Houston voices

Rice researcher delves into the importance of trendspotting in consumer behavior

Keeping on track with trends is crucial to growing and developing a relationship with your customers, these Rice University researchers found. Getty Images

Every business wants to read consumers' minds: what they love, what they hate. Even more, businesses crave to know about mass trends before they're visible to the naked eye.

In the past, analysts searching for trends needed to pore over a vast range of sources for marketplace indicators. The internet and social media have changed that: marketers now have access to an avalanche of real-time indicators, laden with details about the wishes hidden within customers' hearts and minds. With services such as Trendistic (which tracks individual Twitter terms), Google Insights for Search and BlogPulse, modern marketers are even privy to the real-time conversations surrounding consumers' desires.

Now, imagine being able to analyze all this data across large panels of time – then distilling it so well that you could identify marketing trends quickly, accurately and quantitatively.

Rice Business professor Wagner A. Kamakura and Rex Y. Du of the University of Houston set out to create a model that makes this possible. Because both quantitative and qualitative trendspotting are exploratory endeavors, Kamakura notes, both types of research can yield results that are broad but also inaccurate. To remedy this, Kamakura and Du devised a new model for quickly and accurately refining market data into trend patterns.

Kamakura and Du's model entails taking five simple steps to analyze gathered data using a quantitative method. By following this process of refining the data tens or hundreds of times, then isolating the information into specific seasonal and non-seasonal trends or dynamic trends, researchers can generate steady trend patterns across time panels.

Here's the process:

  • First, gather individual indicators by assembling data from different sources, with the understanding that the information is interconnected. It's crucial to select the data methodically, rather than making random choices, in order to avoid subjectively preselecting irrelevant indicators and blocking out relevant ones. Done sloppily, this first step can generate misleading information.
  • Distill the data into a few common factors. The raw data might include inaccuracies, which must be filtered out to lower the risk of overreacting or noting erroneous indicators.
  • Interpret and identify common trends by understanding the causes of spikes or dips in consumer behavior. It's key to separate non-cyclical and cyclical changes, because exterior events such as holidays or weather can alter behavior.
  • Compare your analysis with previously identified trends and other variables to establish their validity and generate insights. Looking at past performance through the filter of new insights can offer managers important guidance.
  • Project the trend lines you've identified using historical tracking data and their modeling framework. These trend lines can then be extrapolated into near-future projections, allowing managers to better position themselves and be proactive trying to reverse unfavorable trends and leverage positive ones.

It's important to bear in mind that the indicators used for quantitative trendspotting are prone to random and systematic errors, Kamakura writes. The model he devised, however, can filter these errors because it keeps them from appearing across different series of time panels. The result: better ability to identify genuine movements and general trends, free from the influence of seasonal events and from random error.

It goes without saying that the information and persuasiveness offered by the internet are inevitably attended by noise. For marketers, this means that without filtering, some trends show spikes for temporary items – mere viral jolts that can skew market research.

Kamakura and Du's model helps sidestep this problem by blending available historical data analysis, large time panels and movements while avoiding errors common to more traditional methods. For managers longing to glimpse the next big thing, this analytical model can reveal emerging consumer movements with clarity – just as they're becoming the future.

(For the mathematically inclined, and those comfortable with Excel macros and Add-Ins, who want to try trendspotting on their own tracking data, Kamakura's Analytical Tools for Excel (KATE) can be downloaded for free at http://wak2.web.rice.edu/bio/Kamakura_Analytic_Tools.html.)

------

This article originally appeared on Rice Business Wisdom.

Wagner A. Kamakura is Jesse H. Jones Professor of Marketing at Jones Graduate School of Business at Rice University.

Trending News

Building Houston

 
 

Register for some of these informative online events happening throughout the month of March. Photo via Getty Images

March marks a full year of attending online events — from Zoom panels to virtual conferences. But, the shows must go on with another month full of online innovation and startup events that Houston innovators need to know about.

Here's a roundup of virtual events not to miss this month — from workshops and webinars to summits and pitch parties. Note: This post might be updated to add more events.

March 1-5 — CERAWeek by IHSMarkit

In lieu of the week-long, in-person mega-conference that is the annual CERAWeek by IHSMarkit, the 2021 iteration will be completely virtual. Need some ideas of what panels and talks not to miss? Click here for five recommendations of what to attend.

The conference takes place Monday, March 1, to Friday, March 5. Click here to register.

March 2 — Houston Innovates: Digital transformation and Innovation in Oil & Gas

Digital forces are changing the skills an executive needs to manage organizations. In a world that's become increasingly digital, energy companies can sometimes find it hard to adapt. Join General Assembly Houston for a panel discussion with:

  • Sameer Khan, digital leader (MarTech and Transformation) at ExxonMobil
  • Sarah Vega, vice president of IT & Change at SmartestEnergy
  • Ricky Burns, business transformation team lead at BP
  • Jose Beceiro, senior director of Global Energy 2.0 at the Greater Houston Partnership

The event is on Tuesday, March 2, at 9:30 am. It's free and can be accessed online. Click here to register.

