Machine learning and data review is needed. In the past, businesses didn’t have to count on the vast amount of data we have today, so it was relatively easier to predict business trends. Today, all the attention is on the internet as we all know there is a lot of data we can get from analyzing behavior patterns online.
Traditional forecasting itself was a huge task so just imagine having to “swim” in today’s oceans of data. As the amount of data grew, businesses started to discover the need for machine learning tools to help them forecast market trends.
Early prediction of new market trends is highly beneficial to a company—it can boost revenue between 20% to 60%. This also helps them stay up-to-date with the latest market patterns and expand their business opportunities.
The importance of market trends predictions is huge, and although machine learning still requires human effort for the interpretation part, it is a tool that provides error-free results for a more accurate business decision. Here we’ll explore how machine learning can help businesses predict market trends.
What Is Machine Learning
Machines were originally built to simplify human tasks or to make room for more high-tech innovations. Over the years, the advancement in the field has allowed machines to do so much more, including adapting algorithms that enable them to learn almost in the same way humans do.
Machine learning is a data science field dealing with the process of training a machine to identify certain objects with meanings and do programmed tasks based on the experience and data that you provide to them.
The easiest example of this is the process of teaching a computer to differentiate a picture of a pizza from a picture of a cake. Statistical data will be fed to machines for processing, analyzing and organizing. Following this, the latter will be capable of identifying each of the items without human prompt or assistance. The same concept applies when it comes to forecasting market trends.
Today, we can enjoy the results of machine learning as evident in most daily-life situations such as identifying spam emails, customizing content suggestions on social media based on your preferences and location, and even performing medical diagnosis.
It is such a powerful technology that might be one of the leading tools we’ll use in the future. One particular aspect of the field that draws global attention, especially from the business community, is the ability to use machine learning, Artificial Intelligence and Big Data to predict upcoming trends.
How Machine Learning Predicts New Market Trends
When it comes to machine learning data prediction, the computer utilizes that data you provided to identify patterns and therefore forecast possible situations. There is a crucial factor here and it’s called “historical data”. We must see previous and current trends to statistically predict what the future trend will be, which is what data scientists call “predictive data”.
There are a lot of talented data scientists out there who would probably do an excellent job at doing predictive statistics. However, even they can benefit from developing skills in machine learning for two reasons: speed and reduced human errors. Even the most talented minds have flaws and just a slight difference in numerical digit could ruin the entire operation.
That’s why machine learning is a great tool for predictions—it’s factual and accurate. It also speeds up the whole process of data analytics. The time that would take a human to gather and analyze the data would be reduced ten times if we utilize machine learning.
While we, as humans, might struggle with identifying trends, machines don’t have the same problem. With specific algorithms, computers will be able to quickly forecast them. It’s almost like having 1,000 pairs of eyes to look at and analyze the same set of historical data and draw predictions of what the majority of people will likely prefer.
This way, businesses are able to identify new trends easily and make wise business decisions to create efficient workflow. The earlier you discover business trends, the faster you’ll be able to conduct initiatives and game plans that can rake in success for your business.
There are many people trying to figure out a way to predict business market trends, especially in the stock market. For years, people have created statistical techniques that would somehow help them discover the likelihood of new market trends.
However, it should be noted that machine learning still has a percentage of error that can derive from an incomplete or inaccurate data set. While historical data is crucial, in some cases it might not represent the reality with 100% accuracy. Regardless, machine learning is still a great tool that can eliminate the tedious process of manual predictive data.