Macro Trends: Consumer Shifts Your Company Can’t Afford to Miss

Posted by
Kevin Koenitzer on 4/3/20 4:51 PM

There’s no company that doesn’t want to be part of the next big thing. For years, trendspotters, cool hunters, and even social media analysts have attempted to ferret out—and in some cases, create—trends.

And for good reason: Trends don’t just dictate what you see on runways or the hottest teen TV shows. Trends disrupt markets by redefining what consumers want, often in pretty permanent ways.

Identifying true trends “in the wild” is tricky business, but social media is one key sector where trends play out. Rigorous analysis of social data can help brands determine whether a buzzy new thing is likely to persist long enough to turn a profit or fade out faster than you can say “Unicorn Frappuccino, no whip.”

Is it a trend or just trending?

Before we jump into comparing the value of trending topics, fads, trends and macro trends, we need to define a few terms:

  • Trending topic - A topic (usually associated with a specific hashtag) that temporarily spikes in social media conversation volume. Peaks and disappears in hours or days.A graphic showing how social chatter ladders up to become fads, trends, and macro trends.

  • Fad - A topic that grows quickly on social media over a short period of time but that returns to previous or lower conversation volume. Often peaks and declines over the course of a few months.

  • Trend - A topic that grows quickly on social media over a short period. Trends retain relatively steady conversation volume for months or even years, though they may plateau at a new (higher) level as they move from niche to mainstream.

  • Macro trend - A trend that pervades and transforms nations, cultures, or even global markets. Macro trends persist for months or years, though they may evolve over time. Related but distinct trends feed into a single macro trend.

 

Trending topics: Virality isn’t a long-term strategy

From breaking news to brand stunts, there are plenty of reasons why social conversation volume may spike. The ability to monitor these trending topics is crucial to crisis management and customer experience, but it’s not data you should use to make long-term strategic decisions.

IHOPs "IHOb" campaign created a stir on social media, but only for a moment.

IHOP’s brief switch to “IHOb” (International House of Burgers) in June 2018 resulted in a massive spike in Twitter conversations...but only for a week. Data Source: Social Standards Market Insights - Global, Jan 2018-Mar 2020.

 

For example, IHOP’s “IHOb” campaign led to a massive uptick in conversations about the brand during the summer of 2018. While their marketing department deserves kudos for going viral and the brand’s burger sales soared immediately after the stunt, conversation volume dipped to below pre-spike levels soon afterward. That means the brand’s social team succeeded in getting a topic to trend, but the chatter didn't result in long-term lift for the company.

The real proof shows in IHOP’s attempt to revive the campaign a year later. When we look at monthly conversation volume, the initial June 2018 spike is still evident, but there’s not even a modest uptick in social conversations during summer 2019.

There are good tactical reasons for a brand to create (or leverage) trending topics. But because trending topics are so fleeting, they’re more likely to provide a short term boost than long-term transformation.

 

Fads: Attractive and volatile

While it’s easy to miss trending topics during even the shortest of social media fasts, keeping up with the latest fads is a little easier. As we’ve talked about in the past, fads are characterized by high growth in conversations over relatively short periods of time, followed by a return to initial—or lower—levels of conversation volume.

Cushion compacts looked like they could be the next big thing in Beauty, but consumer interest soon faded.

Cushion compacts may have looked like the next big thing in Beauty for a hot minute, but they haven’t retained consumers’ interest. Data Source: Social Standards Market Insights - Global, Jan 2018-Mar 2020.

 

The cushion compact—a form of cosmetics packaging designed to deliver just the right amount of liquid product—saw some interest in spring 2019, but reached its peak during the fall.

While the cushion compact exhibits a very fast spike-and-plummet, consumers sometimes embrace fads for months, making them attractive to brands looking to break new ground in the market. And that’s not necessarily a bad thing: Fads can be incredibly lucrative for companies that gauge demand well and get to market before consumer interest fizzles out.

Unfortunately, fads don’t usually fit into the business model of most CPG brands. But that doesn’t mean they have to be behind the times. Instead, brands should turn to trends to find a stable source of revenue that’s likely to last for the long term.

 

Trends: Rare but transformative

Like fads, trends have high growth rates over relatively short periods of time. The difference is that interest in trends doesn’t plummet following an initial spike, though it may taper off as the trend goes mainstream.

