Black Friday in the age of data: how companies make money beyond the sale

When we think of Black Friday we picture long lines, crowded stores and people running to grab the best deals. But today Black Friday has morphed into a multi-day online event where deals pop up for weeks. During Black Friday the average consumer unknowingly shares over 300 data points with tech companies – from browsing habits to shopping preferences. While we, the consumers, enjoy the thrill of the hunt for deals, there’s another game being played in the background – one that’s even more profitable for tech companies than selling products. It’s the game of data collection.

The secret side of Black Friday: data collection

The appeal of Black Friday has always been about getting that one deal. But while you’re busy shopping tech companies are collecting a treasure trove of data. This isn’t just about what you buy; it’s about your habits, preferences and behaviors to a degree that’s almost creepy. Black Friday data collection is a highly orchestrated event that provides valuable consumer insights.

The data collected goes way beyond your purchase history. It includes browsing patterns, clicks, abandoned carts, time spent on certain pages and even how you respond to pop-up offers or targeted ads. This information feeds into a vast ecosystem where cloud storage and processing is key. The data doesn’t just sit there – it’s analyzed, categorized and used to predict your next move. And that’s where the real value is for tech companies.

Companies collect and store consumer data to refine their marketing and get an edge. The insights from this data tell them how to push the right buttons – when to offer a limited-time deal or how to word an email to get the most clicks. So, the entire shopping experience becomes a carefully choreographed dance to get you to the checkout page. And it’s all powered by the digital infrastructure of cloud and AI-driven personalization.

How cloud storage fuels the data goldmine

Cloud storage is at the center of this data machine. It allows companies to store vast amounts of consumer data and, more importantly, to access and process it in real time. This is especially important during shopping events like Black Friday when data comes in fast and needs to be processed even faster.

Cloud-based systems can scale up to handle the data influx during peak times so no piece of data is lost. Companies can then use this data to create a more personalized shopping experience – think customized email offers, personalized product recommendations, or even targeted ads that follow you around the internet. It’s all powered by cloud-backed AI, which processes the data to predict what you’ll buy next and at what price point you’ll make the purchase.

To put this into context, there are millions of transactions happening every minute on Black Friday. Each of those transactions generates data points – what time the purchase was made, what items were viewed but not bought, and how the customer navigated the website. All that data needs to be processed in real-time so companies can adjust on the fly and deliver flash sales or recommendations based on current trends. Without cloud technology, handling that volume of data would be impossible. Cloud storage data collection enables real-time insights to power more effective personalized offers.

AI in personalization and targeted marketing

AI is the engine that turns data into insights. It uses machine learning algorithms to understand your habits and behaviors so companies can create super-targeted ads and personalized shopping experiences. When you see an ad for a product you just looked at, or get a discount code for an item you abandoned in your cart, that’s AI at work. AI personalization is a big part of how tech companies make money on Black Friday.

AI systems are designed to learn from every interaction. The more data they collect, the better they get at predicting what you want and need. During Black Friday, the stakes are even higher. With so many retailers vying for your attention, companies need to use every tool in their arsenal to make their ads the most compelling. That means using AI to analyze which deals will appeal to you based on your past behavior, current browsing habits, and even trends among people with similar interests.

For example, if you frequently browse fitness equipment, AI can predict that a limited-time discount on a new treadmill will get your attention. The algorithms work 24/7 to determine what messages will drive conversions, so every banner ad, pop-up, and email is designed to push you further down the sales funnel. This personalization is more about creating a shopping experience that feels almost impossible to resist than your convenience.

But while this personalization makes shopping more convenient, it raises a big question: Is the convenience worth the trade-off in privacy?

Is the discount worth the trade-off?

For many consumers, personalized ads and targeted offers seem like a fair trade for discounts and convenience. After all, if you’re going to be seeing ads anyway, why not see ones that are relevant? But there’s a darker side to this equation. The more data companies collect, the more they know about you – not just as a consumer but as a person. Data privacy concerns during Black Friday shopping events are real and often overlooked.

Data collection isn’t limited to online activity. It’s on mobile apps, smart devices, and even in-store Wi-Fi networks that can track your movement and behavior while you shop. This level of surveillance is often done without your explicit consent, and the data can be shared or sold to third parties. While the short-term benefit may be a lower price on a new gadget, the long-term cost could be a loss of privacy and autonomy.

Imagine walking into a store and being greeted by a sales associate who knows your name, what you’ve bought in the past, and what you’ll be interested in today. That’s essentially what companies are doing online – they create detailed profiles that allow them to know you almost as well as a close friend. The more they know, the easier it is to manipulate your buying decisions. It’s this very knowledge that turns seemingly harmless data points into powerful persuasion tools.

