience any given website across the internet.
Here are a few ways technology impacts your holiday online shopping.
Letters to Santa (…Or Searches on Your Browser)
Many businesses try to increase their profit by optimizing their user experience, whether their customers shop online or at a brick-and-mortar. 
But online, instead of simply asking the customers how they found their shopping experience, companies can be a bit sneakier.
When you use a company’s website, you leave behind data like what you looked at and clicked on, how long you spent on a page, or if you put something in your shopping cart but didn’t purchase it. Online businesses use this data to calibrate their services to the needs of their current and future customers. Customer data collection has been around since the advent of the HTTP cookie, and recent innovations in machine learning and artificial intelligence have revolutionized the quantity and quality of the data collected and analyzed to improve the user experience like never before.
Christmas Cookies
Have you ever Googled something you intended to buy, then decided not to buy it, only for the product’s website to spam your email for months after your initial search? Or have you been to a website and seen an ad for that completely unrelated product you searched a few weeks ago? This intrusive tendency of ads is the work of HTTP cookies (also known as internet cookies, or simply cookies).
Cookies are the little packets of information saved to the user’s device by the web browser, and they are used to track your activity across the internet. They help businesses track user preferences, deliver targeted ads to the user, and customize the browsing experience (e.g. suggesting certain products above others given the user’s established preference).
Most websites have two types of cookies: first-party and third-party.
First-party cookies
- Are set by the visited site
- Track your activity across the website, such as your scroll time, mouse clicks, and visited pages
- Usually expire after your browsing session
Third-party cookies
- Are controlled by advertisers and site publishers that use the collected data to construct targeted ads (think Google Ads)
- Are more invasive and persistent than first-party cookies
- “Advertising cookies” use tracked data build a profile of the individual user’s interests to provide them with relevant advertisements on other websites
All of this goes back to the keystone fact that mining user data leads to greater profit and an improved, more personalized user experience.
Santa’s Little Helper: Artificial Intelligence
There are billions of users across the internet generating stupefyingly large amounts of data every second. How can that goldmine of raw user data be turned into valuable insight?
It may not come as a surprise that businesses have already been integrating artificial intelligence into their data processing. Using machine learning, businesses are able to process huge amounts of data to identify patterns in the users’ decisions, decide which ads are better suited to which users, shift prices to meet the predicted market trends, predict user behavior based on the behavior of previous users, and provide recommendations based on browsing habits, as well as anticipate user needs. (If someone buys a tennis racket, they may benefit from a suggestion to buy replacement strings.)
In short, businesses use AI to maximize efficiency and profitability while also creating the best possible experience for the users based on their browsing activity and preferences.
Making a List and Checking it Twice
While it may seem that these businesses are infringing upon the privacy rights of their customers, there are many regulations in place to ensure that the customers’ data is private and protected while being utilized to optimize the user experience. For instance, in 2018, the European Union implemented the General Data Protection Regulation (GDPR), which imposes restrictions on any organization that aims to provide service or collect data related to the people of the European Union. Many other countries and US states have similar policies on data privacy. Ultimately, this allows for the collection of data on behalf of the user, which leads to many benefits, such as better search engine recommendations and ads better tailored to your preferences. So, this holiday season, pay attention to your ads because the algorithm might help you find that perfect gift!
Happy Holidays!
Love,
The Algorithm
— Jenna Woods