FMCG major, ITC has been expanding its digital play over the years encompassing areas ranging from sourcing to manufacturing, analytics, and marketing. B Sumant, executive director tells FE Online’s Anushree Bhattacharyya, how the company is building a ‘FutureTech’ enterprise. Excerpts:
What role does digital play in ITC’s FMCG marketing strategies?
At ITC, our aspiration is to create a ‘FutureTech’ enterprise, where digital and innovation will be two key levers to power enhanced competitiveness and growth. Digital plays a critical role across the board right from sourcing to manufacturing, analytics, marketing, inventory planning and distribution. In fact, let’s start with the consumer. The focus here is on real-time, new-age insights, deep social listening, bespoke brand campaigns & engagement and hyper-personalisation. We have implemented a variety of digital tools and platforms such as the ‘ITC Sixth Sense’ which is a sensing engine, that constantly listens to social conversations, and gathers insights. We further classify these conversations based on points of interest, tonality, topicality and so on. At the same time, we created a ‘Customer data hub’, a central repository of first-party data, which is powered by robust AI engines to segment consumers at scale and understand their needs. We also have affinity engines which enrich the data enabling us to sharp-target consumers and make our interventions more cost-efficient.
Over the last few years, we have also focused on ‘moment marketing’. With insights on consumer sentiments, we can run specific ads at any moment, as we can create ads instantly using digital technologies. So, we diversified from a large set-up for shooting ads to assembling ads within a short span of time. Now we can create multiple ads using AI technologies which are able to target specific consumer cohorts. At ITC, contextual communication & consumer promotion has led to 3000+ Content Assets being created in FY22.
How has ITC focused on innovation to develop products and ensure agile launches?
ITC is focused on delivering purposeful and consumer-centric innovation and experiences. Every business has dedicated product development teams, which have extensive R&D capabilities. For example, let’s take a segment like snacks. There are teams working continuously on all kinds of products – including adjacent variants as well as new offerings. The product development teams in each Business work in close collaboration with the ITC Life Sciences & Technology Center, which is involved in game-changing research and development. The team at ITC-LSTC is engaged in platform-based research in high impact areas such as nutrition, wellness, hygiene, convenience, in order to find solutions to evolving consumer needs and long-term problems. We also run clinical trials of our products. For example, in the case of our Aashirvaad sugar release control atta, the product was tested to analyze glycemic index. So, when you have rotis made of this low GI (glycemic index) atta, your sugar spike is far lower.
ITC’s deep consumer insights have led to many innovative product launches in recent times including ITC Master Chef frozen snacks, pastes and gravies, Dark Fantasy Nut Fills, Mom’s Magic Butter Fills, Aashirvaad instant meals, Savlon handwash powder, Nimyle floor cleaner with lemongrass, Nimyle sachet packs, Classmate Interaktiv Origami notebooks, variants of Mangaldeep incense sticks, among others. We are also leveraging the insights from digital tools and social listening platforms to launch such customised products for different consumer cohorts.
How have you used digital to drive demand as well as meet it?
Our innovation engine enables us to launch a large number of products. For instance, over the last two years, we launched over 230 new offerings. Our FMCG portfolio accounts for a consumer spend of Rs 24,000 crore. ITC’s businesses consist of a very large ecosystem of over 200 factories, about 50 warehouses, over 2,200 distributors, and more than 14,000 stockists besides 2.5 million retailers. This large engine requires an integrated digital architecture to manage the complex system and make it nimbler and more efficient. AI is leveraged across areas such as customer segmentation, moment marketing, chat bots, identifying the new vectors of innovation & story telling as well as AI based transactional tools and recommendation engines for the sales teams and distribution partners.
Furthermore, we use digital tools for superior supply chain optimisation. For example, we use trucks to the optimum capacity of both weight and volume by stacking them with a variety of products from heavy items such as atta, to ultra-light but bulky items like snacks. This is done by constantly monitoring the product mix specific to geographies through deployment of digital tools.
With so much data, how do you look at personalisation of products?
The next phase of product development for the FMCG industry will be defined by customisation and personalisation. For example, we have recently launched Aashirvaad’s ‘Meri Chakki’ atta, which redefines consumer experiences by providing customisation options for atta. The unique offering allows a consumer to create her own atta mix, which is delivered to her doorstep through our own D2C platform itcstore.in. Other examples include classmateshop.com – an online ordering option for students to customize notebook covers as well as ITC Engage Fragrance Finder – an AI tool to help consumers select fragrances that suit their liking.
Another example is Dermafique.com Smart Skin Advisor, where we work with dermatologists and skin advisors for personalised skin care solutions. Before the pandemic, we had put in place Swiss technology-based machines in specific stores, which allowed consumers to understand their skin characteristics. After the onset of the pandemic, we rolled out an app, which analyses the skin and recommends products.
With many other large players strengthening their commerce side with the acquisition of retail outlets, does ITC have any such plans?
ITC’s omni-channel distribution network facilitates availability of its products in nearly 7 million retail outlets. We work closely with all our channel partners, from start-ups to retailers. In a synergistic model, we use the data from our ITC e-store to understand, learn and engage with our consumers more extensively. We further use the insights to aid in assortment decisions of kirana shops and other distribution partners. We have also digitalised our sales and distribution operations. So today, when a salesman goes to an outlet, there are several thousand data points based on which the AI engine gives a recommendation on what to sell to the outlet. ITC was amongst the frontrunners in the industry to extensively adopt digital technologies in order to deepen connect with retailers. Innovative solutions include an app-based anytime ordering system for retailers called UNNATI as well as VIRU, the Virtual Salesman – that uses Machine Learning for hyper-personalisation to enable direct communication with trade, especially during times of limited mobility.
We are not in the business of retail and do not intend to foray into that space. That’s a completely different business which requires different skill sets. We are a large FMCG player with focus on developing innovative and differentiated products to the consumer. We build brands and products from scratch and wherever there is a gap in our portfolio, we look at acquisitions.