back to thedrum.com
Trend tracking and forecasting have become key sources of market insight for product-led growth. Companies like WGSN track over 10,000 brands to classify product data and assess the strength of trends over time. Understanding the market’s evolving needs is crucial for developing the right products for the right audience at the right time. Basic trend forecasting reveals signals of change which can be used to inform product, brand and marketing strategies that are rooted in science.
A trend, by definition, is something that develops and changes direction over a time period. Trends are classified in three ways: mega, macro and micro.
A megatrend is one that builds over time and has a long lifeline. It has a multitude of impacts across society and industries, e.g. climate change, major technological advancements, and diversity. Macro trends relate to mega trends but include changing consumer behaviour. Some examples include machine learning and AI (artificial intelligence). Macro trends typically last between 5-10 years. Microtrends, however, are just the tip of this iceberg. They typically last between three to five years. Think remote working and wearable technology like Fitbit.
Trends can be tracked in different directions - we see uptrends, downtrends and horizontal trends. Typically the most searched trends are the upwards trends that are referred to as emerging trends. The positive direction of emerging trends is considered an appeal in the popularity of tracking them. Downwards trends are those that declined after a period of either positive or stagnant direction. The short-lived nature of fads is seen as being one season long. But to analyse and differentiate them, we need data.
In the technology industry, trend analysis is carried out for a number of reasons. Trends inform product and marketing teams about the market, present new opportunities for innovation, establish brand credibility and create new market segments. Latecomers to the newest trends often pay the price. Some of these latecomer brands have an innate fear of adopting emerging trends, the fear of the trend being a fad. Trends influence the way people behave where a fad is “a style, activity, or interest” that is extremely popular for a short amount of time but de-escalates quickly after its small burst of interest. The ability to identify a trend from a fad lies within the core ingredients of a trend.
Trends at any level are born from the interaction between 3 elements: society’s basic needs, drivers of change and innovation. Basic needs describe fundamental requirements that society possesses, such as safety, food and status.
Drivers of change are a combination of shifts and triggers. Global shifts can cause mega and macrotrends to occur. For example, Digitalization was a global shift that developed into a megatrend of robots in industrial production. Shifts are more long-term than triggers. A trigger is an immediate change like the emergence of a specific technology which can direct a trend. A trigger could be VR technology which created the micro-trend of pop-up VR experiences in airports.
Innovation is the final core element of a trend. Products, services and experiences are all innovated to build on customer expectations by resolving the outstanding tension that results from gaps in the market.
Despite understanding these elements, what many tend to forget is the overlap between the individual elements that can help spot the vital signals necessary for trend forecasting. This hinges on recognising the role of human behaviour, and in particular- how receptive humans are to change.
Behavioural science provides a framework for understanding how context and cues change peoples’ behaviour. According to IBM's consumer study 2022, the largest segment of consumers (44%) are purpose-driven and chose products based on how well they are aligned with their values. However, as consumers, we have different roles - from being a user to a shopper, student, employee or boss. The role we adopt at a given time interacts with the environment. When you are an employee finishing a day’s work and grocery shopping whilst hungry, you are likely to buy more items than you would when you are not hungry and tired.
Research has shown that 97% of people express interest in being more sustainable, but only 13% are changing their behaviour (Kantar Sustainability Sector Index 2022). This point alone illustrates that we need metrics/data points to monitor behaviours and behavioural science to extrapolate the metric and make sense of it. It is the interpretation of behaviour that reveals why a trend might be accelerating here. All of which are vital insights for product development and marketing teams.
The intuitive method of trend forecasting is analysing a trend across user groups based on behavioural patterns. The temporal method of forecasting relies on the analysis of trends within/across user groups over a period of time. This method is beneficial for predicting future trends based on past observations. It can identify the relationships between user groups, particularly with varying generations.
Nevertheless, human beings have a number of cognitive traits that influence consumer decisions. Influence trends tend to ‘leak’ out in the digital world. For example, taking form in search habits or online commentary. Trends alone are not enough. We need to know the hive mind behind the trend in order to inform better commercial decisions.
At VERJ, we work to understand the driving behavioural forces underlying particular trends. We then combine tools such as traditional social listening with review data analysis or computational discourse analysis from forums. With a set goal in mind, we help clients better understand the trends important to them and their customers. By using these methods (and more), we’re able to spot signs even before trends go viral. Knowing why certain products affect people and what behaviours they’re triggering can be the missing ingredient for creating better products and improving strategies. To this end, recognising and understanding people’s reactions to new market entries through an array of digital 'signals’ is often a vital advantage in an increasingly competitive market.
Written by Tanya Sengupta, Insights Executive at VERJ | A LAB Agency
