High volume sales and low-profit margins are what best define the FMCG industry. However, maintaining high volume sales is not always easy for this industry. Despite these challenges, the FMCG industry is projected to exceed the total market valuation of over $15 billion by 2025.
Many factors influence the growth prospects of the FMCG industry. For instance, the distribution channels, type of products, and even the region of sale play a key role. As a result, it is no surprise the FMCG industry has to navigate through many challenges.
But fortunately, technology can help you enhance the sales of your food and beverage products. So, continue reading to know more on the subject.
Current State of the FMCG Industry
The FMCG industry has undergone extensive evolution in the past couple of years. Currently, customers are more concerned about getting the ideal shopping experience. Thus, many businesses in this industry strive to deliver this optimum experience with technology applications.
Besides that, there is an emerging trend where most FMCG businesses are leveraging the e-commerce mechanism. This came as a consequence of the recent Covid pandemic when online shopping became a habit for customers. This presents many new and unprecedented challenges for the FMCG industry.
Nonetheless, the FMCG industry is still growing at a rate of 5.4%. So FMCG businesses must be open to the idea of adopting new and advanced technologies. This will help them better manage many challenges in the industry. But what are these challenges? Continue reading to find out.
Prevalent Challenges Faced by the FMCG Industry
Rapid technological advancement has played a key role in empowering customers even more. As a result, the competition in the FMCG industry has stumbled across many challenges. Some of the most common challenges include:
1. The Transformation In The Selling Scenario
Customer behavior and expectation have evolved a great deal in the past couple of years. So persuasive sales strategy does not cut it anymore. Instead, FMCG businesses need to make efforts to better understand the retail scenario and deploy strategies accordingly. This can only be done with advanced tools and technologies.
Technologies can help an FMCG business determine new avenues to target, find new opportunities, determine the ROI, etc. Additionally, FMCG businesses also need better sales forecasting capabilities with real-time visibility of the workflow to comply with the needs of transforming selling scenarios.
2. Inability To Reach Right Customers At The Right Time
Most FMCG businesses are yet to come to terms with the new business environment that thrives on efficiency. Besides that, FMCG retailers need to maintain an effective market presence across physical and online stores. This is important to ensure customers can access your offerings with minimal hassle.
Thus, businesses need to work on strengthening their decision-making capabilities. This will ensure the right products are available at the right location at the right time. So technology is again a savior here to help the FMCG industry better fulfill its customer demands.
3. Lack Of Visibility In Work Order Management
The management team of an FMCG business needs insights to make decisions accordingly. However, there is a significant lack of visibility in the work order management of businesses. This restricts the decision-makers from making the right decision at the right time.
Thus, the FMCG industry needs to leverage advanced analytical solutions to boost visibility and drive better decision-making. This will make work border management much easier with minimal errors and better customer satisfaction.
4. Inability To Provide Relative Servicing
Adding value and enhancing customer satisfaction must be at the heart of every business strategy for the FMCG industry. One simple way to do so is by providing customers with continual relative servicing. Numbers suggest relative servicing can help enhance the brand performance by 1.2 times.
This responsibility falls on the shoulders of the sales representatives. First, they need to keep an eye on strategies used by competitors in the market. But the more effective approach would be to use technology to better understand the market and curate strategies accordingly.
5. Sales Automation
In this rapidly transforming age of technology, automation is at the heart of everything. Thus, traditional sales practices and strategies do not appeal to customers anymore. Instead, FMCG businesses need to focus their efforts on leveraging sales automation and using it to their advantage.
Automating your sales will give a smart approach to help determine different areas and cover the market based on its consumption capabilities. Besides that, sales automation will also help you enhance the overall customer experience to better understand customer expectations. So again, technology is a must-have here to help one realize such goals.
How Can SAP Solutions Help the FMCG Industry?
Modern SAP solutions are an amalgamation of many advanced technologies that work together to help businesses realize their goals. As a result, these solutions can help the FMCG industry overcome many challenges with ease.
For starters, your FMCG business can leverage the analytical capabilities of the SAP ERP system to generate better insights. This will help the business better understand customer expectations and shape its strategies accordingly. Besides this, it will also help boost visibility or workflow order management to minimize errors and boost customer satisfaction.
Additionally, transformation in selling scenarios has been another pressing concern for businesses in the FMCG industry. Consequently, FMCG businesses need access to advanced solutions and technologies to address the need for this transformation. For instance, FMCG e-commerce is the new post-pandemic reality. So, businesses can leverage advanced business solutions to facilitate an effective e-commerce experience for customers.
Finally, FMCG businesses can also augment their forecasting and predictive capabilities with the analytical capabilities of cloud-based SAP solutions. These solutions will help businesses better use their data to generate insights and drive better decision-making. The SAP Analytics Cloud solution is one of those handy solutions in this scenario.
Business environments across almost every industry are transforming, and the FMCG industry is no exception. Businesses need to keep up with this rapid transformation to drive results and meet customer expectations. So, leverage the advanced capabilities of SAP solutions and transform your business by solving one challenge at a time.