The Art and Science of Trendspotting
For those whose job description includes identifying “early signals” or potential trends well ahead of time, the artistic aspect of trendspotting is still crucial. When things are truly early, there is simply not enough, if any, sales data to understand whether early movers have created sticky businesses that will survive. The problem with looking for “early signals” is that without any data-driven analytical framework or repeatable thought process, it easily becomes an overpaid exercise in biased cherry-picking.
That is why we prefer to administer the artistic approach with cultural analysis and behavioral science theory. In other words, we prefer to base our intuitions on more than just a gut feeling about platonic innovations divorced from the reality of their ability to generate sales.
The Art of Trendspotting
The best way to identify early signals in a grounded manner (i.e., not a whiteboard manner) is to embrace the entrepreneurial environment’s phenomenal real-world innovations…online…in specialty channels…at niche retail, including contemporary wellness outlets, ethnic grocers…natural and specialty retailers, etc.
The Hartman Group’s proprietary Trend iD process formula is geared for actionable results and includes:
- Identifying meaningful early signals through cultural analysis
- Differentiating between short-term fads and more impactful long-term trends
- Understanding barriers to the knowledge and sensory experience that can hinder results
- Identifying products that solve high-stakes trade-offs for a committed subpopulation or simply offer modern approaches to meeting existing desires
- Not shying away from niche consumer audiences
The Science of Trendspotting
The art of trendspotting is about identifying tiny, real-world innovations with potential for scalable, behavioral uptake by real people. But once enough players are pursuing the specific innovation and aggregate sales have crossed the $1M annual revenue mark in measured channels, it is possible to mathematically assess real consumer uptake in POS data. This is a powerful accelerant for innovation teams pursuing a fast-follower approach. This is an on-trend corporate innovation strategy that recognizes that legacy food and beverage brands are not often first-to-market disruptors of their home categories but, once a trend has been established by early-stage brands, they can leverage and absorb the innovation successfully. Nature Valley and Smartfood have had repeated wins using this approach.
But if velocities and growth are poor, on average, for a given innovation, knowing way up the innovation funnel allows you to ask, “Was it pricing? Execution?” If not, then you can ask your team, “Could it be that we just don’t understand this well enough to proceed with a similar offering?” Then the team can move on to pursue innovations where further analysis supports the original behavioral-growth hypothesis (the art).
Often the disconnect relates to poor behavioral understanding of barriers to adoption or poor execution by the first movers. This is where we practice a scientific approach to evaluating real-world innovations identified as promising by the art phase. Small businesses can be very unstable; most importantly, some can be achieving growth through overdistribution that creates a false positive in terms of consumer demand. Good demand analytics can factor out all this noise and see if the innovation is truly generating organic growth on its own.
This allows decision makers to better predict the likelihood that real-world, leading-edge innovation in its current product forms will actually take off and influence the category, retail buyers and the broader marketplace.
In the past five years, virtually all major RTE popcorn companies have launched a copycat of SkinnyPop’s base UPC in order to jump on the low-calorie, minimally processed popcorn bandwagon in a category that has historically been quite overprocessed. Our analysis finds that this is no fad but a true unmet consumer need in the category. Minimally processed RTE popcorn was not easy to find or it was calorie-heavy and indulgent. There was historically a latent trade-off between processing and calories in order to enjoy some convenient RTE popcorn at home. SkinnyPop eliminated both pain points and unleashed a new popcorn consumer base.
The most important aspect of the science component of trendspotting is that it quantitatively validates, or refutes, an innovation in the real world.
Trends need to be defined from a business perspective before trendspotting activities are funded. A willingness for C-level executives to learn the external, early-stage innovation environment is critical to making the exercise productive.
Trend identification cannot simply be fuzzy art or glorified intuition; it should always have a scientific component.
Good trend identification and foresight doesn’t happen in organizational isolation but rather in a cross-functional vetting process that ensures that only trends with potential for organizational uptake and monetization are advanced into any innovation funnel for product development.
Want to get at the leading edge of trend identification for your business? Contact: firstname.lastname@example.org