Market research trend analysis: a step-by-step guide

Staying ahead of the curve can be difficult, especially in the face of technological advances like AI and new social media platforms like TikTok. Many businesses are struggling to keep ahead of their competition and understand what their customers want while retaining employees and growing their bottom line.

If you want to gain a competitive advantage and make more informed decisions about your business processes, plan to do regular market research trend analysis.

Market trend analysis can help you better understand what’s around the corner for your industry. You can use this knowledge to spot trends and adjust your business plan accordingly, differentiating yourself and your product offering while uncovering new ways to serve your customers.

Market trend analysis means examining data to track market trends over time. The data you uncover can help you predict future market behavior and consumer patterns.

This analysis can help every facet of your business, from product development to marketing.

Market trend analysis is often done during times of financial duress and economic uncertainty, as businesses can struggle with how to remain relevant. However, it’s worth investing in this kind of data analysis at any time of the year as it enables you to identify new opportunities and figure out ways to serve customers that your competitors haven’t clocked yet.

Every business, regardless of size or industry, should invest in market trend analysis. Here are a few of the most significant reasons:

Reduce investment risk

Deciding whether to invest in a new product or service can be tricky—even during an economic upswing. It’s hard to know exactly which way the market will turn next or predict what your target customers will gravitate toward.

Investing in market trend analysis allows you to close that gap and get a deeper understanding of whether the new product is a good investment or one to delay.

Identify emerging trends early

One of the best ways to discover what your target customers are likely to invest in is figuring out what emerging trends are affecting the market. You can harness these trends and tailor your marketing strategies accordingly, building brand awareness as you show your customers how “on the pulse” your business is.

Improve forecasting accuracy

Meeting customer demands is the cornerstone of business growth. Market trend analysis can help improve forecasting by identifying new market segments and letting you get a closer look at customer preferences.

Maintain a competitive advantage

Examining historical consumer interest can help you calculate future demand and identify gaps in the market. When you know your growth opportunities, you can take action quickly, outmaneuvering your competition and taking advantage of exciting opportunities.

Your team and methods for conducting the analysis might look very different from your competitor’s. This is because your goals will be unique.

That said, there’s a general five-step process for conducting the analysis that works for most organizations.

Step 1: identify emerging competitors, products, and industry terms

Identify your closest competitors and the products that are most closely aligned with yours. This is one of the first steps to take in any market trend research project.

It’s also important to figure out what trends to follow over time. You’ll want to think about whether those trends have peaked. In which case, they’ll now be static or receding. Or, you might identify trends that are exploding and have potential to grow further. The latter are trends with the best potential return on investment (ROI).

Whether you assign a team lead or several members of your team to this process (or you outsource it to an expert), allow the appropriate length of time to develop your research objectives and deliver against them. Doing this research properly can take time. Rushing through the process can lead to incomplete or inaccurate data.

Step 2: analyze quantitative data

Next, look at quantitative data to generate a picture of overall market potential. You might look at the following metrics:

• Market size: you might size your market to calculate the potential for future growth should you take advantage of trends. In this instance, you’d look at what the path forward looks like for those trends.

• Hiring trends: you might also review hiring trends relevant to market trends to get an idea of the market’s general health. If there are many new career opportunities and lots of hiring happening in that industry, it’s a good sign that the market is growing.

• Funding trends: these can also provide a glimpse into the state of the market. If investment companies and venture capitalists are actively funding the market and joining forces with companies in that industry, you can count on promising growth trends.

Keep in mind that any one of these data points by itself won’t firmly indicate success or failure. However, when taken together and viewed as a quantitative whole, you can use these benchmarks as a guideline for the rest of your market trend research.

Step 3: gather qualitative secondary data around each trend

While quantitative data is a critical input for identifying and sizing trends, qualitative data gives you a deeper look at how and why your target customers feel how they do. This kind of in-depth, straight-from-the-source information can help you uncover gaps in the market and serve your customers better.