And the data companies collect isn’t always secure. High-profile data breaches have exposed the personal information of millions of consumers. When your data is breached, it’s not just about losing access to your email or bank account – it’s about having your personal preferences, habits, and even your identity exploited by cybercriminals. Black Friday data breaches are unfortunately common, and they highlight the cost of trading privacy for convenience.

The implications go even further. Data breaches can also lead to loss of trust in companies, damaging reputations and consumer confidence. Once your personal information is out there it’s almost impossible to get control back over where that data ends up. This creates an environment where convenience comes at a huge cost – not just to your wallet but to your overall sense of security.

Cloud storage and the environment

Beyond privacy, there’s another aspect of cloud-backed data processing that’s often overlooked: the environmental impact. Tech companies use massive data centers to store and process information, which consume huge amounts of electricity and water to keep the servers cool. The carbon footprint of data storage is big, and as companies collect more data, the need for more data centers grows. Environmental concerns about cloud storage are becoming more pressing.

Data centers use 2% of the world’s electricity, and that number is growing annually. Big Tech likes to tout its efforts to switch to renewable energy and offset its carbon footprint. Still, the reality is that the demand for cloud storage is growing faster than the rate of sustainability improvements. The energy used for data processing during events like Black Friday, when data flows are highest, adds to the strain on the environment. So, while cloud-enabled personalization may seem harmless, there’s a hidden cost to the planet.

Think about the impact of these massive data centers. They require huge amounts of power and vast amounts of water for cooling, which can strain local resources in water-scarce areas. Tech companies like to ignore the environmental cost of storing and processing data and focus on the convenience and efficiency their technology brings to consumers.

The challenge is to balance the demand for data-driven personalization with sustainable practices. While cloud storage has enabled us to deliver personalized shopping experiences at scale, the hidden environmental cost is a cost we all pay. It’s an important part of the digital economy we need to address if we’re going to have a sustainable future.

Who benefits: the tech giants or the consumers?

At first glance, it may seem like consumers are getting a great deal during Black Friday, but the biggest winners are often the tech companies that facilitate these sales. Companies like Amazon, Google, and Facebook don’t just make money from selling products or ad space – they make money from the data that drives every click, view, and purchase.

With cloud-based AI, they can continually refine their algorithms, making their ads more effective and their data even more valuable. This creates a data monopoly where a few large companies control most of the consumer data and have an advantage over smaller competitors who don’t have access to the same cloud resources and data analytics capabilities.

They use their data advantage to dominate markets, making it harder for smaller businesses to compete. The more data they collect, the better they get at predicting consumer behavior, which in turn attracts more ad dollars and cements their market position. This creates a feedback loop where data breeds profit profit breeds more data collection, and consumers have less choice and less control over their data. Tech giants profit from Black Friday not just through sales but through the massive data collection that comes with these events.

What can you do?

It’s not all doom and gloom. Consumers have options. Here are a few ways to take back control of your data this Black Friday:

1. Limit data sharing: Be careful which apps and services you connect with your social media accounts. Always check privacy settings and limit data sharing where possible.
2. Use privacy tools: Browser extensions and tools like ad blockers or privacy-focused search engines can help reduce the amount of data companies collect about you.
3. Shop incognito or guest checkout: If you’re shopping online use incognito mode or guest checkout to prevent companies from tracking your purchase history.
4. Opt out of data tracking: Many companies offer options to opt out of data tracking and targeted advertising. It won’t stop data collection but will reduce the amount of personal data used for marketing.
5. Support businesses that value privacy: Some companies take a privacy-first approach to data collection. Support businesses that are transparent about their data practices and it will encourage better behaviour across the industry.
6. Educate yourself: The more you know about how your data is collected and used the better you can make informed decisions. There are many online resources and organizations that educate consumers about data privacy and security.

The true cost of a good deal

As Black Friday approaches, it’s worth considering the hidden costs behind those shiny discounts. While the temptation to save a few bucks is strong, the trade-off for your data may be more than you bargained for. In the age of data, tech companies aren’t just profiting from what you buy – they’re profiting from who you are. The true cost of a good deal on Black Friday might not be on the price tag but in the consumer data privacy that’s often sacrificed.

The convenience of personalized ads and the thrill of scoring a good deal can be hard to resist, but being aware of the trade-offs allows you to make decisions that align with your values. Is that discount worth your privacy? As consumers, we have the power to demand better data practices from companies, support those who respect our privacy, and shape the future of data collection and use. The real deal on Black Friday might just be the one that doesn’t cost you your personal information.

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