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Facebook's attempt to one-up Amazon — and restore faith in its stock

Category: Finance,Retail

Predictive shipping would be a big gamble. Facebook is betting that you won't be upset when your new shampoo arrives at your doorstep, whether or not you actually purchased it. Facebook would be entering a new space in the shopping universe, where AI and algorithms take the decision-making out of a customer's hands. Facebook hopes you'll return it, pay for it or take it as a free gift and return for future business. If the shampoo is offered as a free promotional gift, it could build tremendous goodwill. Shopping would become less a deliberate activity and more an organic component of the Facebook daily life experience. Facebook sales increase and margins improve based upon previous searches, purchases, preferences, wishlists and habits.

Facebook would presumably have some serious competition. Amazon was first to patent a service it called "anticipatory shipping" earlier this decade, a concept that would allow the e-commerce giant to deliver more quickly: Analysis of its massive data store would result in an item being sent to a warehouse or truck closer to the destination of the predicted purchaser, but not actually ship to the consumer before a purchase is made.

Facebook, in contrast, has been quiet on the topic but maintains a significant lead in the data analytics required to perform predictive shipping, even if it is clearly behind Amazon in logistics. Marius Schober, founder of AR and advertising tech company, believes that by implementing AI assistants, Facebook will be better able to ultrapersonalize and predict needs and wants. "This ultra-personalization will result in even greater conversion [sales and margin] rates," he wrote in a blog post. "This superior Facebook competency is on a faster track to save consumers the effort of thinking."

If after reading this you want to preemptively opt out of Facebook data broker agreements, good luck.

After reading Jeffrey Chester's article on Facebook's use of data brokers, reporter Julia Angwin attempted to opt out from as many Facebook data brokers as she could. She stated that "of the 212 data brokers that I managed to identify, less than half — 92 — accepted opt outs — 65 of them required me to submit a form of identification such as a driver's license."

In the end Julia said, "She could not remove her data from the majority of providers."

— By Keith Wright, Villanova University instructor of accounting and information systems

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