#9 NEWSLETTER

Why is e-commerce becoming an increasingly important channel in the FMCG industry?

A trending topic in the fast-moving consumer goods (FMCG) world is e-grocery stores, also called online grocery stores. E-commerce provides consumers with the convenience of purchasing products 24/7. It helps to increase brand reach and provides a seamless experience for individual shoppers. Importantly, FMCG e-commerce provides a degree of independence, allowing brands to add more product lines, more payment options, and experiment with innovation without the constraints of retailer relationships.

While retail is still key, e-commerce is developing rapidly in virtually every industry, from food retailing to consumer electronics. It’s becoming increasingly common for consumers to purchase goods and services online instead of visiting a brick-and-mortar store. Online commerce has grown and is expected to continue to help FMCG brands increase sales and attract new customers. Thanks to direct contact with the customer (D2C), FMCG companies can more easily benefit in many different ways, including:

Product traceability

It's hard to track your product once it hits the shelves. While retailers are aware of how a brand is perceived by customers, manufacturers remain unaware. The D2C model fills a gap where companies have a better understanding of what customers perceive and more control over packaging messaging and marketing.

Building trust

Consumers who visit manufacturers' official websites have more confidence in manufacturers, and companies have a chance to gather valuable information.

Ability to reach customers better and faster

In the D2C model, companies can quickly reach consumers with their products compared to the traditional model. This also enables companies to earn higher profits as no middlemen are involved.

“Online grocery sales are projected to reach $250 billion (€237.1 billion) by 2025, highlighting how often consumers purchase their groceries and other essential items online.”

The use of AI and

big data

technology in

e-commerce

The use of AI in FMCG in e-commerce can contribute to an increase in profits, thanks to the automation of certain processes, sales efficiency, as well as better customer satisfaction thanks to the speed of operation and time savings. These and other ways can help improve the functionality of FMCG, including:

Sales performance

Artificial intelligence-based solutions can improve forecasting and targeting sales of FMCG products,
Sales efficiency can be increased by automating simple tasks,
The average basket value can be increased by using personal recommendations in newsletters.

Effective supply chain management

Artificial intelligence can be used in the supply chain management process. The process is quite complex as it involves a system of people, operations, technology, information, and logistics – all that is needed to move a product from supplier to customer. There is a range of information from which it must be derived, often shared by all organizational units and geographical locations – with historical and current data. The effects of potential errors include: out-of-stocks, delays, higher costs, high levels of waste, poor inventory management, and a lot of money lost.

Read now

“AI-powered solutions can improve a lot in FMCG supply chain – from process automation, through reduced redundancies, improved demand or supply forecasting, faster deliveries with more optimized routes to decision-making, and all these results in cost reduction.” Klaudia Tulwin

Better Use of Data in the FMCG Sector

Artificial intelligence has a lot of work in the FMCG industry due to the fact that there is a lot of present and historical data. AI can use data from multiple sources and build a knowledge store, which allows for more accurate predictions about the entire company and customers. Machine learning uses data (demographic patterns, behavioral patterns, purchase history) to learn and generate new rules for future business analytics. Such systems can help analysts deliver business solutions and forecasts.

Good use of data is crucial in the FMCG industry in many areas, such as:

launching a new product,
improving the customer journey (including good quality customer service and shopping experience),
sales forecasting,
product placement and many more.

To make improvements in these and other areas, you need to use your data and analyze it properly.

“$15.7 trillion - this is the global economic growth that artificial intelligence will provide by 2030, according to PwC research.”

Challenges for

e-commerce in

the FMCG industry

FMCG brands are challenged with various problems for example low-income DTC channels, problems with customer acquisition, delivering data-driven deals, and q-commerce.

Companies are attempting to sell existing retail products that incur high packaging and shipping costs, which forces them to reduce their profit margins. As a response, they're changing strategies, focusing on enhancing product details on their websites to compensate for the loss of attractive physical packaging in stores.

