How to predict consumer spending trends? Use data, intuition
Look for consumers' search and buying patterns on your own website, Google Trends and Amazon.com.
NEW YORK—Small business owners who want to predict what consumers will buy next month, next season or next year can get some answers by mining the internet for data, and thinking about what that data means.
First, retailers and manufacturers should expect that a current trend will run its course, and they should anticipate that something that’s been hot for several seasons or years will run out of steam. Joanna Duda, owner of Pirillo Swimwear, a Chicago-based online retailer of women’s swimsuits, is changing her colour mix now that yellow has been popular the past few years.
“I think we’re getting sick of it,” she says.
Some tips for forecasting consumer spending trends:
- Look for consumers’ search and buying patterns on your own website, Google Trends and Amazon.com. Search trends tell you what they want and what they’d like to find.
- Social media sites can show you what consumers are interested in. Finding hashtags related to your type of business on Instagram and Twitter, and searching for Facebook groups with potential customers can help you learn what consumers want. Engaging with your own customers on social media will help you understand their interests and how their tastes and buying habits may be changing.
- Get creative with what you learn. If you can glean that customers are moving in a new direction _ for example, staying home more—think about the purchases they’re likely to make, says Marshal Cohen, a senior analyst at NPD Group, a company that tracks consumer trends.
- Look beyond your current core group of customers. Most of the people who sign up with Africa Travel for safaris tend to be age 45 or older, says Steve Pritchard, digital marketing consultant for the Leeds, England-based company. Pritchard, who tracks consumer trends on social media and Google, looks at younger consumers’ searching and buying habits, expecting that they would be the next wave of travellers to Africa. “We want to stay ahead of the curve,” he says.