Trend forecasting or trend spotting as it is known in the business is a branch of economics that deals with the forecasted future direction of a market, its product, and/or its price. In this branch of economics, what is called a “trend” is a data set consisting of past price data for a given period. As price data is studied over time, the analysts come to the conclusion of what the price of a product will be in the future.
In fashion forecasting, these same analysts also try to predict which fashions will be popular during a time period and in which countries they will be popular. They use all of this information to create “trends”, which are then used to make predictions about what will be the next big thing in fashion. This can be used by fashion houses, especially those who specialize in particular areas of fashion, to better choose and plan their campaigns. For instance, if a fashion house specializes in plus size clothing, and they see a trend developing for plus sized clothing, they may want to diversify their budget by targeting that market directly instead of trying to promote the “cheap” plus sizes in traditional fashion magazines.
Another use of trend forecasting is in business. A company that is planning to open a new business, or expand an existing one, must know what the future trends in that industry will be. This allows them to plan for success by laying out strategies for how to increase revenues while spending less on marketing. By predicting what will be popular in the future, the forecasting process becomes very valuable to the company. It not only gives them ideas for marketing campaigns, it may even help them save costs on advertising and allow them to focus their funds on things that will actually profit from them.