Trend spotters shun over-crunched numbers; they watch what people do

``If you want to know what people are doing, don't listen to the experts,'' suggests trend-predictor Carol Coleman. ``They're great for telling you the past, but they don't tell you anything about the future.'' A principal at Inferential Focus, a Madison Avenue research firm, Ms. Coleman says the future is always preceded by subtle social and political changes, changes the experts rarely see. The firm's goal is to identify opportunities before they can be proven by statistical measurements.

Take walking, for example. Reaching across her desk piled high with reading material, Coleman pulls out a copy of Walking Magazine.

Last year, she explains, Inferential Focus partner Charles Hess noticed consumers were buying jogging suits in larger sizes. His conclusion: People were moving off the fast track, trying to slow down. Based on this lead, Converse Inc. began making a walking shoe in time to cash in on a hot trend.

To sniff out anomalies, says Jeffrey Brown, a third partner, he and his fellow pattern-watchers hang out in ``left field,'' absorbing information from more than 200 newspapers and magazines, as specialized as Plastics Technology and as broad as Middle East. They then meet frequently with their clients, and shower them with weekly and quarterly reports, detailing what they find.

Converse is one of 50 clients, including a mixture of money managers and consumer product firms, that find Inferential Focus's services worth the $24,000 annual fee.

`Me-too' products always late

``A company that can detect change in its early stages will greatly benefit,'' Coleman reasons. ``If you are late, and and you're a `me-too' product, you're going to spend twice as much because you've got to catch up with those already there.''

A handful of similar trend-watchers - BrainReserve and the Naisbitt Group in New York, and SRI International in California, for example - have used this approach to spot major trends often a year or two beforehand.

Many analysts spend a lot of time ``analyzing things as they currently exist,'' remarks one longtime Inferential Focus client, Steven Poling. A former analyst himself, and now executive vice-president of the AMEV Growth Fund, Mr. Poling says he has used Inferential Focus's perspective since it was spun off from Williams Inference Service more than a decade ago.

``They give us an improved corporate strategic thinking,'' says Charles Watts, director at Beneficial Corporation, a subscriber in Wilmington, Del. ``They're not preoccupied with the next quarter's bottom line, or with separate phenomenon.''

The Naisbitt Group, a New York competitor founded by ``Megatrends'' author John Naisbitt, uses a slightly different research method but a similar approach.

``Content analysis acts as a weather vane,'' notes Marilyn Block, Naisbitt's executive vice-president. Discovering trends, she says, is a ``bottom-up phenomenon,'' which means starting with the people at the bottom and working up to the whole picture.

Some people start at the newsstand. BrainReserve's Faith Popcorn claims a combination of consumer surveys and People Magazine has given her a 95 percent accuracy record.

The common thread for all of these researchers seems to involve shunning over-crunched numbers and what people say they are doing, and looking at what is actually happening.

Many analysts are simply too close to their fields, Poling says. ``A retail analyst knows the retail business, and a steel analyst knows the steel business, and they stay within their own industry.''

Inferential Focus's $1 million intelligence-gathering operation has not always had such a positive reception.

When its founder, Bennett Goodspeed, began marketing his approach to prospective clients, he encountered the attitude that ``if something cannot be measured or counted, it will not be believed,'' he writes in his book, ``The Tao Jones Averages.''

Connecting an array of random and separate events to come up with something concrete for clients can happen at any time. Coleman describes how watching television triggered a series of ideas and accurate predictions about the video and TV industry.

A couple of years ago, she says, the company noticed that a lot of companies, such as Pepsico, Hanes, and Nike, were using silent TV ads. Putting this together with high sales of remote-control TV sets, a rise in public TV viewership, and the video cassette recorder boom, they decided advertisers were on the defensive because people were switching to programs without ads, or zooming past ads on their VCRs.

And when the people meters entered the scene with their ratings reports, that threw everything in a cocked hat for Coleman, Hess, and the rest.

They have on occasion thrown clues into the wrong hat, however.

``We thought that Japan was going to be a big exporter of coal, because the Japanese authorities were spending a lot of money on their coal exports,'' Coleman explains.

Neither this, nor a prediction that Americans would reject cellular telephones, occurred.

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