– By Anand Nayak
Access to affordable services is essential in today’s dynamic market landscape. India’s fourth largest sector is Fast Moving Consumer Goods. In the world of Fast-Moving Consumer Goods (FMCG), innovation proves to be a turning point for growth. A distinctive among these innovations is the standout known as digital transformation. In our current world, this game changer turned out to be fortunate to align the requirements of both suppliers and consumers alike. This digital transformation is paving the way for a dramatic change in how these FMCG companies run. Although lots of people link digital transformation with using software to manage production, its effects in the FMCG industry go way beyond just that, it also incorporates managing systems, efficient data collection, retailers profits, and consumer experience.
Globalisation and reach: Digital conversion
The best use of digitalization has led FMCG products to reach beyond geographical boundaries. The digital transformation has helped FMCG companies to locations where they could have never served before. According to the reports of the Department of Applied Economics, University of Lucknow The FMCG sector will grow by 13–14% over the next five to ten years, reaching a value of $220–240 billion by 2025, which is achievable only by the means of digitalization. The rise of the E-Commerce industry has broken the chain of physical appearance of the seller and the consumer, which contributes to allure more customers worldwide with more profits and earnings.
User-friendly interface: Customer engagement
Digitalization has proven to be successful more for the consumers than for any other factor. With the arrival of AI, it has become so easy for FMCG companies to gather and analyse data on consumer behaviour, history, and market trends and then amend the user interface which sets with the demands of consumers. A User-friendly interface aids with the necessary changes done to the upcoming approaches to campaigns, customer engagements, and services.
With the appearance of E-commerce services in every location the consumer can now compare the products available in the market along with the prices. With the friendly interface, it’s now very convenient for the FMCG to provide faster response to buyer and market demands which results in advanced customer engagements.
No middle man: No chain
The E-commerce platform has assisted with the innovation of the D2C model which indicates a direct connection between the Brand and the customers eradicating all middlemen and retailers. Digitalization has supported FMCG to directly coordinate with the consumers to collect significant customer data and reviews, allowing the brands for more personalised experiences and product services. This evolution has created a safe sphere for the brands to control their product services, shrinking the consignment money and having a command over their brand reputation which often gets deferred by the middlemen.
Digitalisation of data: AI intervention
According to the reports of statista.com, 33% of consumers prefer express delivery options as a means of shopping experience. Today, AI is changing online shopping by quickly and accurately analysing data, revolutionising how we buy, sell things online, and easing FMCG to produce a personal experience model for consumers. AI in online shopping does more than just improve how customers are served—it also helps with important decision-making by predicting future trends and market needs. Data systems can look through lots of data to find patterns and understand what customers do. This helps online stores guess better about how much of something they should have in stock and avoid losing sales in case they run out.
Organised data, less management: More inventory
Digitalisation has enhanced business efficiency. Even though technology has been crucial for making products in the FMCG industry, it’s also been useful for other parts of the business. When FMCG companies use technology in their supply chain, they can make orders faster, handle their stock better, and get things to customers quicker.
Using digital tools can also make other parts of the business work better, like keeping track of money. Plus, it can help find places where things aren’t working smoothly.
To sum it up
Digital transformation has proven to be a major factor in the growth and evolution of the FMCG industry in India. By benefiting from technology, FMCG companies have expanded their reach, engaged customers effectively, eliminated middlemen, and optimised operations. The shift towards digitalization has enabled FMCG brands to stay competitive in a dynamic market landscape, providing personalised experiences and enhancing overall efficiency. As we continue to embrace digital innovations, we anticipate further advancements and growth opportunities in the FMCG sector.
(Anand Nayak is the co-founder of Chai Sutta Bar.)
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