We have heard so much lately about the failure of Big Data to predict the outcome of the presidential election, but we may not realize that this technology is used by large retailers to make decisions all the time.  Described by one provider as “the ocean of information we swim in every day,” big data evaluates information gleaned from computers, mobile devices and machine sensors to help businesses make decisions. Another definition says that the technology uses large data sets to evaluate patterns, trends, and associations, especially relating to human behavior and interactions

The opposite of big data is of course small data, which is the subject of a recent book by Buyology author Martin Lindstrom. In Small Data: The Tiny Clues that Uncover Huge Trends, Lindstrom shows that observing behavior is probably just as important as mining computer data in learning about what customers want.  In his book he talks about his international travels on behalf of major clients.  On these trips he spends hours investigating the homes and habits of potential customers, looking in their kitchens, bathrooms and even bedrooms for clues about their likes and dislikes.   You can enjoy Lindstrom’s insights (and Danish accent) in his TEDxHarvardCollegeSalon Talk.

Small data is the friends of small retail.  We have the ability to study the behaviors of our customers every day, and to apply what we have learned when doing our buying.  I have observed, for example, that shoppers will spend an average of 6 minutes considering the various colors of polypropylene cutting boards that we offer, and then almost invariably select one that matches the color they are wearing. There is no way that big data could pick up on this, but as independent retailers we can garner useful information like this every day.  One of the conclusions in Small Data, in fact, is that executives of big box stores should spend more time in the sales floor interacting with consumers.

Martin Lindstrom’s conclusion from the small data he compiles are sometimes odd and even off the mark, but those of us who have daily contact with customers are able to test our hypotheses by seeing whether our ideas lead to increased sales and customer satisfaction.  

Happy Retailing,

Carol “Orange” Schroeder 

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