Prediction as a practice may have famously got its start in the 7th Century BC, when the oracle of Delphi, in consultation with the Greek god Apollo, would look to the future to provide guidance ranging from when to plant crops to whether or not to wage war.
Today, the practice of predicting the future has come a long way from ancient Greece. Magic and spiritual consultation has been replaced with statistical models and data. Mathematicians and data experts are applying methods such as regression analysis, decision trees and neural networks to calculate probable future events and behaviour across consumer, social and scientific spheres. Given the amount of interest and investment being put into prediction, our hunger to know the future clearly hasn’t waned.
With respect to business, our obsession with prediction makes sense. In today’s constantly accelerating hyper-competitive environment it’s never been more crucial to be the first mover. Consider the competitive world of consumer products. Between 2013 and 2018, $20B in sales was lost by large and midsize U.S. CPGs to small and private-label brands. These small, nimble challengers proved adept at identifying and capitalizing on new and emerging consumer trends and being first to market with innovative new products.
Put simply, in the business world those who can best predict the future will win. But where to start? Social data and social prediction may hold the key.
Twitter is often thought of as the place where news breaks first, where the news gets its news. And while that’s absolutely correct, what is less appreciated about Twitter is that it’s also the place to see and understand the trends that are shaping society. We’ve always thought of it as the world’s largest focus group, where people share their experiences on anything and everything. And while some of these insights might be quite mundane, in the aggregate they allow us to understand human behaviours, moods and mindsets. They reveal taste preferences, friction and frustration with products or services and desires for unarticulated needs.
And when you combine 14 years of these insights (Twitter’s age) with predictive modelling techniques, you can turn trendspotting from an ad-hoc and subjective art form into a more systematic, data-driven capability. Used and applied correctly it changes your company’s consumer intelligence competency from a focus on what’s happened, to what’s going to happen and how do we take advantage?
This is an emerging space to be sure, but we’re already seeing some impressive results. Take Black Swan, for example, a data science and technology company specializing in social prediction. Using Natural Language Processing technology, they’ve built data sets based on social media conversations surrounding specific product categories. These datasets allow them to identify, size and forecast the future importance of every topic of conversation that’s being talked about by consumers; from macro-level drivers like sustainability to specific trend manifestations like a trending ingredient. For example, Black Swan says they can predict how popular Bakuchiol – the plant-based vegan alternative to retinol – will be in 6,12, or 18 months’ time versus other trendy ingredients in the skincare category.
According to Black Swan, their clients such as PepsiCo and other global brands are using these trend predictions to improve the velocity and throughput of their innovation programs, accelerating time to market while also helping to prioritize their corporate development and acquisition efforts. A great example is PepsiCo’s Global Insights team, who have been using Black Swan’s social prediction software to fast-track their new product ideation process. As new concepts and ideas are conceived in a workshop environment they are instantly validated against the latest trend data and predictions in an iterative process. The result: several new product concepts for their snacking portfolio were optimised and validated in just four hours, a process that traditionally took them at least four weeks!
When it comes to tapping into emerging trends and accelerating innovation, it’s easy to see how prediction can be a game-changer.
Need a resolution for 2020? Why not put aside oracles and crystal balls for good and look to Twitter for inspiration? I predict it will be the best decision you make all year.