A lot of retail organizations in the FMCG sector today are forced to take drastic actions to remain afloat and thrive in the face of ever increasing, cut-throat competition. In order to survive in the current competitive era, the retail companies are cutting costs fast, reducing inventory levels, and tightening their supply chains.
That being said, most of the plans that are implemented by retail companies to boost productivity are not as effective. The typical approach consists of focusing on numbers without allocating time to find out the changing trends. In this article, we will take a look at some of the approaches that FMCG retail companies can take to boost their operations that result in improved productivity and sales.
1. Use Data to Plan Ahead
Many FMCG retail companies are run by persons who don’t know how to use data to plan their operations. What they need to succeed are technological tools that gather information on the target market and use that info to craft better price tactics, promotional activities, marketing mix, customer service, and product selection strategies. In other words, they should know how to use the tools to plan ahead and make better business decisions.
2. Focus on Adopting Latest Technology
The technological advances today have created opportunities for retailers to achieve better inventory control, a higher level of efficiency, and high customer satisfaction. Point of Sale (POS) software and hardware system has become more sophisticated that can be used to track accounting and sales data, inventory levels, and reduces human errors.
A number of technological tools are available that come with such features as improved loyalty programs, sales histories, ticket histories, gift registries, back orders, and even training modules and website hosting. The data presents limitless opportunities for companies to improve their operations and better align them with the preferences of the customers.
3. Innovative Cost Reduction Techniques
Reducing costs through traditional means such as labor cutting strategy is not effective in improving the prospects of the company. In fact, some experts say that cutting labor results hurts FMCG companies indirectly resulting in a decrease in sales.
What the company should focus on is to improve its operative efficiency that results in performing the same job at less cost. There are a number of avenues that the company can focus on to cut its costs. One way to decrease the cost is by reducing the input (purchase) relative to the output (sales). Another way to cut costs is to increase input in a way that raises the productivity of the company.
A company can also adopt efficient supply chain strategies to reduce costs. This requires that the company forms close bonds with the channel partners, and develops innovative solutions to revamp the channel strategy.
On a final note, the survival of FMCG retail companies depends on adopting strategies that help in getting an edge over the rivals. This requires that the company should be willing to think out-of-the-box and introduce innovative programs that help in reducing costs, increasing customer satisfaction, and boosting its competitive strengths.