Industry trends are patterns in price, cost, consumer buying, marketing, manufacturing, and sales methodology that occur over time. Analyzing trends can help companies make decisions about allocating funds and labor, stay competitive, and adapt to changes influenced by factors such as government legislation and public demand.
Industry trends are patterns or trends that occur within a specific industry. These trends can be in price, cost, consumer buying, marketing, manufacturing, sales methodology, or any other area. Trends occur in every industry and can provide companies with important data to help them stay competitive in the marketplace.
While industry trends can move quite quickly and change frequently, the term is usually used to describe industry activity over time rather than sudden, brief divergences from the norm. For example, if the consumer buying pattern of a particular item has increased by about two percent for each of the past five years, an analyst might say that this industry is showing a slight growth trend. If, on the other hand, sales of the item were relatively flat for the first two years, saw a sharp increase in the third year, and then returned to previous levels for the next two years, no trend is apparent. Instead, the spike in sales would likely be considered an anomaly.
Analyzing industry trends can be invaluable to manufacturers and retailers. Understanding how consumers buy products can help companies make decisions about allocating funds and labor. For example, if a manufacturer of scrapbooking embellishments finds that online sales of craft products have increased dramatically while in-store sales are declining dramatically, the company may want to focus its advertising efforts on web-based ads rather than on in-store displays. .
Observing industry trends can also help companies stay competitive. For example, several years ago, video rental stores in the United States began phasing out VCR tapes in favor of DVDs. The industry trend was towards new media. Stores in this industry had to make a decision: could they follow the trend and continue to compete for the business of consumers wanting to rent DVDs, or could they fight the trend and position themselves as one of the few places where consumers could continue to access tapes of the video recorder.
Industry trends can be influenced by a number of factors. For example, a trend towards higher safety standards in automobiles could be related to government legislation. Similarly, a trend towards shorter hemlines in women’s fashion may be a result of the popularity of a celebrity who is known for wearing short skirts. Furthermore, a trend towards the use of sustainable materials in a manufacturing sector can be the result of both public demand and a decrease in the availability or affordability of unsustainable materials.
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