Industry trends may suggest you’re in need a of a business pivot. These tips can help you identify the signs that signal a change is necessary.
JUNE 12, 2017
Pottery Barn recently experienced a sales slum that led the company to pinpoint the problem. Turns out their once well-selling large furniture pieces didn’t fit in the tighter living spaces of tiny millennial apartments. Following that revelation, the company made a business pivot and introduced smaller furniture pieces.
Similarly, Staples, in response to shrinking retail sales, recently pivoted from its longstanding approach as a low-priced office supplier to a company that offers co-working space and supply delivery.
Whether it’s welcomed or not, successful company owners know that making a business pivot can be necessary to survival and a natural part of building a business, believes investor and serial entrepreneur Wesley Virgin.
“Business owners should anticipate trends because buying behavior is dynamic,” says Virgin. “Many conventional, brick-and-mortar businesses mistakenly believe that customer behavior won’t change and people will continue to buy like they did 10 years ago. As you can see with Pottery Barn and Staples, this is far from the truth. Business owners would be wise to pay close attention to customer buying behavior and do business pivots if they see buying behavior shift.”
“Markets and consumers constantly evolve,” says Ross Kimbarovsky, founder and CEO at crowdSPRING, a marketplace for crowdsourced logo, web and graphic design and company naming services.
—Ross Kimbarovsky, founder, crowdSPRING
“Years ago, companies like Xerox, Polaroid and Nokia lost substantial market share and revenue because they didn’t anticipate changing trends in their markets,” Kimbarovsky continues. “Today, we’re seeing some companies suffer the same fates, while others are responding to trends and thriving.”
Spotting the Trends That Require a Business Pivot
Identifying and anticipating trends your market makes may improve your chances of rallying and doing a business pivot before losing sales.
“Smart companies regularly experiment with their marketing and with product mix in order to identify and anticipate trends in their markets,” says Kimbarovsky. “Without such experiments, it’s difficult to tell the difference between trends and fads. They both look alike in the beginning, but fads are momentary, whereas trends gain power over time.”
Using these tactics can help you identify the trends that may require your company to make a pivot.
1. Collect and analyze existing information.
“Stay aware of the changes affecting the business landscape, your customers, your competitors and your brand,” says Larry Light, co-author of Six Rules for Brand Revitalization and CEO of Arcature, a marketing consulting company. “Identify changes in consumer behavior, attitudes, opinions and values.”
To collect information, you can search your industry on Google Trends, adds Virgin. “On Google Trends, you can see actual data of where your customers’ current attention is focused. Look at your competition and new companies attempting to take a share in your niche.”
2. Gain insight from your data.
“Truly understanding trends requires more than information, it calls for insight,” says Light. “Information answers what and insight helps you understand why. Informed insight is not guesswork. Insight means seeing below the surface of information. This necessitates synthesizing in addition to analyzing. Analysis looks backward, but business strategy is about looking forward.”
You know you’ve gained insight from analyzing data when you’re surprised at what you’ve learned and are motivated to change behavior based on the learning, explains Light.
“An insight is a fundamental consumer truth that has the power to open our eyes. It’s relevant, recognizable, actionable and capable of building business for the long-term and will allow you to successfully maneuver a business pivot.”
3. Ask customers to tell you their problems.
“To help anticipate trends, rather than asking people what they want, find out what troubles them,” says Light. “Many customers don’t know what they want, but they love to complain. Ask about their concerns. The problems of today are the foundation for the innovations of tomorrow.”
4. Listen.
“To understand trends, you must understand your consumers,” says Kimbarovsky. “The better you understand them, the easier it will be for you to adapt to changing trends. Listening doesn’t mean that you implement every feature requested by users or start building requested products. Listening means understanding what people are talking about and why they’re talking about these things. If you stop listening to the market, you become irrelevant.”
Virgin agrees. “Never think you know everything about your business,” he says. “Close your mouth and listen to the chatter of what’s going on in your niche. Go to conferences and seminars, and you’ll discover new innovations that you can be one of the first to capitalize on.”
5. Consider the “what ifs.”
“If you play chess, you know what this means,” says Kimbarovsky. “Every move is met with an opposing move. The best chess players can consider many moves ahead and anticipate their opponent’s moves. Smart businesses do the same, which allows them to make successful, timely business pivots.”
Read more articles on industry trends.
