Research Intelligence
Market Trend Analysis is Crucial for Your Market Research. Here’s Why
Imagine being the first to discover the next big consumer craze in your industry. That one feature every business owner frowns at today, but won’t be able to live without tomorrow. Can you grasp the scope of opportunities opening up? Effective marketing trend analysis can pave the way.
This guide will show you how to get started and analyze market trends. Here are the topics covered:
What is market trends analysis?
When we talk about market trend analysis, it’s much more than checking overall demand fluctuation. A thorough analysis investigates all aspects of your market. You’ll get a deep understanding of consumer behavior, its impact on the market in general, and your business in particular.
A trend can be defined as an assumed future development or as an overall direction of the market. But how can you detect it early?
Check out our post – Trendspotting: Why All the Market Leaders Are Doing It
Usually, the first signs of a shift show themselves through social media or engagement metrics. This crucial rise or fall in traffic, engagement, or variation in demographics is what reveals your competitive advantage.
Remember: The earlier you recognize these, the sooner you can react, prepare for potential threats, and take advantage of upcoming opportunities.
Market trend analysis examples and what to learn from them
There are various kinds of market trend analysis that each offers unique and important insights.
Megatrends or macro trends, for example, develop over a long period of time and affect the majority of the industries. They are often caused by major shifts in society and the global economy. For example, the collapse of major banks in the U.S. in the financial crisis of 2009 had a striking impact on consumer demand and spending habits as the stock market plummeted. Millions of people saw their home values plunge and their retirement accounts shrink. This trend spread over the globe and even impacted future movements across industries. Analyzing these trends provides an overview of the global market and developments with long-lasting consequences. It’s crucial to keep these in mind for your overall business strategy.
Historical trends analysis investigates how industry trends developed in your sector in the past. The time frame can range anywhere from historical data: the past 24 hours, the previous week, and even three months to several years ago. This type of analysis typically involves current market period-over-period analysis (e.g., month-over-month, quarter-over-quarter, or year-over-year).
This helps you understand market activity – where your landscape is heading through historical analysis.
Consumer trend analysis examines the factors that drive product consumption. The focus is on understanding consumer needs and behavior. You can learn how the launch of a specific new product affects the market and if the trend is escalating or evening out.
Seasonal and temporal trend analysis looks at market shifts related to external factors such as climate and holidays, which are usually recurring. During November and December, just before Christmas, consumers ramp up their gift buying for the season. As a result, the retail and CPG sectors see a significant boost in demand. These months are the most important time in the year for increasing revenues.
Online travel agencies, like Expedia, Booking.com, and Google Travel, on the other hand, are at the height of their popularity at the beginning of the year. This is because consumers tend to book their summer vacations around January. Understanding seasonal trends let you adapt your marketing strategies and offer special deals at various times of the year. For example, fashion websites typically conduct time-limited sales at the end of every season in order to get rid of current inventory and prepare for the upcoming season.
Geographical market trend analysis inspects variations in trends based on location. The idea is to compare the market in different geographical areas and understand how they develop in each. For instance, TikTok, the social media platform popular among younger generations worldwide, quickly overtook the market in Asia in late 2019. However, it was initially much slower to spread in western countries.
Being aware of the variances in website demographics can help you better focus your energy and resources.
Social media-based trend analysis is mainly useful for marketers, but also for business development. It involves monitoring consumer behavior on social media. Social media listening platforms, like Sprout Social’s listening tool, have become increasingly popular as a means to stay on top of conversations and discussions on social media that surround customer sentiment, which ultimately allows you to improve your brand’s health.
Desktop vs. mobile market trend analysis aims at catching variations in customer behavior on different devices. This can be helpful in specific cases, i.e., when you see a drop in traffic, you might want to check if all devices are affected equally.
Why do you need to analyze different types of market trends
The market is a dynamic place, influenced by many factors. Demand for your product or service depends on the consumers’ current wants, needs, and preferences.
Some trends are spontaneous shifts following a specific trigger, whereas others are recurring and predictable. An effective competitive analysis provides you with critical insights about the current landscape of your industry, while market trend analysis helps you predict how it may evolve quickly.
A sound understanding of the dynamics of market trends significantly enriches your business forecasting. There isn’t one way to analyze everything. You need to cover a range of areas and metrics in your market trend analysis. This allows you to catch on early and react before your competition beats you to it.
What triggers shifts in market demand?
Here are the factors to look out for:
- New technology: As new technology enters the market, old ones could be pushed aside. Innovation can also create demand for other related devices, materials, or tools. The market may not immediately react to new technology, but it will set change in motion.
- Economic factors: A hurricane, large fires, diseases, or the passing of an important figure take their toll on the economy. Consumers will adapt their behavior and create new trends. Consider the current pandemic, for example, which has had an enormous influence on every economy and virtually every business in the world, and the end is still unknown.
- Political changes: When politics change, societies change. There may be new regulations affecting trade and trade agreements. Government priorities and financial policies can change market dynamics, followed by various consumer reactions.
