Why it's important to stay on top of the trends
Fall 2004
With more than 100,000 new businesses expected to start up over the next five years, competition is certain to heat up.
To maintain a competitive edge, it's essential to follow key indicators, major industry developments, and consumer trends, and then adapt your products or services in response. This requires constant vigilance and an ongoing curiosity, but the potential benefits are substantial.
Responding to change
In the early 1990s, for example, building-supply stores such as Rona and Home Depot picked up on the "cocooning" trend identified by consumer populist Faith Popcorn. They began to market themselves to homeowners who wanted a pampered environment in which to spend leisure time (a spa bathroom, a beautiful deck, a landscaped garden, a gourmet kitchen), but who wanted to do the work themselves.
What was once the Saturday-morning domain of hard-core hardware store shoppers became thronged with young urbanites and female homeowners looking to turn their houses into designer homes. And as this trend grew, other businesses were touched - paint manufacturers, publishing houses, television networks.
A more recent trend is the popularity in the U.S. of low-carbohydrate diets, which has seen large numbers of U.S. consumers attempting to cut back on items like soft drinks, beer, bread, pasta, cookies, and candy.
While the U.S. baking industry is estimating a 5% decline in overall sales, businesses that picked up on the trend introduced products ranging from low-carb candy bars to low-carb beer. According to some market researchers, the trend may be on the decline, but in the meantime, even fast-food chains are profiting from adding low-carb items to their menus to hold on to their customer base, and attract new customers who would otherwise not consume fast-food products.
Keeping an eye on the weather
Recognizing when shifts are beginning to occur is critical, as is distinguishing passing fads from true sea changes. Not every novelty becomes a lasting trend (think of the Beta-VHS battle). To support a qualitative evaluation, look for a supporting infrastructure - demographic, technological, or supply-demand.
Our aging population, for example, is a burgeoning statistical demographic trend (seniors are the fastest-growing population group in Canada) that will affect every aspect of our lives and our businesses. This shift will tip the scale in favour of certain types of businesses, change the modus operandi of others, and create brand-new opportunities in the marketplace.
Businesses that anticipate and prepare for change will be in the best position to benefit from it, as will those that keep an eye on their competitors to gain a more accurate picture of where they stand.
Feel free to review your ideas with your CIBC business advisor.
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