Market Trend Analysis: A Simple Step-by-Step Guide

Companies like MySpace, Vine, Blockbuster, and Borders went out of business because they missed emerging trends, and newer competitors quickly overran them.

In contrast, disruptive startup companies like Twitch, BetterHelp, and Airbnb accurately identified new market trends and capitalized on them.

So what variable separated the unicorn companies from those that went out of business?

Market trend analysis.

It sounds like a fancy term, but it’s really just a process to help you discover new industry trends and then decide which ones are important enough to invest in.

So in this simple step-by-step guide, we’ll teach you how to execute market trend analysis.

What is Market Trend Analysis?

Market trend analysis is the process businesses use to identify emerging market and consumer behavior trends to make better strategic decisions.

For example, market trend analysis can help companies decide what new features, product lines, or marketing campaigns to launch (or pivot!).

It helps businesses stay ahead of the competition and continue to offer the best solutions and customer experience possible.

To illustrate why market trend analysis is critical for business success, consider how Facebook is struggling to compete with TikTok.

In 2022, Facebook lost significant market share to TikTok mainly because it failed to keep up with consumer demands. If Facebook identified these market trends earlier and pivoted faster to implement the aspects of TikTok that users love (short, funny videos), it could have retained this market share.

Instead, millions of users have already left Facebook, and it is now struggling to keep up with TikTok.

This is just one example of how acting on market trend analysis data could have saved millions – if not billions – of dollars.

How to Conduct Market Trend Analysis

Market trend analysis is a broad topic; many people drown themselves in data and never identify the essential trends in all the noise.

So to help you extract only critical market trends, here’s a simple step-by-step market trend analysis process you can swipe.

Step 1: Identify Emerging Competitors, Products, and Industry Terms

Identifying which trends to analyze is arguably the most important task in this entire process.

If you don't identify the important emerging trends, the rest of the market trend analysis process doesn't matter.

Why?

Great analysis of a mediocre market trend still leads to a dead end.

So how can you identify emerging trends?

Most people approach the trend discovery process by:

• Reading industry publications
• Following industry influencers on social media
• Browsing free market trend reports (like GlobeNewswire or Allied Market Research)

After finding a few trends, you might put them into a spreadsheet for further analysis.

There are just two problems with this process:

1. It's time-consuming to manually search through content sources for hidden trends.
2. You'll probably miss important trends because emerging trends are emerging – so if the trends are easy to find, you probably missed the chance to capitalize on the first-mover advantage.

To solve these problems and make it easy to quickly identify under-the-radar trends, we built Exploding Topics.

The flagship feature is the Trends Database, a curated selection of 13,000 data-backed trends that our team manually vetted.

So to identify emerging competitors, industry terms, and products, simply go to the Exploding Topics dashboard (you can use the freemium version to get started) and sort by relevant category and trend status ("exploding" "regular" and "peaked"). Here's an example:

This cuts the market trend discovery process from hours to minutes – and the trends you'll find are probably much higher quality (more on that later).

After finding an interesting trend, Exploding Topics Pro users can save it to a custom Project for more in-depth analysis later.

For example, I'm analyzing trends in the pet market, so here are a couple of Projects I created to track popular products and companies:

After saving a topic in a Project, you'll be able to track the market behavior over time and execute further analysis in the next steps.

Once you've saved a few trends to Projects, step one of the market trend analysis process is complete!

So if you haven't already done so, jump into the free Exploding Topics Trends Database now, or unlock our premium trends, by signing up for Exploding Topics Pro.

Question: How do I know that the trends in Exploding Topics are high quality?

While there are other tools to find trending topics, a key differentiator that sets Exploding Topics apart is the quality of its trends. Here are three reasons why it’s a reliable trend discovery source.

1. Never miss under-the-radar trends as AI and Machine Learning search billions of web pages for you.

Trend discovery is tricky because, by definition, emerging trends haven't peaked. So most people aren't talking about them.

As a result, you'll probably miss many up-and-coming trends if your main trend discovery method is following mainstream industry publications and influencers.

