A Data Explosion Remakes Retailing

MOST people think of the grand challenges in computing as big science projects, like simulating nuclear explosions or protein folding. But with the holiday shopping season just ended, consider another: retail marketing.

Retailing is emerging as a real-world incubator for testing how computer firepower and smart software can be applied to social science - in this case, how variables like household economics and human behavior affect shopping.

To be sure, major retailers like Wal-Mart Stores have long been sifting through in-store sales and demographic information to aim goods at different stores and to tightly manage supplies.

But what is changing, experts say, is the rapid surge in the amount and types of digital data that retailers can now tap, and the improved computing tools to try to make sense of it. The data explosion spans internal sources including point-of-sale and shipment-tracking information, as well as census data and syndicated services. Companies also track online visitors to Web commerce sites, members of social networks like Facebook and browsers using smartphones.

The better tools, they say, are ever cheaper and faster computers and so-called business intelligence or analytic software for finding useful information and patterns in that data.

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