The customer of tomorrow, in a fast-changing scenario, wants everything at the swipe of a screen and a click of a button. The customer of tomorrow is even unwilling to step out and check the physical market and wants to buy most stuff online. Along with millennial, as a large number of Gen Z-ers come of age as consumers, they are no longer comparable with the consumers from the generations that preceded them, when it comes to the manner in which purchase decisions are made.
So, where does that leave conventional FMCG companies that have, for all these years, depended on age-old brand loyalties exhibited by families—generation after generation—and the traditional supply chains? Customers are fast-changing, as are their perceptions and points of access. Brand loyalties may soon become a thing of the past and disruption will be key to attracting the new-age customer. Emergence of many new-age brands, outlets and products are unimpeachable testimony of this changing consumer-leaning.
The various lockdowns of 2020 and 2021 also forced the FMCG industry to move fast and innovate by stepping out of their comfort zones. With conventional markets getting shut and factories running only partially in some segments, there was no choice but to think out of the box, innovate and redesign. Some companies opted for partial partnering with apps, to let shopkeepers locate and place orders with the former’s distributors (CavinKare is one example) while others like Marico launched their own direct-to-consumer (D2C) portals. Companies like Nestle redesigned their supply-chains and market reach, while many others struck partnerships with some emerging players in the start-up ecosystem by aligning with e-commerce entities, delivery-tech start-ups and food aggregators. Even Amul went through the disruptions emanating from Covid, but remained relevant to its consumers by innovating, adapting and continuing to stay relevant in the light of changing consumer expectations with RS Sodhi, the managing director of the company, leading from the front.
Even the ancients—large conglomerates like ITC —stepped on the gas on innovation and growth with adaptation and strategic takeovers. Some of these initiatives were led by ITC chairman Sanjiv Puri himself to harness innovation, forcing the company’s peers to peer curiously into what was cooking inside ITC! These included ushering a culture of young tech start-ups into a decades-old, matured manufacturing giant with significant investments made towards creation of a digital ecosystem to drive smart manufacturing, product quality, traceability and supply-chain agility, amongst others. Artificial Intelligence, Big Data, IoT and machine learning are being used across ITC’s supply-chain and distribution ecosystem. While these may seem, on the very surface, as mere improvements made to back-office efficiency (in supply-chain management terms), such initiatives become far more critical at a time when goods are being sought, or their delivery is being promised, in 10-15 minutes, and an efficient system is necessary to keep the supply-chain going in a manner that enables this.
At the beginning of the current millenium, even as India was looking to create mission mode e-governance projects that led to where we are today in terms of automation/digitisation in areas as diverse as UIDAI, passport, banking, income tax, etc, companies like ITC had donned the mantle of torchbearers of digitisation, through initiatives like e-Choupal. But those were back-end, manufacturing supply-chain stories.
What ITC has now begun— interestingly termed as Sixth Sense—is even more interesting as it gives insights through the mining of unstructured data such as social media chatter, thereby identifying consumer behaviour preferences; the system identified both fads and trends and also helped in communicating better with the company’s consumers through marketing initiatives and digital campaigns. FMCG companies like ITC are now expanding fast by eyeing the direct-to-consumer space, and Puri seems to be proactively ramping up efforts on this, adopting the new, inorganic way of growth.
It is therefore critical for FMCG businesses to continuously evolve, to be prepared to expect the unexpected. What the consumers prefer to buy, how much they wish to buy and where they wish to buy and what powers their preferences these days is a continuously evolving area. Hence, strategies like Sixth Sense—in all senses of the phrase—are an important innovative tool to pick cues from consumers’ mental chatter.
Business as usual will not work anymore and traditional strategies are bound to crumble, because the fastest change is happening in terms of the consumer herself. Influencers and influencing are no longer the remit of just traditional media, but exploding via new-age media. The game now is not just about safeguarding your existing customer base, but also using innovative and digital means to reach out to your new-age customers and, most importantly, aligning with new-age start-ups that are expanding in the food tech, delivery tech, logistics tech and other such spaces.
While the results of such efforts may not show immediately, they will definitely be visible in years to come. Hence, the mantra for FMCG companies would ideally be ‘make efforts towards adopting tech, target direct-to-consumer and align with start-ups and disruptive mediums to innovate and reach out to the consumer of tomorrow.’
Source : The Financial Express Dec 310 2021, by By Rameesh Kailasam