- Social developments: Public awareness of social issues also brings forth an adjustment in market trends. Campaigns such as the #MeToo movement and “Black Lives Matter” are felt in customer preferences. Also, as the demographics of your target audience shift, so does consumer purchase behavior. Notably, the consumer behavior of millennials is strikingly different from any other generation.
How to analyze the market using digital tools
The big question is: How will the market change, and what does it mean for you?
The only way to reach plausible conclusions is to collect relevant data and facts from reliable online sources.
1. Global industry research: leading publications and consultancies
Follow reliable business publications and papers. Forbes and Business Insider provide data about the global economy. You can also access periodic reports published by large consulting firms such as McKinsey & Company, Bain, and Deloitte. These are good for spotting and understanding megatrends. There may be other publications focused on your specific industry sector, so it’s a good idea to conduct proper research instead of solely relying on the big names. Also, keep an eye on your industry leaders, as they often are the first to catch on to trends.
2. Content research: BuzzSumo
Stay on top of trending topics in the news and media. With BuzzSumo, you can discover the most read articles and debated issues. The tool provides insightful statistics regarding the content readers search and consume. This is great to identify trends spurred by new technology, political or social changes, short-term trends, and even temporary peaks or slumps in a market trend.
3. Social media research: Sprout Social and Hootsuite Insights
Consumer trends are often visible in social media before they make an impact on the market. Use tools such as Sprout Social and Hootsuite Insights to get related market trend analysis data on what’s trending and where the market might be heading.
4. Web analytics: Google Trends and Similarweb
Web analytics provide a more granular view of all types of trends. Google Trends is a great free tool that lets you identify consumer behavior towards popular products and services. You can dig even deeper with Similarweb’s market research tools.
Understand how businesses in your industry category are affected and benchmark against them. With real-time website traffic statistics and analytics, you can evaluate almost any type of trend. You can cross-reference the information you find on social media and elsewhere with metrics from commercial sites.
5. PPC: Google AdWords
Keyword trends are indicators of consumer preferences. Find out which keywords are going strong using Google AdWords or Similarweb’s keyword research tool. For instance, you can see stats for the past seven days at a glance to help you feel the beat of the market.
We’ve created a useful checklist to help you keep riding the current. Record the data you collect into the spreadsheet and easily analyze what it tells you about market trends.
How to fine-tune your market trend analysis to improve your digital research
After you’ve gathered knowledge about market trends, the next step is to assess their significance for your business. Here are a few questions to ask yourself:
- Is this global trend relevant to my industry? Does it impact my sector directly or indirectly? Will the consumer need my product less or more?
- Do I need to adapt my marketing or business strategy, or am I on the right track?
- Is this global trend relevant to my industry?
- Are all my competitors equally affected?
- Could this change the competitive landscape?
- What are the potential threats/opportunities for me?
Here’s where Similarweb can provide much-needed answers:
Compare up to five websites or apps, identify traffic gaps and trends among them, and see who’s improving and who’s struggling. See who was more affected by a specific development in the market and who was affected less. You can compare trends across a historical timeline, social media, and consumer behavior for your direct competitors. This will help you better understand where they are heading, as well as if they are an increasing threat to you and what you can expect.
Another tool that lets you deep-dive into market trends is our Conversion Analysis. Unearth bottom-of-the-funnel conversion data of your competitors.
Compare traffic trends with conversion trends and identify variations per competitor. For example, if one company shows steadily climbing traffic from email marketing while every other competitors’ email marketing strategy is going down, check if conversions and sales generated from this traffic source also increased and then investigate. Are they on to something, and are others going to follow?
Also, look at how each competitor fits in with the overall industry Similarweb provides you with industry-specific data. Are sales through apps increasing in your category? Do people download more or less educational material? Is the engagement of your target audience on social media decreasing? Draw conclusions for your own marketing and business development.
Analyze the market per segment. You can find product lines that are on the rise and business areas that are losing ground.
Finally, use the keyword analysis tool to uncover trends in online marketing and beat the game.
Use market trend analysis to advance your business strategy
Market trend analysis should be part of your initial market research. However, its main purpose is to keep you aware of market trends and shifts at all times. Similarweb allows you to continually track, measure, and benchmark trends, so you can avoid threats and monitor your competitive landscape. Start discovering new business opportunities in your industry.
Pro Tip: Similarweb data is updated daily within a 48 to 72 hours lag time so you can quickly recognize emerging market trends and opportunities for growth.
FAQ
What is market trend analysis?
A deep understanding of consumer behavior, its impact on the market, and your business.
What is a market trend analysis example?
An example of market trend analysis is the collapse of major banks in the U.S. in the financial crisis of 2009. Millions of people saw their home values plunge and their retirement accounts shrink, deeply impacting consumer demand and spending habits.
How will the market change and what does it mean for me?
A good way to figure out how the market will change and impact you is to stay updated on reliable online sources covering global industry, content, and social media research.
Related Posts
Track your digital metrics and grow market share
Contact us to set up a call with a market research specialist