Trend Analysis as a Tool to Drive Innovation

When facing an innovation process, one of the biggest challenges that companies have to deal with, is where to start working. Which are the first steps to undertake? As in many other things, there is not a unique correct answer: methodologies propose different ways to start innovating, but almost all agree that trend analysis is a key tool in the initial stages of the Fuzzy Front End of Innovation.

 

But not all fancy changes in society or the marketplace constitute a trend. Before getting into trend analysis, it is useful to agree on what we mean by a trend. We could say that a trend is an incipient change, although already significant, in the behavior, activities and values of a key player in a sector, for example, an important segment of the population, a competitor or a new technology.

Trend analysis is one of Innovation’s classic tools, though it is often used superficially. Quite often its purpose is to highlight current issues that affect businesses, published by reputable institutions such as McKinsey or IBM. At other times, it sets out to analyze the latest launches of new product and service by competitors, and sometimes it outlines examples provided by “the typical trend hunter” or featured in “top trends” articles which describe the hottest trends in New York, London or Worldwide. However, trend analysis should go beyond just describing the hottest topics and, if done properly, it constitutes a valuable tool of strategic depth.

For most large or established companies in a market, understanding the “maturity level” when analyzing trends, is crucial. Somehow, you need to find a balance between “niche” and “mainstream” to find the right spot. If you identify an incipient change which is still very niche (however hot and appealing), it is going to be difficult to make a business case out of it. You need to figure out at what stage of the adoption curve the trend is.

When describing an interesting trend for your business, you need to identify its maturity level and make sure you capture it just at the right moment, after it is “too niche” and before it is “just mature”.

 

If you identify a trend being at a very early stage (ie. something appealing to early adopters only…), probably you need to validate how long it is going to take to gain volumen and show consistent growth; while, if the trend is already very popular and close to the mainstream, this probably means the competitive landscape is more complex and less attractive.

Finding the right moment to capture a trend and transform it into a business opportunity it is part of the success of this analysis. In fact, for large companies, most of the products launched are taking advantage of a trend which has already been taking place for some time. If you think on how companies were taking advantage of “healthier food” or “healthy snacks”, you will see that most of the successful launches took place when these trends were well known… but not yet a consolidated market segment. Very hardly, large companies leverage on a really new topic.

Hottest trends are very nice for trend reports, but hardly identify a valuable trend on which you can leverage, except if you are a startup. Small and flexible companies tend to be able to exploit “niche opportunities” with higher success. This is one of the reasons why larger companies look after startups in certain areas, to identify when a trend shows an interesting business case and enough potential to be attractive. This is especially right for social and technological trends.

A good trend analysis should take under consideration several kinds of areas. As different sources have pointed out, we can broadly establish three main areas of trend analysis:

 

  • Social:It examines both the company and the consumer / customer / user (e.g., consumer behavior changes). It focuses on what society wants (“DESIRABLE” in the attached chart)
    Trend Analysis

    Trend Analysis areas to drive innovation exploration (“” in the attached chart) wants (“” in the attached chart)(“” in the attached chart)(“” in the attached chart)

     

  • Economic: it analyzes the business and the law (for example, changes in the business model). It focuses on the ways you can organize a specific business (“VIABLE”, in the chart)

 

  • Technology:it considers technology (e.g., new technologies) and looks at what the technology allows you to do. (“POSSIBLE”)

 

 

Identifying key trends is not enough; we must properly understand their deep hues. To do this, we can try to find out their origin, the way they present themselves and what foreseeable implications they may have

 

In fact, the trend as we perceive it, is just the tip of the iceberg. Once we have identified the trend, we need to understand what is behind it, what causes it, the reason why, etc… A good example of this is the “Pret A Manger” case. This famous London based healthy foodservice company was a successful case thanks to its analysis on why people were replacing eating at fast food places with bringing lunch from home. Behind the trend of “bringing homemade food to the office” they saw 2 segments: price sensitive and health conscious. They decided to explore this second target, and the rest is history.

 

Exploring a trend is not always easy. To guide our exploration we can use some tips and relevant questions for each area.

Social Trend

 

For example, as regards social and consumer trends we could ask:

  1. What basic needs and desires does this trend address? Which social benefits could it bring?
  2. What is boosting the surge in the trend right now? What has changed in the environment?
  3. What impact does this trend have on target needs, attitudes and beliefs?
  4. Which targets are more receptive to this trend?
  5. We can also note down some interesting examples and relevant sources for future follow up and sharing across the organisation.

Once these trends have been identified and understood, we have to see how they affect our business and brands. Coming back to the example of a consumer trend, we can try to answer the following questions:

  1. How does this trend affect other businesses (other than ours) and how are they reacting (analogies)?
  2. How and where can we implement this trend to our business or brand? Is it necessary to make any changes to our business / brand?

