Amit Samsukha, Director & CTO at EmizenTech, is an eCommerce consultant, proficient at improvising IT infrastructure.
getty The past few years have witnessed a lot of technological alterations in the fast-moving consumer goods (FMCG) industry. Multiple factors have catalyzed these changes over time. FMCG is a product segment consumed by people daily and multiple times over each day. The industry is set to achieve a valuation of over $15 trillion by 2025. The registered CAGR is 5.4% from 2018 to 2025. At the same time, the Covid-19 pandemic triggered a change in which people are now more reliant on online mediums. According to data from Statista, the online share of the global FMCG market will surge to 10% by 2025 from just 5.1% in 2018. Smartphone applications have played a major role in making the industry technology-driven. Be it managing the supply chain, handling stakeholders, ordering inventory, forecasting demand, setting up new online stores or searching for products, there are apps for everything. Some of the ways that mobile apps are transforming the FMCG industry include the following.
- Better Customer Retention
With modern mobile applications, companies in the FMCG sector have experienced greater connectivity with their customers. By gaining customers' feedback on particular products, companies can make the necessary improvements to serve their customers better. 2. Smart Inventory Management
As with most large industries, the FMCG industry entails making several transactions to ensure a smooth supply. Modern inventory management apps help keep a complete record of manufactured, shipped, stored and sold inventory in one place. So, a company's supply chain can be streamlined to a great extent. Mobile app technology has introduced a new marketing concept: location-based marketing. Location-based marketing targets only the people present near a store to send them relevant offers and incentives. Because customers are nearby, there's a higher chance they'll visit the store. 4. Convenience
Smartphone mobile apps have escalated convenience in the FMCG industry in many ways. Manufacturers have an easier way to record manufacturing units and quantities. Suppliers are free from the manual tracking of inventory. Even customers don't have to visit stores, as delivery apps bring their orders to their doorsteps.
- Payment Solutions
In the FMCG industry, the supply chain is vast, with many stakeholders. Each interaction brings a monetary transaction with it. Payment solutions apps have streamlined and quickened the process by enabling instant, reliable and recorded financial transactions.
How Local Businesses Are Leveraging The Benefits
Here are some ways mobile applications are helping FMCG businesses achieve higher success.
- Affordable And Effective Marketing
The cost of printing or broadcasting ads can be prohibitive to some small store owners. Modern mobile applications bring an affordable and effective option to the table. Now, shopkeepers can connect to nearby people via their smartphones.
- Home Delivery
The modern grocery delivery app has become a great partner for local stores. Through partnerships, store owners can receive online customer orders and have them delivered to their doorsteps. The ability to fulfill online orders expands the boundaries of operation for local stores and can multiply daily sales.
- Online Stores
Modern-day apps provide numerous opportunities for companies to cross geographical boundaries and establish a presence in other markets. Providing an online store is one of the best ways to do this.
- Digital Payments
Digital payment options have reduced the handling of large amounts of cash as well as the opportunities for consumer fraud. Thus, digital payment apps have helped make monetary transactions safer and easier to manage.
Present-Day Challenges In The Landscape
There's no denying that mobile applications are playing a significant role in the advancements of the FMCG industry. Still, some challenges are slowing down the transition.
- Lack Of Technological Exposure
Some people in rural or low-income areas as well as the elderly may be unfamiliar with using smartphones or lack access.
- Security Threats
No technology should be blindly trusted. Security threats can cause important information compromises within any business.
- Lack Of Resources
Most apps that help improve businesses aren't free, and not all FMCG retailers can afford them. Also, expanding businesses via online means requires extra human resources that not every small business has access to.
- Consumer Habits
Some people love to do things traditionally. Shifting to digital apps seems like an overburdening task to them, and thus they hesitate to take the automation step.
- Increased Cost
Sellers may have to increase prices or charge fees to make up for the cost of implementing mobile technology, and this could turn away some end-level consumers who don't want to pay that extra amount when they can shop at the store directly.
Possible Future Landscape
According to data from Statista, 54% of the population in a developing country like India owned a smartphone in 2020, and that number is expected to spike to 96% by 2040. With smartphone adoption, familiarity with mobile apps will increase, and so will their use in business.
As hacking and data breaching risks have also increased, new safety measures are being unveiled over time. Data prevention solutions like intrusion detection and prevention systems, anti-virus solutions, data loss prevention and multifactor authentication have made digital systems more reliable and safe.
I expect that in the not-too-distant future, we'll see mobile apps being used by all small and large FMCG businesses to streamline processes and better serve their customers.
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