Amazon has adapted the product-related search system for its digital store to better show its products in the search results. That is what the WSJ states based on sources. It would be a move to boost the more profitable products.
According to several people who contributed to the Amazon project, the company optimized the algorithm that ranks the search results for a product at the end of last year. That means, according to the unnamed sources, that the search system not only shows the most relevant products, but also gives an incentive to products that bring Amazon more profit, writes the WSJ.
The change, which Amazon has not publicized, is said to have been made after a years-long battle between senior executives at Amazon’s Seattle retail division and the company’s search team, called A9. These people from A9 would have been against the adjustment, but have lost that battle according to the sources.
In order for the algorithm to understand what is most profitable for Amazon, the engineers had to enter data about the contribution margin of all products sold. This would have been a very labor intensive process requiring delivery information from the Amazon warehouses to be able to calculate this margin.
One of the sources indicated that Amazon’s lawyers blocked a previous proposal to factor profitability directly into the algorithm, because it would bring about a change that would be problematic in the eyes of regulators. In doing so, they referred to a fine that the European Commission imposed on Alphabet in 2017, because the Google Shopping algorithm favored its own price comparator in the search results.
In the view of Amazon’s search team, attempting to factor profitability directly or indirectly was a violation of Amazon’s principle of doing what’s best for the customer. According to the sources, the modification of the algorithm was therefore not a popular project.
An Amazon spokesperson said there were no changes to the criteria used to rank search results that would have included profitability. However, the company declined to comment on why the A9 engineers described highlighting profitability as a significant algorithm modification. Amazon also did not want to explain how the algorithm works and the internal discussions about it.
The people who worked on the project wouldn’t know if, and if so, to what extent, the adjustment helped sell Amazon’s own products or other third-party products that may have made Amazon more profitable. It’s also unclear whether these changes have been made to all regional versions of the Amazon store.