Fads tend to come in fast, and leave just as quickly, whereas trends generally take longer to develop and represent a directional shift. One simple example can be found in the food industry, in which diets such as the Scarsdale, South Beach, and the Mediterranean were quickly adopted by consumers, but generally faded into obscurity within months or years. By contrast, consumer’s healthier eating habits, including the preference for fresh food while eschewing excess salt, sugar, and processed foods, has grown more slowly over time. However, it appears to be a trend, as it’s highly unlikely that consumers will suddenly switch course and adopt a completely different type of behavior.
How do you ensure that a “trend” is not a “fad”? One method is to track the market on an ongoing basis. Conducting a weekly, monthly, or quarterly tracking provides a larger window or framework for analysis, and will make it harder to cherry pick specific data nuggets that may be anomalies, and do not present an accurate picture of behavior or trends.
For example, I worked with a client that was planning a new range of smaller sized home goods. He was basing the development of these products based on the assumption that people were shunning large McMansions, and instead opting for more modest dwellings. As a result, he believed that people would be clamoring for smaller items that would fit into these tighter spaces.
The client had pulled data indicating that average home sizes were on the decline from 2008 through 2009. He also was insistent that demographic trends would dovetail with these purchasing trends. Millennials, the more than 75 million people born between 1981 and 1997, he claimed, would be flocking to these smaller homes, based on the results of a single survey indicating that this group preferred smaller homes, rather than the large, showy palaces of excess that dotted the landscape prior to the economic recession.
The problem was that the client focused his research efforts on a very small slice of time (a two-year period that happened to also coincide with a major market recession), and relied on a single survey to buttress his argument.
Over the past few decades, new home sizes have grown steadily, according to the US Commerce Department, rising from just over 1,500 square feet in 1974, to just over 2,400 square feet in 2014. There have been dips which coincided with economic recession (such as during the Great Recession of 2008-2009), but the overall trend line has shown a slow, steady increase in the size of new homes. That’s why it’s important to consider data points over a longer time horizon to identify true directional trends, rather than fads or short-term hiccups.
Secondly, the client relied on broad cohort-group generalizations, and failed to consider the typical behavior pattern shifts that occur as people age. It’s easy to say that Millennials will act a certain way based on survey responses captured in 2009 when the oldest in this generation was just 28 years old. But as people age, it’s likely that the majority of them will fall into similar patterns of behavior as those in previous generations, including earning more money, getting married, raising a family, and moving to the suburbs or to larger homes within city centers, which likely will shift their thinking on homes, spending and saving, and other key points. All one needs to do is look at the majority of Generation X, which has shed the slacker image portrayed in “Reality Bites” or “Singles,” and has generally fallen into conventional societal norms.
That’s why a research plan needs to include the following elements:
- A desire to uncover trends and drivers over a long time horizon
- Assessment of the targeted customer segments, both as an independent group, as well as considering lifecycle, economic, or other factors that may impact how their opinions and views may shift over time
- A willingness to find disparate data points, and a commitment to analyzing those to find consensus
- A willingness to accept the results of the research, and then modify strategic plans, rather than manipulating the findings to suit the plan
All told, research can and should be used as a tool to uncover the real trends and drivers that can help you properly position your product or service, instead of simply being utilized as “check the box” confirmation strategy.
What are your thoughts on the use of research today?