5 FMCG Challenges Technology Can Solve Right Now

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Mar 24, 2022 • 6 min read

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The rise of e-commerce and the marketplace have changed the entire business process of the industry, including the Fast-Moving Consumer Goods (FMCG) sector.

The pandemic has accelerated the changes in consumer behavior where online shopping has become the new trend that will likely stay even the pandemic is over. 

Given these conditions, it is no exaggeration to say that technology drives FMCG's transformation. These businesses need to embrace more technology to stay in the competitive market.

McKinsey predicts that by 2022, the e-commerce market in Indonesia will reach USD 65 billion or around IDR948 trillion. That's a pretty incredible number to consider as the main reason for total digital migration.

Leverage Technology to Solve The Challenges

Then what are the FMCG challenges that can be solved if the FMCG industry increases their use of technology and carries out digital migration?

The answers can be many and varied, depending on how the company makes changes. Worry not, we've rounded up some of the common challenges every FMCG company faces, and how technology can help solve them.

1. Marketplace Disruption

Since the growth of internet access in the 1990s and the birth of Amazon's competitive business model, the retail and FMCG industries have experienced little disruption. Today, steady growth is seen in smartphones, digital payments, online banking, and app-based platforms.

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Although online sales were initially considered only ideal for purchasing entertainment products and services, FMCG companies have also started to explore marketplace platforms over time. The growth of digital access has also changed consumer behavior.

Currently, they prefer the convenience and ease of shopping online rather than spending time walking around the shop.

Solution:

Shift your marketing to the digital realm by leveraging your own social media presence, website, or app to reach a more comprehensive consumer base who prefer shopping online.

2. Increased Competition

The good news of digital presence is that you can reach a wider audience, but on the other hand, this also triggers stricter competition.

Your brand competes globally with brands from different countries and local brands on the same online platform. That way, each company competes not only on price and product but also on delivery service and better customer feedback.

Solution:

Implement a unified B2B incentive program to incentivize distributors, retailers, and other stakeholders so that they will prioritize your products over competitors.

Tada's B2B Loyalty Program can help your company create incentives with attractive and easy-to-obtain rewards to encourage your channel partners. With various reward options from 20 different categories, you can provide incentives that are different from competitors.

3. Increasing Supply Chain Complexity

FMCG companies can no longer rely solely on trucks to deliver their products to stores on time. As more and more play in today's industrial space, they need to be constantly aware of the trends and spikes. It affects supply chain operations which become much more complicated.

As a result, FMCG companies have to spend more on logistics and transportation. In addition, FMCG companies also have to handle a larger volume of data.

Solution:

Use an AI or cloud-based distributor management system to optimize the supply chain, demand forecasting, and personalized product offerings.

Businesses can also develop ordering applications that allow retailers to place orders directly with the company's sales team instead of relying on big distributors or wholesalers. To make it unique, you can also implement loyalty point per successful purchase.

4. Changes in Consumer Profile

As mentioned earlier, the consumer profile of the FMCG industry has changed; more people prefer online shopping than shop directly at the brick and mortar store, require fast and seamless shopping experience, lots of payment methods, free shipping, and the ease of tracking their purchases.

FMCG companies must step ahead to meet their customers in both offline and online channels to keep them engaged with the brands. And of course, technology can help you solve this challenge!

Solution:

The more opportunities you have to tap into a customer's lifestyle, the clearer your brand identity will be in their minds. Aligning the structure of your omnichannel loyalty program with your brand identity will help enhance your company's core message by connecting customer preferences, passions, and beliefs.

Use an omnichannel loyalty platform that enables personalized rewards for engaging and developing customer relationships. Tada Omnichannel program allows you to create campaigns and invite customers to participate via social media or distribute personalized messages via SMS, WhatsApp blast, Push Notification, and email can be an alternative to personalize your customer engagement.

5. Communication with End Consumers

The internet has changed all aspects, including how companies communicate with their consumers. If in the years before  social media is a thing, consumers submitted their complaints directly to the staffs at the store.

But right now, they may seem calm in front of your staff, but when they get home, they can immediately write an awful review via social media that has potential to go viral and make your business receive negative backlash.

Today's business owners must understand the tendency of customers who are now more comfortable speaking via social media.

Solution:

  1. Use social media as a platform to communicate with end customers. 
  2. Turn on your social media, don't just stick to product posts, but also educational, fun and engaging contents that align with your business
  3. Create various content about your brand education, promos, quizzes, and provide excellent service by replying to their questions about products or responding to bad service experiences on time.

So, What's Next?

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Despite the challenges, the FMCG industry has a bright future. Key factors such as retail technology solutions and mobility are essential considerations for developing the FMCG sector.

FMCG businesses must adapt to new technologies, be proactive in dealing with crises, and be flexible in their implementation strategies. You can also start incentivizing your B2B customers in the supply chain, like distributors, sub-distributors, wholesalers, retailers and others with proper rewards.

Tada can help you create a successful B2B loyalty programs that can be up and running in short time. We have helped businesses across industries with their B2C and B2B loyalty program. Request our demo now to see directly how we enable those businesses with loyalty programs that work.

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Nuraini

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