Today, we are experiencing a huge transformation due to globalisation and digitalisation. These changes are starting to shift specific customer needs and requirements, especially for the mass market and distribution sector. Here at Talented Recruitment Group, we decided to delve into the strategic challenges for the FMCG industry, whilst discussing different approaches you can take.
What is FMCG?
Fast-moving consumer goods, otherwise known as FMCG, are products that often sell quickly at a relatively low cost. These products typically have a higher consumer demand that shortens their shelf life, along with being highly perishable and have a high turnover.
FMCG brands often account for a large part of consumer spending - even though they're considered as low-involvement purchases. Most product categories include the following:
Cosmetics and toiletries
Cleaning products
Processed foods
Dry goods, frozen foods, and fresh foods
Beverages
Ready-to-eat meals
Baked goods
What makes a successful FMCG brand?
The extremely high turnover rate of FMCG brands makes the sector extremely competitive. Top FMCG industry players are typically innovative in their retail approach, which is why brands need to understand their target market to deliver products that meet the market demand - shifting from mass marketing and having a personalised marketing campaign can make a big difference for a successful brand.
Competitive FMCG companies will also have unparalleled customer loyalty. By creating a distinctive and enticing brand identity, this will help to boost client trust. Social media presence, customer service and product packaging, all give a glimpse of a company's brand identity.
The successful FMCG brands are also able to tell compelling stories. By having the right packaging design and visual storytelling, FMCG companies can share their own brand identity at just a glance - appealing to a more extensive client base. You can also include personal stories that help to build and retain long lasting relationships with your consumers.
FMCG companies can also gain success depending on how they respond to changing industry trends. Below are some of the challenges and approaches that brands could take to remain in the competitive market.
The Challenges & Approach.
Innovation - FMCG brands should decide to focus on either their product or delivery format. Consumers will normally look for products that have added value and won't have any issues about moving to your competitors if you don't offer value. Having the right strategies will provide you with an easier time generating value for your clients.
Marketing - Since marketing goals for the most part have remained unchanged, ways to achieve these goals change constantly to match the markets demand.
FMCG brands should understand their individual client's journeys to find brand new ways and opportunities to connect with them. A great way to do this could involve developing, incentivising, and differentiating your various marketing streams - you don't have to cover all channels, just work on leveraging those that you excel at.
Engagement across channels - Most consumers like to carry out their own product research before completing their online orders - these solutions provide them with unmatched convenience and safety. FMCG companies need to respond to these changes in the market so that they remain relevant.
Podcasts and voice assistants have proven to deliver an extremely viable advertising channel for brands. Businesses can use this to guide their client's research process - you can also boost your chances of generating brand recall.
FMCG brands can respond positively to the shift towards digital channels by having a robust IT infrastructure. The other alternative is an enhanced ERP integration, this will prove decisive in boosting sales.
Globalisation - For any FMCG company that's keen on gaining more traction in the industry, exports are extremely important. Companies that are looking to leverage the global market need to understand the dynamics of internationalisation - this market share can go beyond the simple product exportation.
Ideally, you need to take time to understand and appreciate how consumers behave in their environment. Your client's taste and preferences need to also influence how you can deliver your products.
Multichannel equality - Over the last few years, FMCG companies have tried to break down their prices' sales equality and all their discounts available for various products. Although, the value chain isn't as structured as it used to be. In today's market, it requires FMCG front-runners to develop the concept of multichannel sales equality proactively.
These concepts will ensure that clients don't end up paying differently for similar products that are purchased across different platforms.
Embrace change - Over the next few years, there will still be many challenges for FMCG companies. The industry-leading brands will need to continue making radical changes to their strategies.
Any company looking to compete in the industry will need to boost its speed and enhance their accuracy. You need to have robust business strategies that can help to leverage current opportunities to remain successful in the future.
There's no doubt that we will experience more changes in the coming decades than in the entire last century, which is going to result in radical changes for the sector's leading companies. The ranking of top companies in the sector will be nothing like the ranking of the winning companies in the future. Both new players, digital companies, and those that are open and capable of undergoing a transformation, will assume positions in the new leadership of the FMCG industry across the world.
It's going to be extremely interesting to see what the future has in store for the FMCG industry, let us know your thoughts on the matter!