The Biggest Challenges Faced By The FMCG Industry In 2022

Proper Retail Execution

Have you ever walked into a store to get a packet of milk and ended up walking out with two bags filled with well, everything? Well, "I have not," said no one ever. This is most likely to have happened at the store physically and that split-second decision to buy everything apart from your list is the result of a well-drafted retail execution plan.

So, what exactly is this?retail execution??It is a form of sales strategy aimed at improving sales in the store or venue of the brand by implementing specific regulatory measures.

From an FMCG perspective, it ensures that the store's product is how it needs to be to increase revenue. A proper retail execution plan includes shelf merchandising, order replenishment, trade promotions, store audits, and more. Though driving the distribution and display promotions to contribute a chunk to sales, proper retail execution is essential in driving the sales to new heights.

It has been reported that there has been a loss in 25 percent of sales due to poor retail execution and 79% of impulse buys occur at physical retails with a strong execution strategy. With the pandemic and lockdown, countries have been advised to shut down a majority of the shops and this has resulted in empty shelves and deserted shops. In addition, people have also resorted to buying essential supplies in bulk and stocking them.

In uncertain times, budget constraints and health consciousness have taken precedence and have changed customer perspectives on indulging. All these have led to poor retail execution planning and brands must step up and rethink their customer demands to foster a feasible retail execution plan.

Sales Automation

FMCG has been an industry that has highly depended on traditional sales practices. As the world has taken a digital turn,?digitalizing field service in FMCG?has become essential for running a successful brand. With people becoming less accessible to each other, sales automation through digitalization has been prioritized over traditional sales practices.

With the loss of laborers due to several issues including migration laws and health concerns, the FMCG sector should not only ensure that the sales force gets their job done but also ensure that their work is productive, and optimized. This is why?sales force automation?in your field teams is important, but that's a story for another day.

Help and assistance should be provided to push them to achieve a good ROI. This requires a well-strategized sales force automation plan to go the extra mile with recommendations and acquire insightful data. Sales automation software not only increases sales but also boosts employee productivity and collects insightful data with the help of IoT and AI to go the extra mile and streamline the business.

A recent McKinsey report outlined that 30% of all sales tasks can be automated.?Field sales automation?helps in reducing the cost of sales processes by reducing the time spent on manual processes and reporting.

Here are three reasons explaining why sales automation is essential for FMCG

• Provides a way for a smart approach: It helps identify areas of market coverage in terms of potential and not geography. In this way, companies can focus on meeting customer demands effectively instead of trying to crunch up their numbers.
• End-to-end digitalization: Helps FMCG brands with end-to-end digitized sales scheduling and planning with the help of in-depth market intelligence through IoT and AI.
• Encourages fulfilling customer experience: Salesforce automation puts the customer first and focuses on giving importance to their customer experience. Demand is created by identifying customer expectations.

Ageing

FMCG has been a sector that depends on age-old brand loyalty. But the trick here is to identify the audience to which they cater. Being a very traditional and an old market, FMCG has a?widely ranged consumer number?from senior citizens to our very own millennials. Unlike certain industries that have catered to a specific set of consumers, finding the right balance to satisfy and stay relevant with a wide variety of age groups is going to be a tough nut for the FMCG industry.

The population of the older generation is on the rise, and it is expected that there will be a rise of 41% in India's elderly population over the next decade to touch 194 million in 2031. Senior citizens are often the pioneers of brand loyalty and have been the pillars of the industry. With the onset of the pandemic, their needs have shifted towards simple, reliable, and risk-free products.

To cater to such needs, FMCG brands can simplify products by making small changes while choosing the ingredients, reducing the use of chemicals, and boosting the use of natural ingredients in both food and non-food products. At the same time, attention should be given to the present generation as well.

With the millennials being exposed to a whole lot of technology and products from all over the world, there is pressure for the FMCG market to remain 'cool' enough for them to retain customers of this generation. Finding the middle ground is essential. Constantly evolving their strategies, and digitalizing while ensuring easy accessibility can help strike this balance.

Environment And Sustainability

Sustainability for field service in FMCG?has been a major issue in the present world. Industries have been dumping their wastes in water bodies and the amount of smoke from manufacturing plants has taken away the lives of countless animals, and water species and has slowly started killing humans. As children of the earth, it is our responsibility to protect it and change our lifestyle adhering to sustainable practices.

The?FMCG sector?has bought its fair share of controversies by undergoing practices that degrade the environment. PepsiCo, Hindustan Unilever, Dabur, ITC, Kelloggs, Mother Dairy, and Nestle are some classic examples. The youth of today are smart consumers and are looking to choose brands that have values that include sustainability. According to a report by Forbes, FMCG companies have a key role to play in curbing over a third of global greenhouse gas emissions and should invest in R&D for the same.

Adapting to sustainable ways by reducing the usage of plastic, conscious elimination of waste, adopting alternate ways of packaging, sustainable sourcing, and plant alternatives are among the many ways in ensuring that companies are adhering to the environment and inculcating sustainable practices. Industries must keep the?environment and sustainability?at the center of their plan.

Even though FMCG companies struggle to tackle the environmental responsibility of their production, packaging, and waste management, some brands have taken initiatives to reduce the amount of degradation. Dauber has taken several steps to be environmentally responsible and has eliminated cartons from their packaging. They have also initiated recycling and reusing thousands of kilograms of waste. Brands must incorporate strategies in their supply chain management and be socially and environmentally responsible.

Closing Thoughts

One of the many ways to win in the FMCG market is by making sure you follow the right principles through and through, making quick changes wherever needed, and taking note of what you can and cannot achieve. These three sales strategies will go a long way in helping build a good reputation for your brand, and over time, you will start to see the numbers go up and eventually explode out of proportion.

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