For brands, there’s nothing more valuable than knowing what trends are affecting their industry and driving their customers’ behaviors and preferences. The hard part is identifying these trends before it’s too late. How can brands separate the signal from the noise and pinpoint the consumer trends that really matter?
Reliable trend information should inform R&D, finance, sales, marketing and the board of directors. Growth is the name of the game, and understanding trends is the rosetta stone of building a business and that is poised for continued success.
Fortunately there is a large body of existing research that can serve as a foundation for great trend analysis. Some trends can be inferred from changes in demographics, regional sales data and diligent study of your chain of distribution, etc. There are also new techniques becoming available that provide dramatically improved trend information and that’s very exciting. More on that later.
For now, let’s take a look at several companies in the consumer packaged goods industry to see how they’ve benefitted from analyzing trends. CPG is familiar to everyone. We encounter these brands constantly in the real world, on TV and in online ads. In fact, in marketing circles, Proctor and Gamble (or P&G), is shorthand for an entire system of sales and marketing methods, revered as a template for success in CPG. And when a brand has been around for a hundred years, it’s needless to say, ‘they know what they’re doing’.
To help illustrate this, let’s look at a few real-world examples of how industry and consumer trends can affect a brand’s bottom line. We’ll start with everyone’s favorite topic: toothpaste.
Excellent questions. It seems like the right answer to any one of them could literally turn a brand around. So how do they get the answers? They ask people. It’s that simple. And there are many ways to ask. Focus groups. Surveys. Intercepts. Interviews. Sales analysis. Market research. All the standard research techniques can be brought to bear.
This kind of ‘asking’ research can certainly have value, but it is also flawed. It’s like a trial when a witness says ‘to the best of my recollection’. Hard to really build your case on hearsay.
The Problem With Asking
If you want to know what trends are driving consumer purchase decisions, you should…just ask them, right? This is a great place to start, but there are several reasons that consumer trends are especially difficult to tease out simply by asking.
Credibility. Sometimes ‘asking’ research will come up with what sounds like a clear answer. You may discover that the “3 Ounces Free!” burst on the Colgate package is what people mention when asked about their purchase. It might even be true. It also might be the only thing consumers can remember about buying the Colgate: a far less valuable piece of information. So is this info going to drive you forward to recapturing market share or is it going to send you 1000 miles down a dead-end road, wasting time and money?
The ‘Asking’ Problem. It’s human nature. When asked a direct question one of the first things we take into consideration is who’s asking. It’s well-known, well-studied behavior. It even has a name. The Hawthorne Effect. It simply says that a person’s behavior is greatly affected by the awareness of being observed. Or in this case, questioned. It makes the results of direct questioning research less reliable and vulnerable to error.
The Asking Problem is even more problematic for companies that want to better understand industry and consumer trends. The whole point is that consumers may not even fully understand their own preferences and predilections. Only by looking at consumer conversations in aggregate can brands truly understand the larger forces that are affecting their business.
The Conversation That Turns the Corner
In our example let’s say P&G has been taking advantage of the new research techniques we mentioned earlier. They have continued to monitor the marketplace with traditional methods but they’ve added something new to the mix. They found out what was hurting the business: flavor. Or more accurately, flavors. And features. Peppermint. Peppermint with whiteners. Peppermint with whitener and extra stain fighters. On and on and on. It turns out that by adding so many choices to the line, consumers were confused. They couldn’t experience the differences until after purchase, so they were turning to Colgate which offers ‘mint’ and ‘regular’. There appears to be a trend toward more basic claims, less hype and simpler products. While an individual consumer might not be able to express their growing demand for simpler, more straightforward options, millions of consumer conversations about the topic can give you a good sense of where the market is headed. This is what people mean when they refer to the ‘wisdom of the crowd.’
The Real Trends Come From Real Conversations
If you’re not familiar with social analytics, no worries. It’s an emerging tool in the marketing mix. Here’s how it works. It uses artificial intelligence to access and analyze what is being talked about online. All of it. You ‘teach’ the algorithm what you would like to know and you get results based on billions of tweets, forum posts, product reviews, messages, blogs, news articles and images.
