FMCG business is an abbreviation for fast-moving consumer goods, which are sold quickly and at a relatively low price. FMCG products are typically short shelf lives due to high demand or easily damaged.
FMCG products can be the best choices for businesses with high profit. However, effective strategies must be implemented based on the product characteristics that are sold.
Get to know FMCG Products
Consumption products are products that are purchased by average consumers. This product can be divided into 3 categories,
- Durable products
- Non-durable products
FMCG is the type of non-durable products since it needs to be consumed as soon as possible and have short-term storage. Almost everyone in the world consumes FMCG products on a daily basis.
It can be purchased on a small scale that can be found in the groceries, supermarkets, product stands, and distributor stores. Despite these products generate more than half of consumers’ expenses, however, it tends to be low-involvement purchases.
Consumers rarely show-off this kind of product, they are happier to show-off durable products like cars or smartphones. FMCG can be divided into different categories, there are:
- A processed food such as instant noodles, cereal, chips.
- Fast-food is the food that is ready to be eaten.
- Beverages: mineral water, soda, juice.
- Cakes such as cookies, croissants, and pastry.
- Fresh foods, frozen foods, and dry: fruits, vegetables, nuts.
- Drugs such as pain relievers, fever reducers, and other drugs without a doctor’s recipe.
- Cleaning products: dish wash shops, window cleaner, floor cleaning.
- Cosmetics and toiletries: powder, toothpaste, soaps.
- Office supplies: pencils, pen, marker.
One of the characteristics of FMCG products is having high turnover rates. Not only a bigger market, but also it’s competitive market. Big companies in the world are competing to dominate this industry’s market.
Companies need to focus on the market effort to be able to attract customers. One of the ways is to make a unique package. No wonder those products, even though small and cheap, still have good packaging.
Tips to Deal with Challenges in FMCG
The key to success in FMCG is its velocity and accuracy. Distributing products in various locations and consumer bases can be challenging for this industry.
Regardless of having many competitors, however, thanks to a bigger market and profit, many businesses still choose to focus in this industry.
FMCG has many challenges. A company needs to have an effective strategy that can assist them in dealing with those challenges. Here are some tips in overcoming the challenges in FMCG,
Collect and analysis the report
A report is an aspect that can not be separated in the FMCG industry. People in higher positions need to understand how each distribution location performs.
Teams who work in this industry are struggling to create and compile the report due to wider distribution location. It will take a long time to do the report if performing it with normal application such as spreadsheet or even manual with pen and paper.
Companies need to improve the use of smart technology so they can make reports such as data visualization and analytics in just a short-time. Therefore, the outcomes will be easily analyzed for business decision-making.
Data-driven decision making will be more accurate and impacted in increasing business productivity.
Get comprehensive insight from the report
Generally, companies in this sector use research data from internal markets, purchasing histories, data from providers such as Nielsen. Those data are crucial, however, FMCG business needs more insight than that due to the variety of customers.
Collecting data manually might limit companies’ insight and make them struggle more than before. Companies need to combine all of existing data to gain more insights.
It will be used to support marketing strategy and proper selling. The use of technology such as big data and geospatial can assist companies to make data analysis easier.
Evaluate and predict your sales in FMCG business
The higher position in FMCG needs to create business strategies for the future. The determination of the strategy can be performed by evaluating and predicting your sales.
Applications or softwares can also assist companies in order to identify products that will be sold according to purchase histories. It will assist them to find a way to market their products based on customer purchasing patterns and optimize inventory management and warehouse.
Use the right management application
In this digital era, FMCG needs to use business intelligence applications. A good business technology system allows them to gather data and for decision making.
Companies need to adapt with quick changes as competitors are starting to use similar technologies. It is necessary for non-durable consumption industries to be up-to-date with the trends. Aside from customers, competitors can be challenges.
The changes can be dealt with by creating a transition strategy from the traditional model to the digital and innovative model.
E-commerce for FMCG Business
Today, many industries use e-commerce including FMCG. To date, categories that dominate e-commerce are products that involve customers actively.
It can be pricey, important, and personal. FMCG refers to the products that are not involving personal customers, therefore the strategy will be different from others.
A research shows that buyers for these products whether online or offline have the same motive. They are attracted to saving their time, money, and energy.
One of the best ways to get those three is to go to the store which enables us to purchase those products in just one place. Purchasing FMCG products may find and interact with each brand itself.
In the beginning, customers will choose their favorite retails where they can purchase products according to their priorities.
When the environment of online shopping gets better and fun to select products, it will make buyers spend lots of their money. It is proof for retailers and FMCG brands.
There are many features in the e-commerce platforms that can be used by customers to choose a product. Main dashboard can be a place to see best-sellers and draw their attention.
In addition, there are also categories for discount products that can attract potential buyers. E-commerce for consumption products need to consider searching features.
Many buyers use the features to find a certain product or brand. If companies implement the right strategies, then their FMCG products can compete with other sellers in e-commerce.
There will be many changes when purchasing foods in online platforms, however mainly customer behavior is still the same. To navigate FMCG products in online shopping, businesses need to discover the way to balance between time, money, and customer energy.
Online or offline, brands that make it easy for their customers to purchase will prosper. Products from FMCG can be sold online. In spite of the challenges, the market still awaits them.
Customers will purchase products more frequently through online platforms if the right e-commerce system is in place.
Determine Your Marketing Strategy with LOKASI Intelligence
As we mentioned before, companies that focus on the FMCG industry need to adapt and use today’s advanced technology for their business such as business intelligence.
One of the technologies is LOKASI Intelligence. It is a geospatial technology platform that integrates business intelligence with machine learning allowing users to visualize their data and to analyze it.
The outcome will assist businesses to determine an effective strategy to be implemented in their business. In addition, through LOKASI Intelligence, they are also able to identify a specific location and a certain radius to ensure the right distribution of a product’s target market.
Find out more about how we help businesses to grow their business by contacting firstname.lastname@example.org or Whatsapp at 087777977731.
Photo by Nothing Ahead at Pexels