Exploding Topics gets around this problem by leveraging AI and machine learning to scan billions of pages across the internet, including Amazon, Reddit, Twitter, podcasts, and other data sources.

Then, it flags the topics rising in popularity for further analysis.

So even if a trend is only gaining popularity on a few subreddits and some podcasts (which maybe aren't mainstream industry content feeds), Exploding Topics will still find it.

This way, you don't have to worry about missing out on any up-and-coming trends as Exploding Topics has searched the entire internet for you.

2. Trends are backed by real data and never selected based on an individual's (potentially biased) opinion.

Once AI flags a topic, Exploding Topics uses Google Trends historical data to view that keyword's growth over time.

This way, each trend added to the database is backed by reliable historical data.

Many other trend spotting websites use human analysts to select trends for the database. The problem with this method is that a single person’s opinion is often biased, which can skew trend suggestions.

We also find that Google Search volume data is very reliable because it gathers data from a global demographic rather than a small sample of users.

3. Each trend is manually vetted for relevancy by a human analyst.

We like using AI and machine learning to find emerging trends, and Google Trends is great for qualifying trends based on historical search data.

​​However, many trending topics, like celebrity news, movies, and other pop culture topics, don't have any real business value.

So to make sure you only see relevant trends, a human analyst manually vets each trend for business relevancy before adding it to the Trends Database.

If you don’t want to use Exploding Topics, you can always execute the trend discovery process manually.

To do so, you can follow these steps:

1. Make a list of reputable industry influencers, publications, and market report platforms.
2. Create a spreadsheet where you can add the link to the content and some notes on each trend you find.
3. Check the keyword's Google Search volume history in Google Trends to validate that it has shown sustainable growth over time.
4. Dedicate at least an hour in your weekly schedule to market trend discovery.

If you decide that's too time-consuming and unreliable, you can always just use the freemium version of Exploding Topics to complete this process in minutes.

If you upgrade to Exploding Topics Pro, you'll also have access to a selection of other features, including:

• Weekly Reports: These are sent to your inbox once per week and contain five trending companies and five trending products. This way, you can stay up to date with the latest trends even when you don't have a few minutes to browse the Trends Database.
• Meta Trends: Notice that the product "dog supplements" and "Zesty paws" are both related? They're part of a larger meta trend in the pet industry around pet health. So the Meta Trends feature identifies these broader trends for you.
  
  

So to complete step one of the market trend analysis process, jump into Exploding Topics Pro to unlock our premium trends and other market analysis features.

Step 2: Analyze Quantitative Data For Each Trend

It’s easy to scan market reports and get lost in endless data without actually learning anything useful about a trend.

So instead of collecting random data, think about collecting these specific metrics:

• Market size
• Traffic trends
• Funding trends
• Hiring trends

Let’s discuss each of these in more detail.

Market Size

A quick Google Search usually surfaces a market report from Globe Newswire or Grand View Research with market size and growth trend data. This can help you analyze a market's maturity and general growth trend.

Try to find its compound annual growth rate (CAGR) to see if the trend is peaking or still has room for growth.

Traffic Trends

If you used Exploding Topics to identify market trends, you already have traffic trend data. Otherwise, search the trend in Google Trends and view its search volume trend.

If you see steady growth like the screenshot below, there's a good chance it's a sustainable trend:

However, if there are spikes and dips in the trend, it might be a fad that will quickly die out:

Alternatively, spikes and dips indicate a seasonal trend, which means your business opportunities will need to prepare for volatile revenue.

Funding Trends

Another good sign that a market is promising is if venture capitalists are pouring money into that market. While venture capitalists aren't always correct in their predictions, they dedicate all their resources to identifying industry trends, so it's still a good benchmark.

A quick Google search of the industry will usually pull up data on VC investment history for that particular trend. For example, a quick search for "VC funding in sustainable beauty" pulled up this data from a Pitchbook blog post:

This graph is helpful because you can see the investment trend over time.

