The term trend describes a general direction something is changing, developing, or veering toward. It can also be used to describe a fashion or fad.
It’s easy to see trends when they are on the beach, but predicting them before they reach that point takes skill and practice. It’s a bit like trying to identify a tidal wave while it is still on the horizon. If you can spot a trend before it’s visible, you have an advantage over your competition.
Trend analysis is an important part of business intelligence, and a variety of tools are available to help you find them. These include competitive intelligence data, market research reports, customer interview surveys, and more. The key to spotting a true trend is to use multiple data sources to get the most complete picture possible.
The first step in identifying a trend is to collect data on an ongoing basis. This can be done manually by tracking competitors’ marketing messages, pricing, or product reviews and ratings, or using a tool to do this automatically for you. Trend analysis also includes collecting qualitative data, such as customer interviews or feedback.
Generally, the longer a trend lasts, the more significant it is. Ideally, you’ll want to track a trend for at least a year before making a business decision based on it. This gives the trend time to mature and develop, making it more likely to be sustained.
There are several types of trends that can be tracked, including economic, social, or technological. Economic trends, such as inflation or the cost of living, give businesses an idea of consumer buying power and their willingness to spend. Social trends, such as gender or age, can provide insight into the preferences of specific demographic groups that can inform communication and product development.
A key component of trend analysis is interpreting the data and finding meaning in it. The best way to do this is to compare the data against other similar data sets. You can do this by using a chart or graph, which will help you spot patterns and identify correlations.
In addition to comparing data sets, you can also use statistical models to evaluate the significance of a trend. These include the Mann-Kendall and Poisson trend scores, which evaluate how unusual a particular point is in relation to previous points.
Another way to detect a trend is to look at the overall shape of price action. A trend can be identified by drawing lines, known as trendlines, that connect price points with higher highs and lower lows for an upward trend or lower highs and higher highs for a downward trend. This can be done manually by connecting the points or with a software tool such as Microsoft Excel. Typically, the more significant the change in price is, the more significant the trend will be. Trends can also be influenced by popular culture, such as a film release or a political movement. For example, when the Lord of the Rings film came out designers started to produce long, flowing dresses like Galadriel’s, and Black Swan influenced a season of ballet-inspired fashion.