March 2 — Ladies Who LaUNCH #13: The Female Superpower

In 2020, 40 percent of US businesses were owned by women and generated $1.8 trillion. With these numbers in mind, it comes as no surprise that the presence of women in entrepreneurship and investing is growing.

Why do women-led companies financially outperform their male counterparts? And what are the "female superpowers" behind our ability to excel in these fields? Join featured speaker, Megan Bent, as she explores the research, data, and her own experience in the importance of female leadership in entrepreneurship and investing, and how to leverage your differences to your advantage.

The event is on Tuesday, March 2, at noon. It's free and can be accessed online. Click here to register.

March 3 — What's Next in Crypto?

Baker Botts and TeamBlockchain are hosting a webinar discussing trends in cryptocurrency. Key speakers from the sector include:

  • Ali Dhanani, partner at Baker Botts
  • Sarah Beaumont, associate at Baker Botts
  • Jonny Fry, co-founder & CEO at TeamBlockchain Ltd
  • Spencer Randall, principal & co-founder at CryptoEQ
  • Ankush Jain, chief investment officer at Aaro Capital

The event is on Wednesday, March 3, at 11 am. It's free and can be accessed online. Click here to register.

March 9 — Investing in Medical Devices

Join the Texas HALO Fund for a conversation with three of the fund's portfolio companies: Adient Medical, Allotrope Medical, and PathEx.

The event is on Tuesday, March 9, at noon. It's free and can be accessed online. Click here to register.

March 10 — Open Project Night: Achieving Gender Equality in Houston and Beyond

Impact Hub Houston is bringing you a monthly opportunity to come together to work on solutions for some of Houston's most pressing issues. Our city is full of changemakers across all ages, cultures, skillsets, and industries. This is your chance to conned and collaborate for the greater good.

The event is on Wednesday, March 10, at 5 pm. It's free and can be accessed online. Click here to register.

March 10 — Conversations with Latinx Entrepreneurs in Houston

Latinx entrepreneurs are starting small businesses faster than the rest of the startup population and becoming a bigger part of the total U.S. market every day. Join General Assembly for a panel of Houston Latinx leaders as they share stories about their heritage, failures and success.

The event is on Wednesday, March 10, at 6 pm. It's free and can be accessed online. Click here to register.

March 11 — How to Sell Without Being "Salesy"

In celebration of Women's History Month, Catherine Brown and Leela Madan, both serial entrepreneurs and founders of Houston-based Founder's Compass offer their advice on selling your business.

The event is on Thursday, March 11, at 10 am. It's $30 and can be accessed online. Click here to register.

March 11 — Inspire Seminar with Leslie Wise

Join Enventure for a talk and Q&A with the president and principal consultant of Evidence Matters, Leslie Wise. Inspire is one part of Lilie's three-program career exploration series. The goal of Inspire is to share an individual's career journey so that trainees can see one of the many paths that can be taken, learn about the reality of working in these fields, and gain valuable advice from key leaders to better prepare themselves for their own career journey.

The event is on Thursday, March 11, at noon. It's free and can be accessed online. Click here to register.

March 16-20 — SXSW

Another conference is pivoting to virtual attendance this year. SXSW has flipped the switch to being online only for 2021. SXSW's seven conference themes are A New Urgency; Challenging Tech's Path Forward; Cultural Resilience in the Arts; The Rebirth of Business; Transforming the Entertainment Landscape; Connection in Disconnection; and An Uncharted Future. Stay tuned to InnovationMap for a Houston innovator's guide to the conference.

The conference takes place Tuesday, March 16, to Saturday, March 20. Click here to register.

March 17 — Top Legal Considerations for Startups

Join Rice University's Liu Idea Lab for Innovation and Entrepreneurship for a session with corporate and securities lawyer Aaron Barker, who specializes in advising companies from formation to exit, will give you the inside knowledge to help you launch your venture, and possibly save you from making a rookie mistake.

The event is on Wednesday, March 17, at 4 pm. It's free and can be accessed online. Click here to register.

March 24 — Houston Startup Showcase

The Houston Startup Showcase is a flagship event from The Ion, formerly known as Demo Day. This event will allow for developing companies to receive feedback from subject matter experts and showcase their successes thus far. The event is a year-long series of monthly pitch competitions, and results in a final winner to close the series in November. Companies are encouraged to apply online to pitch.

The event is on Wednesday, March 24, at 6 pm. It's free and can be accessed online. Click here to register.

Trending News