Tricks for tracking trends
There’s a saying on Wall Street: “The trend is your friend until it ends.”
At its most basic level, this piece of advice says that we should run with the herd because bucking the trend is potentially risky and costly. However, it also tells us to be on the lookout for events that may change the herd’s direction.
As a business owner, I am particularly sensitive to trends. The restaurant industry is as competitive as any, and the Denver market is particularly so. Thanks to homegrown successes like Chipotle, Qdoba, Noodles & Co. and Smashburger, as well as newcomers like Pizzeria Locale, we have a very educated group of customers. Anyone who eats out is a self-proclaimed expert. As owners and operators we ignore these “expert” opinions at our own peril.
Some trends cut across all food categories. People generally look for fresh, authentic food served in a comfortable, clean setting. It’s easy to think this is how it’s always been. At Anthony’s we disagree. McDonald’s has seen sales in the U.S. decline in 2014, as people appear to be exploring new alternatives for fast food. Cookie cutter products, like Pizza Hut’s legacy menu, are dismissed as brands like Domino’s Pizza work to create a new look. The fact that Domino’s still uses production line techniques is less relevant than the fact that their products now appear to be handmade.
We wrote previously about Anthony’s rebranding efforts. Fortunately, we have not felt the need to substantially change our pizza recipe because we have always used wholesome ingredients. We do see a need to update some of our menu items, however, as the market shifts from traditional pastas to contemporary versions like butternut squash ravioli or capellini served with fresh vegetables. Similarly, we have changed our dessert menu to offer fresher, lighter alternatives to old stand-bys like tiramisu.
My point is that we need to be aware of trends, and we need to use them to our competitive advantage. Similarly, if we’re out of sync with a trend we should understand the consequences. It’s too easy to stand on tradition when the market is telling us to move on.
- Burton Snowboards is an interesting case study. Since starting the business in 1977, the company has had well over 100 different logos or brandmarks. This effort reinforces the idea that the company is not content to stand still, and is continuously exploring ways to improve performance.
- Chris Bangle, the iconoclastic designer for BMW, changed the way auto designers approach their craft. This wasn’t an easy task because automakers are notoriously slow to embrace change, given the substantial capital investment involved in making cars. The BMW board of directors was resistant, but Bangle eventually made a convincing case to move the company’s design language forward.
Sure there have been flops; that’s the risk of breaking with the herd. BMW’s design language (dubbed “flame surfacing”) was not warmly accepted when first introduced, but today most automakers have adopted it as their own. To borrow another Wall Street axiom, “being right but getting the timing wrong is still wrong.”
I’m not saying BMW was wrong – not at all. But many customers at the time were quite vocal about the company being way ahead of the curve. And there are plenty of companies that fell behind the curve: Kodak, Blockbuster, Nokia, Yahoo, Microsoft, and more. Not all are gone, but none are considered trendsetters in their industry.
The trick seems to be knowing how to position your company relative to your customers’ expectations. If you get too far ahead of the crowd, you are potentially in just as risky a position as when you are too far behind. Revenue is always the ultimate arbiter of success, but it tends to be a lagging indicator. Here are four other strategies to track real-time changes:
- Watch for new competitors, even if they’re not in your market.
- Track developments in other industries. (Some of our best ideas have come from businesses that have nothing to do with food service.)
- Network with people in and out of your industry. The tech sector coined the term “frenemies” to describe the relationship between collaborators who are also competitors. Similarly, it can be a real help to touch base with an informal group of advisors – people whose opinions you trust or value.
- Listen to your customers. With social media, we all have access to more and better feedback than ever.
Trends are constantly changing. This means that our analyzing and studying are never done. In fact, we’re probably most vulnerable right around the time we think we’ve got everything figured out.