Consumers have undergone a once-in-a-lifetime transformation during the pandemic, and as their lifestyles expectations have changed, so too have their expectations of FMCG brands.
With consumers unable to travel, they have diverted their spending to consumption closer to home. Along with it changes, already underway, have accelerated. They have moved more of their shopping activity online. They’ve had time to reflect on their values - and the implications of that, from WFH to climate change have implications that FMCG brands are only beginning to appreciate.
Is Climate Change Affecting Businesses?
Attitudes are changing towards climate and with it consumers’ expectations. 93% of Australian leaders believe that meeting wider stakeholders’ expectations on Climate Change is increasingly significant for a successful business. Further, 65% of CEOs now consider climate and environmental changes to be a threat to growth. This shift in focus places Climate as their biggest challenge, besting both technological change and the impact of the pandemic.
It’s not just CEOs that are concerned, 64% of Australian consumers express that social and environmental responsibility is important to them when purchasing a brand. This trend is most pronounced amongst Millennials.
Recent consumers’ opinions and behaviours are not going unnoticed. Whereas as recently as 2018 just 7% of Australian executives believed their companies could influence environmental sustainability to a significant degree, now 83% cite tackling climate change as their generation’s responsibility to solve. This change of heart can be attributed to pressure from internal (25%) and external (48%) stakeholders when developing business strategies.
Rise of Technology in Businesses
Artificial intelligence (AI), known as industry 4.0, promises to disrupt business as usual in FMCG. The heavy reliance on human capital to complete routine analytical work is ripe for change. For instance, by 2025, 60% of supply chain efficiency gains will be due to AI. Data-driven tasks like forecasting, targeting, ordering stock, and repetitive tasks like completing paperwork can be automated with less risk of error using technology. For more complex or critical processes, AI can be used to derive insights that can be interpreted and approved by a human.
While the above refinements dramatically reduce the FTEs required for BAU, there are also significant revenue opportunities. The same predictive analytics approach used for forecasting can be turned towards marketing. AI can use it’s accumulated learnings to suggest personalisations that increase cross-sell and cart size, with up to 80% of shoppers more likely to buy from a company that offers personalized experiences.
It is to no surprise that AI will cause changes on how operations will be carried out in the future, and potentially make a deep impact to address social and environmental issues. Moreover, this aids businesses in elevating and amplifying consumers’ experiences. Investing into perfecting stakeholders’ experiences will build trust and brand loyalty, which motivates FMCG businesses to expedite these digital technologies.
Digital transformation has accelerated since the pandemic hit with businesses forced to deliver their products and services on both online and offline channels. Going digital empowers businesses to create efficient strategies and increase profits. In addition, it also assists in collecting valuable data from different social media platforms to understand the wants and needs of their target audience.
Businesses, especially retailers, are rushing in an attempt to retain the clients that they have gained during the pandemic. With that, they introduced loyalty schemes and gave plastic gift cards to consumers to spark brand loyalty. Despite that, the engagement of consumers with their loyalty cards is very low. Thus, businesses are starting to invest in personalised reward programs such as eGifts or Digital Gift Cards, for their specific target audiences.
Utilizing Omni-channel Marketing
Omni-channel marketing is a crucial business strategy that allows businesses to create personalised campaigns and messages for their target audience. Businesses recognise that 73% of consumers visit several channels for a brand before purchasing its product and services.
This requires businesses to adapt and establish relevant platforms to deliver messages to every consumer. This in turn enables data collection that businesses can use to better understand their customers’ behaviour. Further, they can locate the pain points and create strategies to create a seamless customer experience.
Closing the loop
The above trends outline in different ways opportunities to better understand and engage with FMCG customers. Businesses that perfect these will be able to connect with the values of their customers, their desires, and their frustrations, enabling fresh opportunities to serve their demands.
Making the most of your database, or growing it further are key motivators for many of these investments. Few strategies complement these approaches better than creating custom promotional campaigns designed to gain insights and attract more sales to the brand. These can be crafted to drive complementary objectives - increase customer loyalty, increase basket size, attract new business.