Why the Traffic Model Can Be Misleading for FMCG Brands in ECommerce

For FMCG brands stepping into ECommerce, the traffic model —

Page Views (PV) x Conversion x Basket Size x Availability        

— seems straightforward for growth. Drive traffic, convert visitors, increase basket size, and keep stock. But while this model works for many, FMCG brands may find it oversimplified, even misleading.

Unique Challenges for FMCG Brands

1. High Purchase Frequency vs. Low Basket Size FMCG products are low-cost essentials, making average basket sizes small. Increasing basket size alone doesn’t drive growth — FMCG brands rely on repeat purchases.
2. Conversion Doesn’t Equal Loyalty Unlike one-time conversions, FMCG success depends on brand loyalty. Focusing solely on conversion can mislead brands into ignoring customer retention, risking unsustainable growth.
3. Seasonality and Consumption Cycles FMCG products often see demand spikes during specific times (e.g., holiday snacks). Consistent stock levels are challenging, and the traffic model doesn’t account for these fluctuations.
4. Quality Over Quantity in Traffic High page views don’t guarantee conversions. Targeting low-quality traffic, like general ads, may boost PVs but won’t attract loyal, repeat buyers.
5. Price Sensitivity and Competitive Pressure FMCG pricing is competitive, with consumers comparing prices across platforms. Relying solely on traffic for conversion ignores the complexity of discounts, promotions, and price wars.

How FMCG Brands Can Adapt the Traffic Model

1. Prioritize Repeat Purchases To build loyalty, focus on strategies that encourage repeat business. Loyalty programs, incentives for subscriptions, and retention campaigns are key.
2. Targeted Traffic Strategies Focus on attracting high-intent audiences rather than maximizing page views. Segment your traffic to target specific groups, like eco-conscious buyers or family-oriented shoppers.
3. Realistic Basket Size Goals Encourage practical upselling and bundling. Group frequently bought items like "Weekly Essentials" packs rather than just increasing item count.
4. Align Conversion Strategy with Pricing Price-sensitive shoppers respond well to volume discounts and limited-time promotions. This approach balances competitive pricing with effective conversion strategies.
5. Plan for Seasonal Demand Use inventory forecasting to match stock levels with anticipated demand during peak seasons, like Ramadan or holidays, to prevent stockouts or overstocking.

Real-World Application for FMCG Brands

Consider an Indonesian FMCG brand selling ready-to-drink beverages. They targeted specific audiences with focused ads, bundled products to increase basket size, and used predictive analytics to maintain stock levels during peak times. This approach led to steady growth by focusing on high-quality traffic, realistic basket sizes, and tailored availability.

Key Takeaways

Adapting the traffic model to fit FMCG needs can result in:

• Higher Retention and Loyalty: Encouraging repeat purchases stabilizes revenue.
• Improved ROI on Traffic: Targeted strategies reduce wasted impressions.
• Sustainable Growth: Focusing on lower basket sizes and seasonality supports long-term growth.

For FMCG brands, a more customized approach to the traffic model can lead to greater success in ECommerce. Growth isn’t just about increasing traffic or basket size — it’s about building a loyal, returning customer base.

For the full article and in-depth insights, check it out on [Medium] https://medium.com/@rudyadrian/why-the-traffic-model-can-be-misleading-for-fmcg-brands-in-ecommerce-more-than-just-pv-x-758c58a8dcc9?sk=dcc573902e04d2b3de9b0aa8a67e6086 and follow The ECOM Growth Catalyst.