 

We could ask the same kind of questions to analyze trends in business or technology. For business trends, issues to be considered could be:

  1. What business needs does this trend address? Which economic or strategic benefits could it bring?
  2. What is boosting the surge in the trend right now? What has changed in the environment?
  3. What impact does this trend have on target needs, attitudes and beliefs?
  4. Which targets are more receptive to this trend? What type of companies or segments are the most affected by this trend?
  5. We can also note down some interesting examples and relevant sources for future follow up and sharing across the organisation.
  6. How does this trend affect other businesses (other than ours) and how are they reacting (analogies)?
    How and where can we implement this trend to our business or brand? Is it necessary to make any changes to our business / brand?

 

For technology trends, in a similar way, we can ask:

  1. What technology needs does this trend address? Which benefits could it bring?
  2. What is boosting the surge in the trend right now? What has changed in the environment?
  3. What impact does this trend have on current technologies?
  4. Which targets are more receptive to this trend? What type of companies or segments are the most affected by this trend?
  5. We can also note down some interesting examples and relevant sources for future follow up and sharing across the organisation.
  6. How does this trend affect other businesses (other than ours) and how are they reacting (analogies)?
  7. How and where can we implement this trend to our business or brand? Is it necessary to make any changes to our business / brand?

 

In fact, most often, the same trend impacts society, business and probably technology. Most likely, one trend can impact several areas. However, using an initial focus (social, business or technology) can help out in an initial trend search and guide teams in their research areas.

These questions can help you to organise trend scouting and they are specially helpful if you want to organise trend analysis around a large team or your organisation. If you would like to involve a large number of people and departments in the task to identify and analyse trends, using some standard questions and templates can be very helpful. For this reason, we propose you the following template that can easily be used by all people involved in this process and guide their analysis.

Formato tendencia

 

In the end, the real value of a trend lies in the organization’s ability to bring new ideas to our business from the business itself. Thus, when we are describing a trend, we must generate possible ideas for products or services that fit the trend, by finding answers to the following questions: What ideas does this trend inspire or generate?, How and when can we apply this trend to our business? This question comes last but not least and this is where you need to allocate time and resources to explore options and make it relevant to your business.

 

Trends addressing needs and capabilities

A very interesting exercise during the process of trend analysis, is to cross the strongest ones in the social, technological or economic field with our costumers’ unsatisfied needs (insights or hidden needstates), which we could have found with other tools. If we find a synergy between a trend and an unmet or poorly met need, we may have identified a very important innovation opportunity.

Another part of your analysis should be to match trend analysis with your brand equity and your company capabilities. You should find answers to this question “How can we turn this trend into a successful business case using our brand proposition or company capabilities?”

Company capabilities and Brand Positioning should help you to filter trends and to address opportunities with a higher fit with your strategy. When you are able to translate a trend that impacts your business into an opportunity with a higher fit with Customer needs and Company/Brand Values, you will have built the right background for successful innovation.

Understanding synergies between Trends, Customer Needs and Brand Capabilities will ensure higher relevance between the opportunity and your business and increase your success ratio.

 

When properly used, trend analysis becomes a powerful tool and one that has led to many innovations. What’s more, it’s suitable for any industry. For example, the “building a more sustainable world” trend has resulted in many innovations in different industries such as household cleaners, automotive, energy, recycling, etc.

The trend analysis is a starting point. It allows us to identify business opportunities that must be checked with other tools in the initial phase of the innovation process, leading us to new releases. Undoubtedly, after the trend analysis we still have a long way to go but it is a good start on the road to innovation.

We think that a broad and comprehensive trend analysis once a year, possibly when preparing the company’s strategic plan is a good initiative to help build a powerful innovation strategy.

So, Do you really know which trends are affecting your business, now? Have you any idea how they can impact or disrupt your business?

 

Just some basic questions to get started!

 

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Xavier is an experienced executive, consultant and lecturer. He has worked over 15 years as marketer at Nestlé, Sara Lee and Panrico-Donuts, and over 10 years as Marketing Director and Board member, leading national and international teams. Since 2005 he has been acting as a consultant for several international growth projects. Between 2010 and 2015 he also acted as Innovation Leader at ESADECREAPOLIS, ESADE’s Collaborative Innovation Ecosystem. Since 1999, Xavier is also a renowned Marketing, Innovation and Branding lecturer at ESADE, as well as other international universities and companies. He participates in several entrepreneurship initiatives, as well. ----------------------------------------------------------------------------------------------- Xavier es un experimentado directivo, asesor y profesor nacido en París y afincado en Barcelona. Ha trabajado más de 15 años como profesional del marketing y las ventas en Nestlé, Sara Lee y Panrico-Donuts, y más de 10 años como Director de Marketing y miembro del Comité de Dirección, liderando equipos nacionales e internacionales. Desde 2005 ha venido desarrollando su faceta de consultor y asesor en diversos proyectos internacionales de crecimiento. Entre 2010 y 2015 también lideró las actividades de Innovación y Emprendimiento de ESADECREAPOLIS, el centro de Collaborative Open Innovation de ESADE. Desde 1999, Xavier también es un reconocido profesor que imparte cursos de Innovación, Marketing y Branding en ESADE, así como en otras universidades internacionales y renombradas compañías. Además, Xavier participa en diversas iniciativas emprendedoras, como inversor y asesor experto o Professional Board Advisor.

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