The term trend can refer to a number of things in business: a stock market upturn, a fashion fad, or an office technology upgrade. Each of these trends has its own unique characteristics, but they all share one thing in common: they’re a product of time and can be measured by examining raw data like price, volume, or popularity.
When it comes to identifying trends, the longer the streak of movement is, the more significant the trend is. However, it’s important to note that a trend can be either upward or downward. Uptrends correlate with bullish markets while downtrends correspond to bearish markets.
A key difference between a novelty and a trend is that while a novelties appeal to only a small segment of the population, trends tend to develop broader applications over time. An example is hybrid cars, which went from a novelty (low acceptance) to a trend (widespread adoption) when consumers became more familiar with the technology and began worrying about high gas prices.
Traders often use charts to identify trends and track their progress over time. A chart’s most basic element is a line, called a trendline, which connects two or more price points. A trader can determine an uptrend when the trendline’s curve makes higher highs than lower lows, while a downtrend is defined by a downward slope.
In addition to tracking the direction of an existing trend, businesses can also look for emerging trends by analyzing competitive intelligence and consumer data. This includes gathering quantitative information like pricing, market size, and compound annual growth rate as well as non-quantitative information such as customer interviews or reviews/ratings.
By analyzing this data, companies can see how they’re being perceived in the market by different audiences. This can give them a leg up when it comes to positioning themselves for future success or identifying potential pitfalls. For example, if a company’s products are generating positive sentiment online but are being overshadowed by a competitor with a stronger social presence, it might be wise to invest in additional marketing and advertising initiatives to keep pace with the competition. With Heuritech’s breakthrough deep-learning technology, companies can even predict how a given trend will evolve over time. This provides valuable insight to businesses in a way that would be impossible with only qualitative or quantitative information alone. To learn more about our trend forecasting solutions, request a demo today.
