From Shelves to Screens
FMCG is sailing the OCEAN with Platform Approach
Queen : Magic mirror on the wall, who is the fairest one of all?
Magic Mirror : Famed is thy beauty, Majesty. But hold, a lovely maid I see. Rags cannot hide her gentle grace. Alas, she is more fair than thee.
Platforms weave magic, transforming brands from rags to riches. Platforms unleash the ocean of possibilities for small brands, hoisting small brands' sails and guiding them to new shores. With digital shelves and screens, they ride the waves of global visibility, empowering growth and fostering fierce competition.Shelves and screens are the dynamic duo enticing shoppers and creating an immersive shopping experience.
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DTW
During the Week, Hindustan Unilever Limited’s former CEO and MD Sanjiv Mehta bid goodbye to the FMCG major and handed over the baton to Rohit Jawa. In August 2021, HUL had tried a collaboration with Pizza Hut to to offer Kwality Wall’s ice cream and desserts to its dine-in as well as the delivery across owned and aggregator platforms.
Hindustan Unilever saw the opportunity where Quick commerce can open up the gates for a huge push to in-home consumption of ice-creams as desserts and is already partnering heavily with Swiggy and Zomato for its latest project called “Ice Cream Now”.
I have written about the frenemy relationship of Platforms and Brands including FMCG brands over multiple newsletters
Platforms and Brands
It took Apple approximately 25 weeks during the Covid19 pandemic to add ONE Thousand Billion Dollars to its market cap. In the same time period, I added approximately ONE Thousand Subscribers for my weekly newsletter. So, if it is of any consolation to you, you are like a Billion Dollar for me ! Do not ask for CASH ! And if you are thinking of Brand bui…
Solving ABCD of D2C Brands
Direct to Consumers or D2C brands are the current flavour of VCs and Entrepreneur. I wrote about the frenemy relationship of Platforms and Brands and more specifically Amazon and D2C Brands in previous newsletters. As per the Business Standard report
D2C Brands and Amazon. Frenemies?
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I would like to visualise the FMCG and Platform relationship through the lens of OCEAN- Operational Efficiency, Customer Reach, Enhanced Analytics, Adaptability and New Revenue Streams.
O - Operational Efficiency: Platforms offer FMCG businesses the opportunity to enhance their operational efficiency through streamlined processes, automated inventory management, and optimized logistics. ITC Limited, a prominent Indian FMCG company, has implemented AI-powered demand forecasting systems to optimize its supply chain. ITC has created Sixth Sense, marketing command centre, where digital tools are deployed to observe the key trends, issues, needs, and concerns on people’s minds through social media forums. By analyzing historical sales data, weather patterns, and market trends, ITC can accurately predict demand for its FMCG products, leading to improved inventory management and operational efficiency.
C - Customer Reach: Platforms provide FMCG businesses with a broader customer reach, allowing them to connect with a larger audience and tap into new markets. For example, Amazon runs an export program called Amazon Global Selling over one lakh sellers ship products to more than 200 countries. Aggregator platforms like Amazon offer a user-friendly and convenient shopping experience. Customers can browse through various FMCG brands, compare products, read reviews, and make purchases within a single platform. This streamlined shopping experience encourages customer engagement and can lead to increased sales for FMCG brands.
E - Enhanced Analytics: Platforms enable FMCG businesses to access advanced analytics and insights, providing valuable data on consumer behavior, preferences, and trends. This information can be leveraged to make data-driven decisions and enhance marketing strategies.
A - Adaptability: FMCG businesses operating on platforms have the opportunity to adapt and respond quickly to changing market dynamics, consumer demands, and emerging trends. Platforms offer flexibility and agility in adjusting product offerings, pricing strategies, and distribution channels. Mamaearth, an Indian personal care brand, leverages AI algorithms to analyze consumer feedback and adapt its product formulations. By gathering insights on consumer preferences, concerns, and ingredient preferences, Mamaearth has optimized its product offerings to cater to evolving customer needs.
N - New Revenue Streams: Platforms open doors to new revenue streams for FMCG businesses. These can include advertising opportunities, cross-selling or upselling products, and partnering with complementary brands or services on the platform. Aggregator platforms may suggest complementary or related products to customers based on their purchase history or browsing behavior. FMCG brands can benefit from these cross-selling opportunities by offering bundled deals or partnering with other brands on the platform. This strategy allows FMCG brands to reach new customers who may be interested in their products based on their previous purchases.
FMCG companies' use of social media platforms is a double edged sword. Advantages include the ability to reach a wider target audience, engagement with consumers in real-time, and leverage targeted advertising. Social media platforms also allows for interactive and hyperlocal/ personalized marketing campaigns, fostering brand loyalty and customer feedback. However, disadvantages include criticisms of misleading advertising, influencer marketing ethics, perpetuation of unrealistic beauty standards, privacy concerns, and negative impacts on mental health. To address these issues, FMCG companies need to prioritize transparency, responsible practices, data security, and promoting positive messaging while leveraging the benefits of social media for their marketing strategies.
Here is my favourite example of of my favourite activist’s use of social media platforms to highlight Unilever’s controversial action.
It cuts both ways!
To conclude, Indian FMCG players can leverage operational efficiency, customer reach, enhanced analytics, adaptability, and new revenue streams fostered by multiple platforms to enhance consumer satisfaction, drive sustainable growth, and deliver value to its stakeholders.
OTW
Over the Weekend, I reread parts of an amazing book Working Backwards on Insights, Stories and Secrets from Inside Amazon by Colin Bryar and Bill Carr. Amongst the lessons that any company including FMCG could learn from Amazon relates to Customer Obsession. Every enterprise should embrace Amazon's customer-centric approach and prioritize customer satisfaction. They must understand the target audience, their needs, and preferences to deliver products and experiences that meet their expectations. The best way to execute this vision is to start with the customer and Work Backwards i.e. begin by envisioning the ideal customer experience and then align your strategy, product development, and marketing efforts accordingly.
Like we have discussed earlier, Amazon has a significant relationship with FMCG (Fast-Moving Consumer Goods) companies as a prominent e-commerce platform. However, it's worth noting that the relationship between Amazon and FMCG companies is not without challenges. Some FMCG brands have expressed concerns about counterfeit products, price competition, and the influence Amazon has over pricing and product visibility on its platform. Additionally, FMCG companies need to carefully manage their brand presence on Amazon to ensure consistent messaging, pricing integrity, and protection against unauthorized sellers.
Overall, the relationship between Amazon and FMCG companies is multi-faceted, offering opportunities for increased sales, customer reach, and data-driven insights, while also presenting challenges that require careful management and strategic decision-making by FMCG brands.
I Love You
Shailendra
OTM
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The consumption grows for things that are not really required thanks to the ease of purchase through these platforms. Ten years from now, they will be the greatest contributors of pollution. Watch out.