The Power of Trends
The #1 annoying comment I have heard constantly over the last 40 years is…
“But this is what I did last year”
Last year is in the history books. The decisions you made, the conditions you were subject to, have changed. Not all history is to be discarded, but not all history is relevant. And it is also true that not all things change. Quality, your value proposition, business challenges, and someone who loves you, will always have loved you.
The Stanley Cup, for example (not the hockey trophy) but the company that started in 1913 making vessels for blue collar workers and outdoorsmen, is an example of a trend on steroids.
From 2019, their revenue increased to 750 million dollars in 2023.
The reason?
They caught a trend. The Stanley Cup Tumblers started according to a New York Times article in 2022 with a mom focused product recommendation blog. Thanks to social media, it erupted.
They started doing collaborations with Target and Starbucks. A $50 Stanley/Starbucks Quencher sells on Ebay from $127.50 to $10,000. I checked ebay on January 23, 2023 and the results speak for themselves…
The Stanley tumbler and Beenie babies phenomena are extreme. They do prove a point that trends make a difference. And you ride a trend until it is over.
One of the reasons Management One plans by classifications is that it is easier to identify a trend. Sometimes trends are confusing.
For example Q4 of 2023 saw a huge increase in the footwear category, clogs. Overall the results were a 60% increase in sales over the previous year for the 4th quarter. It is also true it was driven significantly by one vendor. However digging deeper, other vendors also performed, so even though one vendor may have created the trend, others copy. It may be better to have the creator, but in their absence substitutes still qualify.
Good planning accommodates and predicts how trends will impact future business. Fancy LS wovens in Menswear in 2005 erupted into a huge business that continues today. Early adopters stole market share. The explosion in 2010 of dresses in Women’s continues today and I know some of the early adopters have since built significantly on the base of that business. Many retailers including non footwear retailers that took a chance with ON, and in plush look at the strength of Jellycats. These became trends that helped the classification they were in. For retailers that could not get ON, they often were able to get Hoka, and that line also erupted. Sometimes these vendors become such category killers they need to be planned separately so the rest of the classification can get some oxygen.
How a trend is growing or receding is important.Investing in a growing trend results in potential revenue growth. If you bought last year, even if you add 10%, you could miss a lot of extra business. There is no limit on how a classification can grow as demand grows early in its curve, it can be a hockey stick or a number of different curves.
Trends do come in various shapes and sizes. I have often discussed the importance of being an early adopter. In the second half of his book, “Start with Why” by Simon Sinek, he provides a very convincing case for getting involved early.
One of the five key attributes to demand is reading customer preferences. Analyzing trends in your planning, by collecting your customer votes and then turning those into accurate forecasts is a valuable component of what Management One provides to retailers. Given big data it is even more significant.
So looking at history does tell a story but the future for those who want to grow lies in understanding their trends.
If you have any questions feel free to contact your M1 Retail Expert, or support@management-one.com and we are happy to provide you with assistance.
Onwards and Upwards,
Marc Weiss
Co-Founder - Management One
