Amazon and Apple are massively successful retailers, the envy of digital and brick-and-mortar businesses alike. Currently, the two tech retailers enjoy a place among the biggest, most successful companies in the world. But they have a blind spot. The premises on which they’ve built their market advantage are now no longer the most important things in digital. They’re missing a data asset that would allow them to understand their customers better: the interest graph.
What is the interest graph?
Not to be confused with the social graph, which describes who you know, the interest graph describes what you like. On Facebook, the difference between the social graph and the interest graph is easily understood as the difference between a friend request and a Like. On Twitter, the social graph and the interest graph is mapped via only one vector — the follow — but in this case, following influencers is what signifies interest. If you follow an influential account like @David_Lynch on Twitter, it’s safe to assume you probably like indie films.
The interest graph attracted significant interest from technologists in 2011. Read Write Web said the interest graph is part of “the future of the social web,” while PayPal founder Max Levchin boldly predicted success for companies that capture the interest graph. So far, all Amazon sees is your shopping cart; companies leveraging the interest graph see your hopes and dreams.
What must Amazon learn from the interest graph?
Amazon could detect purchase intent earlier and identify under-served customers
What Amazon already knows about its customers:
- products purchase data (backward looking)
- wishlist data (sparse)
What Amazon could discover from the interest graph:
- our favorite brands (aspirational)
- new purchases shared by our friends (social proof)
(Amazon attempted in 2010 to expand its recommendations engine with a still-in-beta program that taps into the social graph, but the app’s intelligence is currently limited to Facebook friends’ Likes.)
What must Apple learn from the interest graph?
Apple could recommend songs and apps with greater accuracy
What Apple already knows about its customers:
- songs and apps purchased (backward-looking)
- location (and possibly what sites you visit, though it would cause a privacy uproar)
What Apple could discover from the interest graph:
- musicians who we follow but haven’t purchased yet (forward-looking)
- our friends’ apps
Ramifications of the interest graph for e-commerce
In a surprise upset, Apple and Amazon, with their massive product catalogs, cash hoards, and fulfillment channels, could potentially lap Twitter and Facebook in the race to monetize social. The e-commerce giants could create a much richer portrait of their customers – and better predict their behavior — by leveraging the interest graph. However, if they snooze on the opportunity (or waste valuable time building “abandoned garden” social networks like Ping), someone else could develop interest graph technology for e-tailers first and gain the advantage.
Interest graph technology has powerful ramifications for e-commerce as a whole. Information in the interest graph (which is public, by the way), can clue retailers into the aspirations of their customers — at the brand awareness stage.
