The global leader offering “the best a man can get” has lost market share over the years to upstarts who not only disrupted the market a few years ago but found Billion dollar plus valuations in just a few years of their inception. FMCG (fast-moving consumer goods) industry is hugely impacted by the consumer preferences guided by the socio-economic changes taking place and the communication strategies of the market players. Keeping a tab on the shifts taking place in the consumer preferences over time and forming new ideas are the most challenging tasks before the business leaders.
In India, FMCG industry is one of the largest sectors in the economy, generating nearly 100 Billion USD in sales and growing every year at a pace faster than the GDP. As the rural household incomes have been on a rise, the industry is slated to continue its growth momentum. What lies ahead?
Challenges to conquer
Telecom revolution in India happened later than many developed countries in the world; however, this has helped India accelerate the development in technology and skip a few intermediate stages of development. Smartphones and internet connectivity have been ubiquitous; social media and various applications have influenced our thinking in a big way and as a result, the decision-making process for consumers is changing.
An increasing number of consumers is looking to buy products and services online; they are looking to pay for convenience as much as for the product itself. Product buying decisions are increasingly taken after listening to feedback from multiple sources. Traditionally accepted factors such as communication from the brand, pricing, packaging, product quality and availability are no more the major factors influencing the buying decisions. We have additional variables which are significant in the time ahead and hence, for an FMCG player, there are more challenges to conquer. What are they?
Attract great talent
Private labels can create a niche for themselves challenging the behemoths. Gillette is owned by P&G, one of the most innovative companies in the world. Further, Gillette has been a clear market leader for decades; yet Dollar Shave Club and Harry’s could challenge this behemoth. To make matters worse for Gilette, the overall market size has been either stagnant or shrinking a bit. The challengers could win because they could listen to the unmet wants of the customers, observe the changing patterns in consumer behaviours and connected the dots to identify a gap in the market that can potentially be filled by them meaningfully. We need the best minds to observe the patterns and build a solution. How do we get them?
We have to identify the critical roles and focus on manning them with the best one can do. And use external help to harness the internal strength for critical decisions. Certain roles in the organisation need to be ramped up and down in line with the demand curve, and the non-critical roles need to be outsourced. In any case, we need the best talent for the organisation to demonstrate high levels of consistency in its beliefs, values and ambitions. There are a few critical aspects which typically draw the best talent to the organisation.
Among several factors, we have to articulate to potential candidates some of the most important ones such as clear ambitions, value proposition, financial strength and the organisational culture. Great talent looks for a culture that empowers people to perform, provides them with adequate freedom to perform and upholds transparency. Talent scouts for the company have to be skilled enough to communicate the value proposition and get the best onboard. Leadership teams have to demonstrate the right behaviours so that their organisation becomes a talent magnet.
Technology in every step
As consumers are looking to pay for convenience, buy online and consume communication on multiple channels, companies have to review their communication and distribution strategies. One has to track the sentiments about the brand on various channels – social media, e-commerce platforms, chats, calls, points of sale and so on. Accordingly, the communication across all channels has to be configured and followed through.
Automation of business processes, use of AI tools and analytics, exploring the use of new technologies such as virtual reality can bring us the efficiency gains in supply chain management, production, R&D, new product introduction, sales and distribution. Targeting different niches can become effective with customised messaging and choice of appropriate media. That’s the way forward!