The importance of data in developing omni-channel FMCG strategies

Supermarkets will remain the profit centres of FMCG retail for the foreseeable future, but an intelligent approach to omni-channel strategies is reaping rewards for some FMCG producers.

By: Karl Miklis 

This is the second article in our series exploring the role of data in understanding the acceleration of online retail and the implications for FMCG suppliers.

As much as direct to consumer is taking the retail world by storm, the concept is still relatively niche for FMCG businesses, where the shelves of supermarkets have for decades been the front line of sales.

But the gridlock that enveloped grocery retailers through the first few months of the pandemic encouraged a number of FMCG suppliers to develop new initiatives to connect more directly with their consumers. Toilet paper is the most obvious example that comes to mind for most of us, and existing online retailers in that space certainly benefited from the atypical purchase behaviour that overtook some Australian shoppers during March and April. But more conventional producers also made the leap.

Beans on toast, on demand

Heinz was one of the first, introducing an entirely new direct-to-consumer website in a very short timeframe, selling pre-packaged product bundles to locked-down shoppers seeking out familiar and heritage brands. Other organisations followed suit, with the realisation that regular supply chain constraints and lockdown restrictions meant that the consumers who wanted to buy their products were not necessarily able to obtain them. The typical bundling approach employed by these companies was a direct response to the new normal under COVID, providing a range of options to shoppers spending more time at home than ever before.

This kind of outreach marks a radical departure from the traditional bricks-and-mortar channels where retailers develop the relationship with consumers. Whilst technology is the enabler, allowing FMCGs to diversify their distribution channels and service customers directly, the pandemic has provided the momentum, particularly in categories heavily impacted by increased demand during the panic buying phases.

Will this trend continue? For most FMCG businesses, it’s more likely that once the world returns to some form of normality, consumers’ preference for buying their baked beans with their milk and bread will dictate a return to the convenience and customer experience provided by supermarkets, and online direct sales will be an addition rather than a replacement. High delivery costs have also meant that direct-to-consumer FMCG retail has battled with profitability in the past, with some manufacturers who pursued direct-to-consumer strategies during the recent crisis citing the value of the data collected, rather than profit, as their primary motivation.

A new lens to consumers

The enduring insights provided by the experience are the real objective. Businesses who previously had no direct relationship with their end customers now have immediate access and a new level of understanding of who they are, enabling FMCG companies to provide a level of personalisation not previously possible through mainstream retail channels. They also gain a ground-level understanding of the challenges and opportunities facing retailers, useful for both their decision-making and their relationship with retail partners. Combined with scan and shopper data from physical retail, this level of insight is a powerful tool for FMCG businesses.

For those who continue to occupy both spaces – online and on supermarket shelves – the opportunities are enormous. A case in point is Huggies, who maintain a prominent space in physical stores as well as an engaging website and direct rewards program, incorporating features such as coupons and parenting tips and advice. The website attracts a loyal customer base, brand authenticity, strong trust and improved brand equity. Combined with data from a strong physical presence, Huggies are able to obtain a near-complete picture of their consumers and more effectively utilise the ideal channels to reach them.

For FMCG businesses looking to adopt similar omni-channel approaches, it will be crucial to draw on the complete spectrum of available data and convert those consumer insights into real impacts for your bottom line.

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If you’re ready to leverage the power of data, we’re ready to help. Reach out today to discuss how we can put eighteen years of experience in FMCG analytics, along with retail customer and banking transaction insights from over ten million customers, to work for your business. One of our client leads who is a specialist in your category will take you through our learnings one-on-one and discuss the consumer trends impacting your business and opportunities for growth.

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