A comment by Thomas Dinsmore at DBMS2.com
Re “beer and diapers” — I first heard this at a 1996 Data Mining conference in San Francisco, where a Teradata presenter used the story to tout the capabilities of Teradata.
A year or so later, Forbes ran a piece quoting the head of merchandising for Wal-Mart saying that even if the finding were true he wouldn’t know what to do with it.
That’s an important point. Suppose that it’s true that shoppers tend to purchase beer and diapers on Friday nights. Does this mean retailers should:
(1) Place beer and diapers next to one another in the store, for shopper convenience;
(2) Place beer and diapers far apart in the store, to maximize time in store;
(3) Issue a coupon for beer when purchased with diapers;
(4) Don’t issue a coupon, since shoppers buy beer and diapers anyway.
There is no way to answer the question without a follow-up test and learn. In the absence of an experimental design, observed associations have little or no value for decision-making.