Hiring Trends

An excellent indicator of a company's true growth status is its hiring trends.

You can find this data by Googling brands associated with the trend you're researching and "hiring" or "jobs." This typically surfaces job posts on Indeed, LinkedIn, and other job sites. The company probably isn't growing if there aren't job posts.

You can also browse the specific jobs they're hiring for, giving you some competitive insights into what technologies, marketing strategies, and products they plan to invest in.

For example, Zesty Paws is clearly investing heavily in social media and other marketing roles:

Google Ads CPC

Another great way to determine if a trend is generating a strong ROI for companies is to track its CPC data.

You can use a tool like Google Keyword Planner or even a third-party SEO tool like Ahrefs or SEMrush.

If the keyword has a relatively high CPC, it's probably generating revenue for that business. For example, "business intelligence tools" has a CPC of $30.00, so it probably generates a strong ROI.

As you're looking at CPC data, keep in mind that lower-cost products will naturally have a lower CPC. For example, a dog bed likely will have a lower CPC than a business intelligence tool simply because dog beds are less expensive than business intelligence tools.

Nevertheless, CPC data is a great indicator of which keywords generate an ROI for competitors.

You can also track CPC data over a longer period of time, as that will show you if it is increasing or decreasing.

Step 3: Gather Qualitative Secondary Data Around Each Trend

While quantitative data helps you determine whether a trend has potential, qualitative data can help you understand why a trend is becoming popular and the pain points it's solving.

So here are three ways you can collect qualitative data for various trends.

Reading Customer Reviews

Customer reviews are very helpful for a few different reasons:

1. Understand more about how the product/service fits into the market: If customers articulate how the new product/service saves them time, money, or effort, there's a good chance the trend will grow.
2. Gauge general consumer enthusiasm for the new product/service: If consumers across several different brands are clearly obsessed with this new product or service, that's a good sign!
3. The target demographic and your ideal customer persona: You'll be able to pick up on consumer pain points, solution knowledge level, and demographic information just by reading reviews.

So, where can you find reviews?

If you're searching for eCommerce trends, start on Amazon. If you're searching for B2B trends, you can use Capterra or G2 to read reviews.

Now that you have access to many reviews, what kind of data should you extract from them?

Here are a few key things to look for:

• What specific pain points does the product/service solve?
• How did consumers solve the pain point before this product/service existed and what alternatives did they use?
• What are common customer complaints with the current products/services available?
• The general sentiment around this trend – what kind of tone do they use when reviewing the product?

Reviews are important because they help you understand why customers are obsessed with a particular trend.

For example, "bamboo baby clothes" is an exploding topic, and plenty of quantitative data supports this.

However, the qualitative data you gather from reviews shows why bamboo baby clothes are a promising trend.

Reading reviews, you can see that a common pain point with baby clothes is that the fabric is stiff and doesn't stretch – especially after air drying. This isn't an issue with bamboo baby clothes.

Other reviewers purchased bamboo baby clothes to solve eczema problems and confirm that it was effective.

So now we can understand why bamboo baby clothes are popular, which is another positive sign that this trend has long-term growth potential.

You can also extract valuable customer demographic insights from reviews like:

• B2C customer persona (age, gender, knowledge level of the pain point, etc.)
• B2B customer persona (position, company size, budget, etc.)
• Parallel interests
• Goals/ambitions
• How they enjoy spending time
• Activities they don't enjoy

All of this information will be useful in informing future marketing efforts, like how to position marketing messages and where to advertise online.

Read Industry Forums

Another great way to uncover similar insights is reading industry forums online.

If you don't know where to start, search the trend on Quora or Reddit.

For example, there's an entire subreddit dedicated to bamboo baby clothing with over 100 active members:

This subreddit alone is everything you need to track the current market for bamboo baby clothing, as it discusses what people like and dislike about the major brands in the space.

You can also join these discussions and get members' feedback on new product ideas.

You can also use a paid tool like SparkToro to type in the trend keyword and see what kinds of websites people searching that keyword frequently visit:

Social Listening

Finally, you can gather plenty of qualitative data and competitive insights by simply listening to what customers say on social media.