To gather qualitative data, spend time online investigating the websites and applications your target customers use most. Reading reviews is a good way to get insights since they help you get a pulse on your customer’s pain points and the general sentiments around the trends you’re researching.

Social listening is another excellent way to get insight into your target market’s thoughts and concerns. Ask a team member to scan the social media platforms your customers use most often. Reading comments, posts, and reviews can be both informative and insightful.

Social listening tools like Awario track brand mentions on social media platforms like X and TikTok. This can provide an overall sentiment analysis that can help you evaluate what your competitors are doing and plan how you should approach your sales and marketing campaigns.

Finally, consider reviewing industry forums to get a more detailed look at customer pain points and feedback surrounding certain brands and products. Reddit and Quora are active forums that invite consumers of all ages and backgrounds to share their experiences with platforms and applications. You can join specific forums if they are of interest or search for keywords and brand names to see what people are saying. Compile the feedback you find and save it along with the rest of your market research for review.

Step 4: conduct primary research to gather user feedback

Primary research is one of the best ways to go the extra mile when conducting your market research trend analysis.

Gathering user feedback through user surveys and direct responses from consumers allows you to put your finger on the pulse of exactly what your customers want. Surveying existing customers via email or a direct interview can enable you to get specific and get answers to the questions you want to know.

Live interviews can be time-consuming, but they can also be a goldmine of information and insights. You can ask more detailed, nuanced questions and follow up on any talking points that require clarification. Use the insights you gain to adjust your product strategy and inform marketing campaigns.

Step 5: create a beta offer around trends

Now it’s time to test run your data. Rather than automatically changing major strategies or goalposts, a beta offer can be a solid starting point.

A beta offer, such as a pre-order or small test run of a particular product or service, will let you see whether your target audience will actually buy the item. If your offer is a success, consider moving forward with your wider plan. If it stalls or sales don’t match your expectations, take a closer look at the data you have gathered and see if there’s anything you have missed. At this stage, there’s plenty of time to adjust your strategy before investing a lot of company resources.

Trend analysis has numerous advantages. It can help you and your team uncover new opportunities for marketing and sales and show you exciting new ways to serve your customers. Beyond these clear advantages, market trend research can minimize risk and enhance decision-making, giving investors and stakeholders the data they need to make more precise investments in the company.

Of course, there are some disadvantages as well. Notably, the research is only as accurate as the data you collect. If your data is inaccurate, your results could be flawed.

Market trend analysis, when done properly, can also take a long time to complete. It could require the attention of one or more team members, which can be challenging for companies with small teams. Many companies choose to outsource their market trend research to an expert group or individual. While this can enable you to save time and ensure relative accuracy, it can also be expensive. The cost could be prohibitive for many smaller businesses or startups.

Market trend analysis can be a powerful tool to further your business growth. It can be a challenge, but following the tips and best practices above can make the task easier.

Crucially, be sure to speak to the customers in your category. These people may be your customers or those of your competitors. Identify your target audience before you conduct trend analysis. This helps you know you’re asking the right people the right questions. A market research tool can also make the process easier, saving you and your team considerable time and resources while helping you collect and collate the necessary data.

You should also define your goals ahead of time. Even if you don’t have a particular product you’re hoping to promote, having an idea of the questions and outcomes you’re hoping for can guide the process.

With the right mindset, resources, and tools, your market trend research can be a lucrative endeavor that pays off for your organization in the short term and beyond.

You can identify a market trend in the following ways:

• Analyze historical market data.

• Track changes in consumer behavior.

• Monitor industry moves and updates.

• Use both statistical (quantitative) tools and qualitative analysis to spot patterns.

• Regularly review competitor activities and category activities to confirm these trends.

There’s no set time frame for conducting a market analysis, although it typically takes a few weeks to several months. This depends on data complexity and scope.

Businesses can opt for in-house analysis using their own data, hire market research firms for detailed insights, or use hybrid approaches combining external expertise with internal resources to tailor the analysis to specific needs and contexts.