Obvious advantages include a gigantic database and the immediacy of current social activity. And maybe most importantly, with this technology, no one is asking. This is different. People are talking, simply having conversations with their friends and the rest of the planet. Initiated on their own. Spontaneous. Talking about anything on their minds. In their own language. Whenever they want. No Hawthorne Effect. No response bias. Tons of credibility.
The machine learning aspect of industry/trend analysis is so smart you can teach it anything. It allows you to examine the entire breadth of social content to uncover motivational factors behind intent to buy and a granular look at the consumer’s path to purchase.
Trends vs Data
The best way to think about ‘trends’ in this context is to look at the rate of change. Think about food for a minute. If a topic such as ‘gluten-free’ is important and growing in the conversation, you can safely think of it as a trend. If a topic like food coloring remains in the conversation but is steady or decreasing in the number of mentions, its meaning has become status quo in the eyes of consumers and is less likely to bring in new buyers or turn away existing buyers.
In the three examples below you can see that the kind of trend analysis available through online conversations produces information far beyond the ‘numbers’ usually associated with traditional ‘asking’ analysis. The level of insight is truly remarkable.
What’s On Your Mind About What’s On Your Face
In 2010 there were just over 67,000 posts about cosmetics, makeup routines and purchasing behavior. In 2016 there were almost 1,500,000 posts. More conversations. More stories. More consumer insights.
Two of the major conversation topics about cosmetics have to do with ingredient sourcing and animal testing. If you’re in the cosmetics industry you need to know what people are thinking about these issues and what the trends are. When you look at the social conversation, here’s what you discover about the relative importance of these issues. Priceless.
And you can go so much deeper. Here’s a look at the ‘cruelty free’ issue on a head-to-head brand basis.
The New Trends In Nutrition
Your local grocery store may be the most competitive consumer ‘battlefield’ ever. Hundreds of thousands of products and low margins make selling groceries one of the toughest ventures. Any information that offers insights into consumer beliefs and behaviors around food can be very valuable.
For example, here’s a look at the relative importance of diet trends as seen through the eyes of industry/trend analysis. In this case we’re looking at how people feel about dairy, vegan, vegetarian and gluten free diets.
Using the available warehouse of global conversation, these are the positive and negative sentiments expressed about these four topics. And, again, mining the messaging even further we see not just what people feel, but why. This is a breakdown of various factors, good and bad, that people associate with these four diet categories.
It’s clear that the unforced, un-aided social conversation can zoom in incredibly close, so that spotting trends is less of a guessing game and more of a science.
Two Brands Walk Into A Bar
Alcoholic beverages is another very competitive category. And even the smallest insight can lead to better business for the brands that do their homework.
For example, you can rank wine brands by affordability, quality and selection. You can track positive and negative sentiments by brand. And you can easily see which brands are more popular with women and which are more popular with men.
But these demographic details are only the tip of the iceberg. Alcohol brands don’t simply want to know who buys their beverages and how they make purchase decisions — they also want to know what broader trends are affecting consumer demand on a large scale. For this we turn to consumer affinities. Trends can be spotted using affinity research, which, for example, can show the interests of white wine drinkers vs red wine drinkers. Is there a wine marketer in the world who wouldn’t want to know that?
How about beer drinkers vs wine drinkers. How do their interests and behaviors differ?
The Trend In Trends
The breadth of available data across the social landscape lets you study the conversation about virtually any industry, no matter how niche or taboo. Machine learning allows for an unbiased approach to discovering trends within an industry organically and scaling them with accuray. The potential for achieving key performance indicators is exciting. You can learn things like:
- % Lift in competitive share of voice
- % Lift in brand perception
- % Lift in perception of brand being an innovator/thought leader in the category
- % lift in market share
Figuring out what’s likely to happen in your business may be more important that what’s already happened. One is the future, one is history. Traditional reporting will rely largely on numbers.
Industry/trend analysis relies on the massive global conversation that is social media. It’s an important tool for manufacturers, marketers and agencies. This article gives you just a peek behind the curtain. You’d probably enjoy the whole show.