How digital is changing FMCG

The FMCG sales environment is rapidly changing. Only brands that embrace the latest technology and data to reach their audience will succeed.

As if the ins and outs of effective marketing practices weren’t already hard to keep up with, the rise of digital has taken this challenge to the next level.

With rapid changes taking place in the FMCG landscape, it’s the boldest brands that identify new opportunities and act to overcome challenges that will survive.

The shifting environment

Over the past five to 10 years, the FMCG sales environment has shifted significantly, resulting in a variety of barriers for brands to work around.

Shelf space has reduced with physical stores carrying fewer lines. Food provision retailers have moved to add non-foods and services to sustain growth. And price has become king, with the rapid emergence and continued growth of discount retailers such as Aldi and Lidl.

Meanwhile, the modern consumer has grown more demanding than ever, thanks to the diverse range of choice on offer.

But digital offers great opportunities for progress – particularly for smaller, agile brands that have the valuable ability to adapt quickly. The key to winning more space on shelves and keeping up with the competition is to focus on creating customer demand outside the store. That calls for a fully integrated on- and offline media strategy, making customer targeting and geolocation a top priority.

In fact, brand awareness as a whole has become increasingly important in this crowded market. It’s no longer enough to have one unique selling point of differentiation. Instead, brands need a whole package that optimises appeal to their target audience.

The age of opportunity

While physical stores will remain relevant in the FMCG industry, there’s no doubt that the rise of digital means brands need to enhance their online presence with better websites (optimised for mobile) and more effective use of emails and social media through targeted initiatives. They should also look to cash in on the popularity of e-commerce and social media too.

Last year, ecommercenews.eu reported the UK spent, on average, 74.09 euros per online FMCG purchase in 2016, yet consumers spend 4.5 times more on FMCG online than they do in store. For FMCG brands to reap the benefits, it’s essential they embrace digital technology and the power of Big Data.

The power of insight

This new age of FMCG is one in which the struggle for brand awareness in emerging retail areas is real.

Just take a look at Amazon and its new brand of ‘Happy Belly’ snack products, or US start-up Brandless, selling a range of FMCG at just $3 each. But the unique insights afforded by Big Data can help brands cut through the noise with the development of innovative products, improved targeting and, ultimately, increased revenue.

An article by data analysis gurus, Data Lab, cited the example of Kim, the Maggi Chatbot, which uses AI to allow existing and potential Maggi customers to connect through Facebook Messenger. Kim offers inspiration on what to cook and how to order specific ingredients via the German supermarket chain REWR-Online. Using machine learning, the exchanges Kim has with customers become increasingly personalised, encouraging the use of Maggi branded products for their experiences in the kitchen.

By aligning digital technology with the wealth of data that drives it, Maggi have developed a creative and efficient method of optimising customer engagement, influencing the path to purchase.

The FMCG brands most likely to succeed in future are those that: embrace technology and data to better understand their customers; create more informed marketing campaigns; and create cross-platform campaigns that develop a level of frequency that’s most likely to have an impact.

Linney is committed to driving efficiencies and innovation across every marketing channel through insight, creativity, technology and delivery. Ensure your brand keeps up with the digital age – contact us today.