FMCG is a highly competitive industry. Rapid and significant changes are occurring in the sector, whether in the household care, food & beverage, or personal durables industries. The FMCG industry has grown steadily over the last ten years because of customers’ desire to supplement their leisure or social experience with a physical shopping experience and the adoption of experience retailing.
At the end of the day, customers’ shifting purchasing patterns and the advancement of technology require a shift in how these FMCG businesses connect with them. So, with that in mind, here’s how FMCG businesses can prepare for the changes in the industry.
By Properly Organizing Warehouses
Proper warehouse organization is critical for FMCG businesses in fulfilling changing customer demands in 2023. Designating product placements or slotting must be well planned so that each order is processed and sent in the shortest time possible.
Identical selection, packaging, and shipping processes must be grouped. By employing such a technique, the time spent on handling and the internal flow of items is reduced to the absolute minimum. Furthermore, kitting, which consists of putting together product kits to gain economies of scale by removing intermediary stock, can also reduce time during product packaging.
Moreover, FMCG businesses should also utilize cross-docking. This supply logistics management strategy includes pooling resources among clients of the same supplier to manage raw material supply. Because all suppliers are in the same location, cross-docking minimizes transportation expenses and logistical procedures. This also reduces delivery times due to process simplification.
Automate the Supply Chain
When it comes to the realm of consumer goods, every second is valuable. Because of the volume of products FMCG businesses move every day, each link in the supply chain must be carefully considered and optimized to reduce risk. With this in mind, supply chain automation is a prime opportunity for considerable performance increases, particularly in warehouses.
Minimizing processing delays and hazards associated with human mistakes allow for considerable performance improvements. Warehouse automation also reduces the danger of accidents related to loaded pallet handling. However, a few requirements must be satisfied for automation to be a true performance booster.
The first is to utilize only the highest quality pallets. For instance, if a pallet breaks or jams machinery due to a flaw in a completely automated chain, the entire chain is disrupted. The repercussions include lost time, processing delays, and late delivery. All of this results in significant financial losses. In a nutshell, an automated supply chain is efficient.
Prioritize Customer Experience and Profitability
During difficult economic circumstances, merchants’ natural impulse is to cut prices. However, FMCG businesses must resist the temptation to utilize discounting as a customer acquisition, conversion, and retention strategy, which reduces profitability. In a weak economy, the smartest technique to enhance margins and profitability is to use AI to offer higher-margin items intelligently.
Topline growth will also be boosted by reducing benefits like free delivery and implementing more effective acquisition strategies. The days of never-ending discounts may be over until inflation is under control and the economy stabilizes. FMCG businesses that use this strategy will be far better off when this occurs.
Wrapping Up
The FMCG sector is probably one of the most competitive ones out there. However, this industry has a considerable opportunity for growth, granted you can overcome the existing challenges. Ultimately, the key issue here is to learn more about the sector’s dynamics and requirements and accurately assess and execute the appropriate tactics and plans.
