Whether you’re a marketer or a shopper, understanding trends is critical to making wise purchase decisions. Trend analysis is the process of identifying and analyzing patterns in data over a defined period of time. In marketing, trends can be used to identify potential new customers, predict consumer behavior and determine the success or failure of a product or service. In business, spotting the next big trend before it becomes a fad can give you a competitive advantage. But spotting the difference between a real trend and a fad takes skill. Spotting a trend requires a clear head and keen eyes, and it can also require the use of a few different tools.
The word “trend” is derived from the verb “to trend,” which means to develop or veer toward something. It can be applied to virtually anything, from fashion and entertainment to weather patterns and the movement of the planets. A trend can be an enduring style or it could be a fad that fades out quickly.
Many businesses are eager to jump on the bandwagon of a popular trend, hoping that they can ride the wave for profits. But if they’re not careful, they can end up chasing the latest fad instead of riding it to long-term profitability. Spotting a true trend can be difficult, but there are several ways to make the process easier and more accurate.
One way is to gather competitive intelligence by tracking competitors’ marketing messages, pricing and hiring trends. You can manually gather this information or use a tool like Klue or Crayon to automatically collect it for you. Another way is to gather customer interviews and qualitative data, which can help you understand why a specific trend is gaining popularity. Qualitative data can include facial expressions, tone of voice and other non-verbal cues.
A third method is to analyze historical data from your competitors’ websites or online stores. You can then look for correlations between the product or service being offered and the data you’ve collected. If you find a link between the two, it’s likely that your competitor is riding a trend.
The final method is to identify trends in your own business data, such as sales or market research results. You can then use this information to predict future performance or make strategic planning decisions for your company. This type of analysis can be difficult because it’s based on past trends and cannot account for unexpected events or changes in market conditions that may disrupt the overall trend.
The trend in the financial markets can be determined by the overall investor sentiment in the market. For example, if traders are collectively fearful, it can lead to negative market pressure and a downtrend. Conversely, if traders are confident or even greedy, it can lead to positive market pressure and an uptrend. These trends can be difficult to discern because the emotions of individual traders can have a strong impact on price action.