The FMCG market is constantly evolving and becoming increasingly fast-paced in order to keep up with the ever-altering preferences of the modern consumer.
The FMCG market is constantly evolving and becoming increasingly fast-paced in order to keep up with the ever-altering preferences of the modern consumer. Companies are consistently adapting and effectively re-inventing the wheel to expand, or preserve, market shares in the dynamic FMCG landscape.
Recently, trends have been influenced by the greater accessibility of information online. Consumers are now becoming more health and environmentally conscious, which have been working in conjunction with the explosion of multiple shopping channels and e-Commerce platforms. For instance, a renowned Beauty giant, and a client of mine, has shared that they have begun projects to utilise digitisation and the Internet of Things (IoT) to reshape consumer decision journeys.
Ideally, this will help to capture and predict trends of the next most popular item – for instance the most popular shade of a makeup item – which will help them lead the charge, rather than waiting for a product to become popular and then playing catch-up with supply and demand of the Supply Chain. The company has also embarked on a journey to integrate Data Science and Forensics into their Demand Forecasting, which is currently in the pilot phase and has become a theme within finding future hires across the Supply Chain.
Millennials are also quickly becoming the decision makers within FMCG. With the rapid rise in digitalisation and available information, more and more of this generation of consumers are using online methods to research and purchase. The option to review and find out information from the comfort of your own home, as well as having the product delivered, will mean that FMCG companies will need to look towards more modern methods of marketing and re-branding.
Other companies have also attempted to diversify their portfolio, as shared by a study by McKinsey & Company. Brands that are perceived to be “mass” or “big” corporations are reported to be less preferred by Millennials, for example. Smaller brands are thought to be more innovative and brands that are tailored for their specific needs are preferred, rather than mainstream offerings.
As a result, venture capitalists have been focusing on the smaller companies, which has encouraged investment of US$9.8 billion in venture funding for around 4,000 small companies over the last 10 years, according to the report by McKinsey. Approximately 73.5% of this has occurred in the last four years alone.
Within FMCG, other businesses have started to adopt a “look internally” approach – one client who is a household name in the Consumer Goods industry decided to work on their branding strategy to revamp their current brand name. It is now a mandatory process for any recruitment firm partnering with the company to join them on a 3 hour presentation and a tour of their office(s).
Another client in the Retail sector has also adopted a similar strategy to strengthen their brand name in the market – partners and vendors representing them must be familiar with their company’s history and values, before being put through a test to ensure that the company is being correctly represented.
The FMCG marketplace has since become even more vibrant, however as a consequence, it is becoming more challenging for companies who have found it difficult to adapt and keep up with the rapid innovation. Organisations must therefore take into account their current situation and be open-minded in their approach to constantly re-invent themselves. In doing so, they can avoid becoming obsolete in such a dynamic market. Having an agile model with controlled urgency will be a step in the right direction to ensuring that this is not the case.