Additionally, they are re-engineering their product planning, sourcing, and manufacturing processes to align with direct-to-consumer (DTC) strategies. The main goal is to cut down on material costs while still adhering to sustainability standards across the supply chain.

The lack of historical data often makes it difficult for FMCG companies to gain a holistic view of consumer behavior and purchasing preferences. This encourages FMCG companies to increase their efforts to collect and consolidate real-time data by actively communicating with consumers through a variety of channels, including social media, email, SMS, and websites.

Delivery logistics in q-commerce

The logistics landscape in the rapidly growing q-commerce sector is being transformed by several interconnected trends and best practices that address the unique challenges faced by this industry. One of the most critical aspects of q-commerce logistics is achieving high visibility throughout the supply chain. By adopting the latest software and tools, businesses can access real-time data and maintain control over inventory, transport, and order tracking from the manufacturing unit to the end consumer.

Read now

As the industry evolves, the need for agility in the supply chain has become increasingly important. The ability to quickly adapt and respond to disruptions is crucial for Q-commerce logistics. By leveraging data-driven insights and implementing innovative technologies, FMCG companies can improve supply chain agility, providing them with the confidence that their goods will continue to flow smoothly despite unforeseen obstacles.

Sustainability is another key factor shaping the q-commerce logistics landscape. As this aspect becomes central to business strategies across sectors, the q-commerce industry must address its environmental impact. Initiatives such as reducing reliance on fossil fuels, utilizing biofuel alternatives, and partnering with eco-friendly logistic service providers can help FMCG companies align with sustainability goals and business objectives. These efforts contribute to the industry's long-term success and resonate with the growing consumer demand for environmentally responsible practices.

To ensure seamless product movement from the factory to the consumer's door, q-commerce businesses need to forge strong partnerships with integrated logistics providers. These partners not only support operations and growth ambitions but also offer tailored solutions and expertise in navigating the complex logistics landscape of q-commerce. By working closely with these partners, businesses can enhance the efficiency and resilience of their supply chains.

Read now

If you use Gmail on your browser, you may think that's the end of our newsletter. Nothing could be further from the truth!
Click "expand message" and keep reading!

1

E-commerce is becoming increasingly vital in the FMCG industry, as it offers convenience, increased brand reach, and a direct-to-consumer model, which allows for better product traceability, quicker customer reach, and trust-building with consumers.

2

The implementation of AI and big data technology in e-commerce has the potential to significantly improve sales performance, supply chain management, and data utilization in the FMCG sector, leading to more efficient and profitable businesses.

3

Q-commerce logistics presents unique challenges in achieving high visibility throughout the supply chain, ensuring agility, and embracing sustainability; forging strong partnerships with integrated logistics providers can enhance efficiency and resilience, contributing to the industry's long-term success.

Creatures responsible for this newsletter

Marianna Bieranowska

At Kreatik Marianna takes care of administration and organizational matters.
She not only ensures that the company’s documentation is meticulously managed and easily accessible, but also she is a dedicated supporter of project teams, assisting in their day-to-day tasks.
Organized and likes to set goals and achieve them diligently.
She is always eager to explore and expand her expertise in f.g. Excel and Power BI.

Antoni Leśniewski

At Kreatik, he manages a team of UX designers and actively develops as a designer.

He is responsible for creating usable, accessible, and innovative digital solutions based on user needs research, key business metrics, and knowledge of technology.

As a consumer behavior psychologist with 7 years of experience in the research industry, he loves to combine a scientific perspective, with creative work. Enthusiast of data-driven design, green UX, and difficult challenges.

Follow our social media

We are part of

Your personal information and your address are safe in our database. We do not pass them on to any other entities. You can unsubscribe from this list at any time. Simply<resignlink> click on the unsubscribe link</resignlink> in any of the emails we send you. The data administrator is KREATIK sp. z o. o., seated in Warsaw (00-867), ul. Chłodna 51. For more information see our - privacy policy.

Subscribe to our newsletter and get access to the Product Discovery Workbook! Put in your email address and grow with us! We promise to send only valuable content. No junk!

Check your email (also SPAM)
to complete subscription!