FMCG Zeitgeist: Preparing to serve the customer of tomorrow

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Brand loyalty may soon become a thing of the past, disruption will be the key to attracting the new age customer

By Rameesh Kailasam

The customer of tomorrow, in a rapidly changing scenario, wants everything with a swipe of a screen and the click of a button. The customer of tomorrow doesn’t even want to go out and check out the physical market and wants to buy most things online. With millennials, as large numbers of Gen Z mature as consumers, they are no longer comparable to consumers of generations before them, in terms of how purchasing decisions are made. are taken.

So where does that leave mainstream FMCG companies that have, for all these years, depended on age-old brand loyalty exhibited by families – generation after generation – and traditional supply chains? Customers change rapidly, as do their perceptions and access points. Brand loyalty may soon become a thing of the past and disruption will be the key to attracting the next generation customer. The emergence of many new-age brands, outlets and products is compelling testimony to this changing consumer trend.

The various blockages of 2020 and 2021 have also forced the FMCG industry to go fast and innovate by going out of their comfort zones. With conventional markets shutting down and factories only partially functioning in certain segments, there was no choice but to think outside the box, innovate and redesign. Some companies have opted for a partial partnership with apps, to allow merchants to locate and place orders with premier distributors (CavinKare is an example), while others, like Marico, have launched their own portals. direct-to-consumer sales (D2C). Companies like Nestlé have redesigned their supply chains and market reach, while many others have partnered with some emerging players in the start-up ecosystem by aligning with e-commerce entities, delivery start-ups and food aggregators. Even Amul has weathered the disruption emanating from Covid, but has remained relevant to its consumers by innovating, adapting and continuing to stay relevant in light of changing consumer expectations with RS Sodhi, the CEO of the company in the lead.

Even the old ones – big conglomerates like ITC – have stepped into innovation and growth with adaptation and strategic takeovers. Some of these initiatives were spearheaded by ITC President Sanjiv Puri himself to harness innovation, forcing company peers to scrutinize what was brewing inside ITC. ! These included bringing a culture of young tech start-ups into a mature, decades-old manufacturing giant, with significant investments in building a digital ecosystem to drive smart manufacturing, quality of products, traceability and supply chain agility, among others. Artificial Intelligence, Big Data, IoT and Machine Learning are used across ITC’s supply chain and distribution ecosystem. While these may at first glance seem like simple improvements to the efficiency of the back office (in terms of supply chain management), such initiatives become much more critical at a time when goods are wanted, or their delivery is promised, in 10-15 minutes, and an efficient system is needed to maintain the supply chain in a way that allows it.

At the start of the current millennium, even as India sought to create mission-mode e-governance projects that have brought us to where we are today in terms of automation / digitization in areas as diverse as ‘UIDAI, passport, bank, income tax, etc. companies like ITC had taken on the mantle of digitalization torchbearers, through initiatives like e-Choupal. But these were manufacturing supply chain stories.

What ITC has now started — interestingly called Sixth Sense — is even more interesting because it provides insight through the exploration of unstructured data such as social media chats, thereby identifying behavioral preferences of people. consumers; The system identified both fashions and trends and also helped communicate better with the company’s consumers through marketing initiatives and digital campaigns. FMCG companies like ITC are now growing rapidly by eyeing the direct-to-consumer space, and Puri appears to be proactively stepping up its efforts in this area, embracing the new mode of inorganic growth.

It is therefore essential for FMCG companies to constantly evolve, to be prepared to expect the unexpected. What consumers prefer to buy, how much they want to buy and where they want to buy and what drives their preferences these days is a constantly evolving area. Therefore, strategies like Sixth Sense, in every sense of the word, are an important innovative tool for leveraging the mental chatter of consumers.

The status quo will no longer work, and traditional strategies are doomed to collapse, as the fastest change occurs with regard to the consumer himself. Influencers and influence are no longer the preserve of traditional media alone, but are exploding through new-age media. Now, the game is not only about protecting your existing customers, but also about using innovative and digital means to reach your new-age customers and, above all, to align with the new-age start-ups that are developing in the world. food technology, delivery technology, logistics technology and the like.

While the results of these efforts are not immediately visible, they will certainly be in the years to come. Therefore, the mantra of FMCG companies would ideally be to “make efforts to adopt technology, directly target the consumer, and align with disruptive start-ups and media to innovate and reach the consumer of tomorrow”.

The author is CEO, Indiatech.org

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