Mr. Manish Aggarwal, Director, Bikano, Bikanervala Foods Pvt Ltd
There has always been stiff competition in the FMCG space in India. In the present age, CPG or consumer-packaged goods companies are facing increasing competition from retailers who have started their own private-label offerings. Also, both CPG companies and retailers are facing competition from multinational online superstores. Fighting on different fronts is leading companies to create new offerings in the face of emerging opportunities and new threats. The majority of FMCG companies have understood that the problem, as well as the solution, lies in the efficacy of their supply chain. While traditional trade remains the mainstay of the FMCG sector, consumers are quickly adopting digital mediums, leading to new strategies and formats by companies. The call for a new approach has led to a rise in demand for Omni-channel shopping experiences catering to the transforming business dynamics.
Shopping Behaviour is shifting to Omni-Channel Experience
Higher disposable incomes, easy accessibility, increasing awareness, better infrastructure, changing lifestyles, high internet penetration and digital intimacy are all contributing to the FMCG sector’s growth in the country. Having said that, with evolving tastes and disruptive trends, FMCG companies are rapidly investing in Omni-channel strategies. While most brands think that investing in Omni-channel only involves a business extension with an e-commerce wing, it is not exactly the right approach. Consumers of today are discovering new products online, inspecting them in physical stores, researching about them online, and purchasing online or at a store. An Omni-channel presence is not about disregarding physical stores to re-invent digital strategies, rather it is an approach that must provide a consistent brand experience to customers where they are and foster relationships that transcend channels. Over the coming years, players with an Omni-channel play are much likely to come stronger than players focused only on modern trade or e-commerce.
Why Omni-Channel is Valuable for the FMCG Industry
Showing Up Where Consumers Are
Unlike, the days of the past when customer journeys were relatively linear, things have changed drastically over the past few years. New products and brands are being discovered by consumers in all types of new ways – Google Ads, Facebook, Amazon, Instagram and other marketplaces. Customers can encounter any brand on their mobile, desktop or other devices. Since shoppers want their logistics to be simple and convenient, showing up where they are, makes a huge difference. A well-planned Omni-channel strategy is responsive to changing customer behaviour and puts the required operations and technology in place to meet consumers exactly where they happen to be.
Stand-Out amongst the Competition
As already mentioned, the FMCG industry in India is a highly competitive one and to stand out amongst the crowd, brands required to provide an enhanced shopping experience and exceptional service. However, to achieve that, it is important to understand and adapt to the new behaviours and needs as well as recalibrate the target audiences’ understanding. What might have worked previously may require some changes. Using analytics and data, brands need to rethink about:
· Sales channels
· Product assortment
· Advertising channels
Using analytics it can be determined which of the channels are highly efficient, profitable, and/or acquires new customers. Then, focus can be re-shifted on those channels to ensure the best possible shopping experience.
In a decentralized network involving several nodes, it is vital for companies to put the right inventory in the right place and at the right time. Without this functionality, companies are always at risk of stock-outs and disappointed consumers. An integrated, comprehensive Omni-channel strategy allows brands to get centralized data from all the sources and channels so as to determine the ideal ways to balance inventory, meet consumers where they are and also offer enhanced service, wherever they shop. When combined with an efficient distributed order-management system, such systems can propel brands towards more sales, lower costs, and better service.
For FMCG companies, Omni-channel isn’t just one thing, but many. An Omni-channel strategy for a business has to be comprehensive and holistic. It largely depends on a solid foundation that is supported by the 4 pillars - sales channels, advertising and marketing, operations, and shipping and fulfillment.