For example, you can use a social listening tool like Brand24 or Awario to track competitor brand mentions on social media. Most social listening tools also offer sentiment analysis, which can help you understand how potential customers feel about a particular trend.

Here’s the sentiment analysis trend from Awario of Starbucks:

If you notice that most people have a negative outlook on the majority of the top brands in the space, that's a negative sign that the trend you're tracking might not be short-term and on its way out.

Step 4: Conduct Primary Research and Talk to Your Target Market

Many startups that fail to succeed have one thing in common – they never actually talk to their potential customers before launching a product.

So while all of the secondary market research we did above is great for narrowing down the market trends you're considering, it's important to do primary research (talk to your customers) before launching a product or service.

There are two main methods to execute primary research:

• Survey potential customer
• Interview potential customers

Here's how you can do both of these steps.

Surveying Potential Customers

If you already have an audience and want to get a pulse on how they feel about a particular trend, you can send a survey to your existing email list.

However, if you don't have an audience in the market you're analyzing, there are plenty of survey tools like SurveyMonkey and Pollfish that can run your survey to a particular audience.

For example, if you're analyzing the bamboo baby clothing market, you could use one of those survey tools to run a survey to an audience of parents with children under the age of four. To get even more specific, you could add a screening question like "Have you ever bought bamboo baby clothing?"

Pricing usually starts at about $1 per response, so it's relatively cost-effective.

Interviewing Customers

Finally, the best way to gain a competitive advantage is to talk with customers one-on-one, as live conversations usually reveal golden insights often missed with other market research methods.

This is because interviews are the only form of market trend research that allows you to ask follow-up questions to get to the root of any pain point.

For example, if you're marketing bamboo baby clothing, you might discover on customer research calls that most users received it as a gift from friends or parents.

In that case, it would completely change who the target market is (shifting from new parents to caring friends/family), ultimately impacting the marketing messaging.

To conduct customer interviews, you can use a tool like Discuss.io, which records the customer research calls, creates auto-generated clips based on keywords (like "gifts"), and even provides sentiment analysis.

If you're doing B2B customer research, you can find people to interview through a service like Respondent.

Step 5: Create a Beta Offer Around That Trend

By now, you've thoroughly analyzed the market trend from a data perspective. Still, the only way to assess whether or not this trend is worth investing in is to see if customers will buy it.

So create a beta offer and see if people buy it.

Most companies make the mistake of developing a product or service before selling it, only to discover that it's not quite the solution their target demographic actually wants.

To prevent you from making this costly error, create a landing page advertising the offer and see if you can get people to pay real money for the product.

For example, Ocho Wealth is a platform that launched in 2022 and allows solopreneurs to create solo 401ks. Before launching, they created a landing page to see if enough business owners would sign up for it:

The founder only started building the product after enough people joined.

Even if you're planning to launch an ecommerce product, you can still create a landing page and offer pre-orders before building the product.

If people purchase the product, you can create it and send it to that initial beta group.

If your target audience doesn't buy, you just saved yourself from spending thousands, if not millions of dollars on a market trend that doesn't resonate with your audience.

Start The Market Trend Analysis Process Today

A key difference between unicorn companies and legacy companies overtaken by unicorns is their ability to accurately identify, analyze, and swiftly take action on the right market trends.

However, many companies fail to identify the right trends early enough.

So to help you solve this problem, we built Exploding Topics.

It executes the trend discovery process for you by analyzing billions of webpages and extracting the most promising trends. Then, a human analyst manually vets each topic for relevancy before adding it to the Trends Database.

By using the Trends Database, you can find relevant emerging trends in a matter of seconds rather than spending hours reading industry publications, scrolling Twitter, and combing other data sources for potential trends.

To see for yourself how Exploding Topics can speed up the market trend analysis process, you can try out the free Trends Database today! Or, if you want to unlock premium trends and other more advanced market trend analysis features, you can jump right into Exploding Topics Pro.