Knowing market trends and anticipating how demand or the development of a specific industrial sector will evolve has always been the key factor distinguishing companies that successfully plan targeted investments and production from those that, either unaware of these trends or in possession of incorrect information, have missed growth opportunities or, worse, have been forced to exit the market altogether.
Gaining early access to strategic information about the future evolution of one’s sector represents the primary competitive advantage for companies of all sizes, from SMEs to big companies. Today, it is finally possible to rely on accurate and timely forecasts.
Business Intelligence is the premier tool in this regard, now combining data science skills—from machine learning to AI—also applied to Big Data Analytics to allow companies to obtain such insights in real time.
Market Trends
Market trends are the movements or behavioral patterns observed in a specific sector or industry. They represent the general directions or tendencies that influence the supply and demand of products or services, as well as consumer preferences and competitive dynamics.
Monitoring and understanding market trends is essential for companies to adapt to changing market conditions, identify new opportunities, develop effective marketing strategies, and remain competitive in their sector.
The main trends of interest to companies cover various areas.
Consumer Preferences
Market trends reflect evolving consumer preferences, such as changes in needs, tastes, expectations, and purchasing habits. For example, there might be a growing demand for sustainable products or a preference for personalized experiences.
Emerging Technologies
The adoption of new technologies can give rise to new market trends. Consider how artificial intelligence, the Internet of Things (IoT), virtual reality, mixed reality, or automation can influence consumption patterns, create new markets, or change competitive dynamics. The Luxury & Fashion sector has led the way in integrating some of these technologies with the creation of Virtual Showrooms.
Demographic Changes
Market trends can be influenced by changes in demographic composition. For example, an aging population can create market opportunities for products and services aimed at seniors, while the emergence of new generations can lead to new consumer preferences.
Competitive Dynamics
Competitor strategies, mergers and acquisitions, the entry of new players, or changes in business models can influence market trends. These factors can alter competitive dynamics, affecting prices, product offerings, or distribution channels.
Events such as economic crises, pandemics, regulatory changes, or geopolitical events can significantly impact market trends. They can influence consumer confidence, spending habits, demand for certain goods or services, and market opportunities. Consider how COVID-19 has simultaneously represented a crisis for some markets and an opportunity for the emergence of new services and consumer behavior patterns.
Advanced Analytics and Augmented Analytics
Artificial Intelligence and the application of complex mathematical models now allow us not only to observe past or present behavior patterns but also to develop highly reliable future scenarios.
Companies can use a range of advanced analytics to understand market trends:
- Historical Data Analysis: Analyzing historical data on sales, customer preferences, past market trends, and other related factors allows companies to identify patterns and trends that may indicate future market changes.
- Time Series Analysis: This type of analysis focuses on modeling and forecasting data based on their temporal variations. Techniques such as temporal regression, spectral analysis, and ARIMA (AutoRegressive Integrated Moving Average) models allow companies to analyze time series and identify market patterns or cycles.
- Neural Network Analysis: Artificial neural networks allow companies to analyze large amounts of data and detect complex relationships between variables. Companies can train neural networks to identify hidden patterns, correlations, and interactions among the various factors influencing the market, gaining original insights and novel analyses.
- Social Network Analysis: With the growing importance of social media and digital platforms, companies can use social network analysis to understand market dynamics. This analysis involves exploring relationships between market participants, identifying influencers, analyzing sentiments, and spotting emerging trends through data generated by social media.
- Text Analysis: Known as Text Mining, or Natural Language Processing (NLP), this can be used to extract relevant information from texts such as customer reviews, social media comments, news articles, and industry reports. Through natural language processing, companies can identify customer sentiments, monitor brand reputation, and detect themes or topics relevant to market trends.
- Image and Video Analysis: Thanks to visual recognition technologies, companies can analyze images and videos to identify market trends. For example, image analysis techniques can be used to monitor the use of products or brands, recognize new design trends, or identify consumer desires by analyzing images shared on social media.
- Geospatial Data Analysis: This technique uses geographical information to understand market trends specific to different geographic areas. Companies can use data such as the geographical distribution of customers, demographic data, accessibility to retail points, and other geographical factors to gain a deep understanding of market trends at a local, regional, or global level.
Predicting Future Trends
Having access to this information before competitors, while being able to rely on the accuracy of the results, provides numerous competitive advantages.
Informed companies can adapt their marketing strategies, develop innovative products or services, and make decisions based on the most recent information, allowing them to stand out in the market and achieve a leadership position.
This translates into the ability to more effectively plan long-term business strategies, from production planning to resource allocation, geographic expansion, and product diversification, reducing the risk margin or potential losses.
An additional direct consequence is greater customer satisfaction: knowing consumer preferences and needs in advance allows companies to tailor their products, services, and marketing strategies to better meet customer desires, with a corresponding positive impact on loyalty and increased sales.
Market trends can reveal new growth opportunities and new customer segments, offering companies the chance to develop and launch innovative products or services that meet emerging customer needs, better and earlier than the competition.
Another significant advantage is risk reduction: market trends can also signal threats or impending changes that could negatively impact a company’s business. Knowing these trends in advance allows companies to take preventive or risk mitigation measures, such as market diversification or adapting business strategies, to reduce the negative impact of market changes or even turn them into new opportunities (emerging markets).
How to Access Advanced Analytics
To access such information, it is necessary to introduce into the company those management models and advanced analytics that have long been the prerogative of large multinationals but are now finally accessible to smaller businesses. We are talking about data-driven approaches and data democratization, which involve the entire company’s human resources system at all levels; but also about introducing data science as a corporate resource, either by internalizing or outsourcing the most “hard” skills, which cannot be separated from access to and management of Big Data and related Data Governance aspects.
The choice of analysis techniques, whether Advanced Analytics or Augmented Analytics, will depend on data availability, the industry in question, and the company’s specific objectives.
Our ready-to-market Business Intelligence solutions help companies introduce advanced analytics systems in a short time and with limited investments.
BBI Solutions combine the ease of use of a ready-to-use product, designed to meet the specific needs of various industrial sectors and business unit requirements, with the versatility of customizable and scalable solutions, ready to evolve with the changing business context.
We realize Business Intelligence & Advanced Analytics solutions to transform simple data into information of freat strategic value.
