Changing market dynamics bring with it an array of products that compete for customer loyalty and attention. Let’s look at market trends for 2020
India’s Fast-Moving Consumer Goods (FMCG) sector has seen remarkable transformation over the last two decades. This was facilitated by rising income levels, urbanisation and a change in consumer behaviour. In general, industry sentiment has been positive and optimistic, post demonetisation and the roll out of the Goods and Services Tax (GST). Rural consumption has superseded industry expectation with modern retail estimated to grow three times in the next five years. A significant change in lifestyle choices as well as substantial increase in disposable income has fuelled this growth. Nonetheless, changing market dynamics bring with it an array of products that compete for customer loyalty and call for attention. Here is a look at the trends for the FMCG market:
Digitisation: Increase penetration of smartphones and internet will lead to people, especially in the rural areas, gaining easy access to daily needs via e-commerce websites. Availability of easy mobile payment options has lead to an increase in the number of orders from Tier-II and Tier-III cities, which enables people to get timely delivery of goods at their doorstep.
Multiple channels of trade: This helps users make purchases through social media platforms on which they spend a lot of time like Facebook, Youtube and Instagram. This has led to people experiencing an interactive form of shopping experience. Customers get the best of both, entertainment and shopping. Other than traditional portals like Flipkart and Amazon, supermarket apps like Grofers and Big Basket, too, have become popular.
D2C model: This is a popular business model that allows buyers to get goods directly from the seller/manufacturers, eliminating the need of any middlemen. Several e-commerce websites have been set for this purpose. Buyers save money as well as time.
Brand community: Users these days can interact with other people, who have bought the same product and talk at length and seek reviews about them. A lot of brands are devising marketing strategies to build brand community, where they target people who are interested in their products and have similar social, political and cultural factors. This makes interaction a bit more personal than is the case with customer care representatives.
Foreign brands: International brands have left no stone unturned to enter the Indian market for the demand their products have generated. This has forced local as well as domestic manufacturers to up their game and provide cheaper alternatives while not compromising on quality to offer the same sense of pride that a foreign product provides.
Consumer behaviour: This is something that cannot be cast in a permanent pattern. However, there are a few patterns that have been present for a long time, diverting our attention to the ways consumers spend their money. After analysing past and present data, one will come across trends of consumer behaviour, which will be prevalent throughout 2020. One of them is consumers buying family packs and combo offers as it saves them an extra trip to the grocery store. Other common instances of consumer behavior are: High demand of ready-to-eat snacks, wellness products, mostly organic and premium quality ones. In order to keep up with these trends, firms must be pro-active in taking steps that can ensure brand-building and longevity in the market.
Build strategy around consumer preference: It is important to devise brand strategy around consumer preference as today’s buyers are very informed and patient when it comes to product decision-making. Users these days check the ingredients of the product, its carbon footprint and health benefits, too.
Attractive merchandising: This is important when it comes to the sale and purchase of products. In this highly visual world, consumers purchase products that catches their eye. And if they like it, they will go for it again. So, FMCG companies must make sure that the packaging on display is impeccable.
Optimise marketing efforts: A digital strategy is needed to target customers, who have performed a search for products offered by the brand. With so much data available, it is imperative to hire a team to analyse current market demand for products and then generate authentic leads to convert them into sales.
Market intelligence and consumer insights: Any brand or company cannot stay in the market for long if it has not done a thorough research. A company, which is aware of the prevalent pattern, will mostly make decision to its benefit than otherwise. This will save them a lot of money as they will be able to get the right number of products out in the market for direct consumption, especially if the shelf-life of their products is not long. Organising consumer insights into data points helps companies predict the future consumer pattern and soar above their competitors.
(The writer is director of a food company)