Cruelty free beauty is a great example of a trend that’s moved from the fringes to the mainstream. Let's start by looking at its early trajectory:

2018 saw serious growth in consumer interest around cruelty free beauty.

Consumer interest in cruelty free beauty grew significantly in 2018. Data Source: Social Standards Market Insights - Global, Feb 2018–Feb 2020.

 

A few years ago cruelty free showed strong growth in conversation volume, with consumer interest up 40% in 2018 alone. This kind of sustained attention is good news for brands looking to capitalize on consumer demand, but what happens next is equally important.

After that initial growth period, in 2019 consumer interest in cruelty free beauty peaked before beginning to settle into a new normal:

In 2019, interest in cruelty free beauty began to normalize, indicating that it's a trend.

Although cruelty free beauty peaked in early 2019, it remains a powerful driver of consumer conversations. Data Source: Social Standards Market Insights - Global, Jan 2018-Mar 2020.

 

What happened in the months after the peak makes cruelty free beauty a trend instead of a fad. Where interest in cushion compacts cratered after an initial spike, cruelty free beauty’s conversation volume normalized—that is, flattened out—confirming its continued relevance to consumers. Put another way, although consumers are long past their initial excitement about cruelty free beauty, the trend is still very much on their minds.

Given this trajectory it should come as no surprise that cruelty free has become table stakes for Beauty. The global cruelty free cosmetics market alone is estimated to reach $10 billion USD in the next four years and both brands like e.l.f. Cosmetics and retailers like Sephora are angling to take ever-larger slices of that revenue.

Longevity is what makes trends so powerful for CPG brands...and so difficult to identify. Both trends and fads exhibit rapid growth early on, with only longer term behavior differentiating the two. Thankfully, there are two key indicators of an emerging trend: Consumer retention (for more on that, check out this blog post) and the trend’s alignment with existing macro trends.

 

How to Spot a Macro Trend

Identifying macro trends is both as easy as breathing and devilishly difficult. That’s because macro trends are part of the zeitgeist. They’re so pervasive that even the average person on the street could potentially name them, but slippery enough that analyzing and taking action can be difficult.

For example, health and wellness (H&W) is a macro trend so pervasive that it’s hard to think of a consumer space that it hasn’t impacted:

Health & Wellness is a macro trend that's transforming consumer interests and the markets that serve them.

While health and wellness’s share of Food & Beverage conversations has been more volatile, it’s also higher than in other market verticals. In contrast, H&W has exhibited slow, steady, and in most cases surprisingly robust growth in Personal Care, Beauty, Apparel/Fashion, and even Beverage Alcohol over the past two years. Data Source: Social Standards Market Insights - Global, Feb 2018–Feb 2020.

 

Consumer conversations around health and wellness are up across the board in the market verticals we track. The H&W macro trend is driving the sober curious movement, interest in nanoparticles, and consumer investment in skincare as a way to promote healthy aging.

But the H&W macro trend was also related to now-passé products like skinny tea and activated charcoal in all its many applications. That’s because macro trends are made up of multiple smaller trends that grow, evolve, and fade out...even as the macro trend itself continues to flourish.

Brands looking to get in on the H&W macro trend shouldn’t back a single trend and hope they caught it on the upswing. Instead, brands need to think more strategically and align their products and positioning with macro trends that are likely to serve consumer needs and interests for the long term. That’s a win for both companies and their customers and it’s all thanks to trading in a reactive response to rising trends in favor of a more nuanced understanding of how and why they form.

 

Takeaways

It’s easy to tell when a topic is trending on social media, but it’s a lot harder to identify trends as they’re emerging. The key is to look beyond initial spikes in consumer interest to focus on how a potential trend fits into larger consumer shifts.

The specifics of a macro trend will inevitably change, but its higher level attributes tend to remain relatively stable. Companies that identify and invest in trends that ladder up to macro-level consumer movements will be well positioned to remain relevant for the long term.

 

Stay tuned for more insights into how social data can give you a deeper understanding of consumer trends. And in the meantime, join our twice-monthly newsletter to access our latest findings and resources. 

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Topics: social data, consumer, trends, market insights

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