The success of companies and organisations very much depends on their ability to detect trends and understand their impact on the dynamics of their target market. Doing away with 'short-termism' in favour of playing the long game, and knowing how to tell a trend from a fad, has never been more important. And as new opportunities emerge almost on a daily basis, many public and private organisations are beginning to appreciate the value of trendwatching, as well as the benefits of looking beyond daily business operations and adopting a more future-oriented perspective.
No part of our lives will be left untouched by emerging technologies and innovative companies. Tech startups are disrupting legacy corporations, smart cities are changing the way we live, and scientists are reimagining how we fight diseases. The amount of data we produce in that process doubles every two years, and rising levels of connectivity create new networks among the four billion people that use the internet. Multiple trends converge and create new opportunities and threats that determine the winners and losers in the market. Clearly, looking ahead of the curve in such a complex environment is more important than ever.
Prioritising short-term concerns over long-term benefits is a mistake
And yet, many companies, individuals, and even governments seem preoccupied with short-term solutions, ignoring the benefits of long-term vision. Take, for instance, the fact that almost 80 per cent of chief financial officers (CFOs) would “sacrifice economic value for the firm in order to meet that quarter’s earnings expectations”. Such ‘short-termism’ prevents companies from understanding the future and creating a sustainable business. One way to solve this issue and see the big picture is to find and analyse key trends that shape the global economy and drive innovation. Companies that engage in trendwatching usually dominate the market, leaving the competition behind and creating value for shareholders and customers alike.
Ignoring trends, however, can sometimes be an easier course of action. For instance, in the case of Facebook, placing short-term profit above data privacy concerns might have been a lucrative move for shareholders. However, it led to data breaches, congressional hearings, massive fines, a damaged brand, and advertisers pulling away from the platform. In hindsight, it’s clear that Mark Zuckerberg misunderstood the importance of data privacy in people’s lives and the lengths to which authorities will go to tackle this problem.
Trendwatching, clearly, is crucial for the survival of any business. It consists of contemplating how emerging consumer, market, and social factors could disrupt the future. Companies adept in trendwatching are rarely caught off-guard by market developments. They think in years-long timeframes, instead of quarterly periods.
Disruptive trends tend to converge and produce new opportunities and threats, leading to increasingly complex business environments. Artificial intelligence (AI), for example, is changing the world and powering many modern services like e-commerce and online streaming. But combining AI with IoT devices, edge computing, digital twins, and robots leads to the creation of smart factories, which then manufacture high-tech products that will disrupt some other industry. Change is the only constant, which is what makes trendwatching a critically important skill.
The important role of trendwatchers
The need to understand the interaction of various trends and their potential impact led to the emergence of trendwatchers – experts that help companies rise above their day-to-day tasks and explore the future. They ensure that businesses pay attention to lasting trends that change our attitude and the collective mind instead of focusing on hypes that fade away quickly. Trendwatchers paint bold, yet plausible pictures of the ways in which technology could change our lives, and these predictions are relevant not only for major corporations, but also for all of society. NASA, DARPA, global NGOs, car makers, the retail industry, tech firms, public institutions, and many other organisations rely on these experts to show them a glimpse of what lies ahead.
Trendwatchers like Richard van Hooijdonk translate multiple trends into instructive materials that companies can use as a guideline. For instance, e-books such as 25 trends for 2019 help business leaders to identify which market forces are most likely to impact their company. Futurists and trendwatchers can also warn businesses and governments about cyber-threats such as in the e-book 25 Cyberthreats to Fear. Van Hooijdonk also explores topics like building self-sustaining colonies on Mars, how cities use technology to tackle homelessness, or whether artificial islands could offer a solution for climate migrants and the growing global population.
Knowing how to benefit from micro- and megatrends
Whatever the prediction is about, though, it’s important to keep the various subtleties of trendwatching in mind, such as knowing the difference between microtrends and megatrends. Long-lasting global shifts such as climate change or the digitisation of society are considered megatrends. Companies don’t have much influence over these events, and the best they can do is to adjust their business model accordingly. And while doing so, they shouldn’t ignore small-scale events that might appear insignificant at first, but could eventually turn into lucrative markets.
These events, known as microtrends, are defined as “the under-the-radar trends that may involve only 1 percent or so of the population and yet they can have outsized influence”. Think of veganism when it just started to appear as a minor hashtag on Instagram in 2012. Over the next seven years, it grew into a multi-billion dollar industry with more than 60 million ‘#vegan’ posts on Instagram alone. Companies are constantly on the lookout for trends like these, where the first entrants to the market can reap significant profit.
What determines winners and losers in the market?
Apple demonstrated multiple times how to spot and act upon trends. Back in 1997, it released the first iPhone, a smartphone with touchscreen technology and software that made it an extremely profitable product. In 1984, Steve Jobs already predicted that we would have important portable tools for accessing information. In 2001 the company made the iPod that became hugely popular, as it provided consumers with convenient access to music. And along with iTunes, Apple’s products paved the way for the digital music market, which is now marked by streaming services in which this California-based giant competes with the likes of the Swedish startup Spotify.
Not every company was as successful as Apple in understanding trends, though, and Nokia is a prime example. In the late 1990s and early 2000s, Nokia was an undisputed leader in the mobile phones market. However, the company failed to realise just how important software would become for smartphones. iOS and Android mobile operating systems were superior to Nokia’s Symbian in terms of services, apps, and functionality. Also, it took the Finnish company too long to grasp that touchscreens weren't a fad, but rather a lasting trend. These failures, along with poor leadership, caused Nokia’s mobile phone market share to drop from 50 per cent in 2007 to less than five per cent by 2013.
Xerox is another tech corporation that missed growth opportunities because of poor trend forecasting. Although primarily known for its printing solutions, Xerox was actually one of the very first companies that developed important elements of personal computing, such as the graphical user interface, desktop computing, and the computer mouse. The board of directors, however, wasn’t convinced about the potential of these technologies, and ordered engineers to share them with Apple. This unfortunate decision led to Apple and Microsoft moving ahead and spearheading the personal computing revolution, and Xerox missing the chance to diversify its business.
Luckily, Xerox survived to this day, which can’t be said for Toys R Us. The American toy store chain filed for bankruptcy in 2017 and closed all 800 of its stores in 2018. The downturn of this iconic company started in 2001, when it inked a deal to become the exclusive toy seller on Amazon. Under the terms of the agreement, the toy producer would redirect all traffic from its website to Amazon. But Bezos eventually allowed other toy merchants to sell on its site, and the relationship with Toys R Us went sour. The matter was settled in court, but the damage was already done, as the toy store chain failed to develop its own e-commerce operations and move away from brick-and-mortar stores. And faced with ever-growing competition from online retailers, Toys R Us incurred losses for years, before finally filing for bankruptcy.
Analysing trends to create lasting value
The cautionary tales of mighty corporations falling victim to new trends are a reminder that as the world becomes increasingly connected, the pace of technological change is set to increase even further. Multiple trends converge and create new threats and opportunities for solving some of the most pressing problems humanity faces. And it takes only a few years for companies, and even entire societies, to transform. Staying ahead of the curve requires careful observation and analysis of trends that shape our future. To that end, trendwatchers can be an invaluable asset, as they open new horizons to people overwhelmed by day-to-day business. They help private and public organisations to spot relevant trends and use new technologies in a way that creates lasting value.
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