FMCG marketers have, over the decades, been traditionally mass media-heavy in terms of their marketing investments. They have perfected the science of mass media like no other product category or industry in the world. Also, their share of digital spend in the marketing mix has been increasing over the last few years and it is only set to increase in the coming years. However, with the rise of the digital consumer, steady increase in online purchase influence is leading to offline sales due to penetration of the internet and mobile, hence, it is necessary to rethink how they will need to influence and engage with these consumers.

According to a recent report, the internet will influence $11 billion of total sales in the FMCG sector for beauty and hygiene products by 2020. To put this in perspective, this represents two-thirds of beauty and hygiene sales of $17 billion in 2020. It is expected that 130 million Indians will buy beauty and hygiene products online by 2020, making the internet a prominent sales channel with 20 per cent of estimated total sales of $ 3 billion. Besides, the number of online shoppers in India will continue to grow, reaching 250 million, or 40 per cent of all internet users, by 2020. Given this, how should FMCG companies rethink digital?

The way digital has been treated globally in the FMCG marketing mix is always as one more new medium. Hence, it is largely communication-mindset driven and not distribution-mindset driven. Mostly, the focus has been on digital presence of a business’ offline communication, ideas-led rather than engagement-led. How does one, therefore, re-imagine digital in this context?

Treat online as offline: If online shopping is increasing, then customer visits represent an opportunity for FMCG brands to be present there. Consumers may not buy the brands but it acts like an online shelf space where they need to be present and be available. Also, being a digital medium, the brands that can be placed on these online shelf spaces can be flexible and contextual. If a customer is buying fashion apparel, then the relevant brands need to be positioned next to these online shelves. The FMCG brands can invite customers to ask for more information, urge them to download mobile apps, request coupons, drive trials and such. Imagine being present in every market area and outlet — that will be the digital strategy thinking that needs to be brought to play. FMCG marketers know this the best.

Convert digital presence into conversations: If presence in online marketplaces was the first objective and key metrics were designed to assess the percentage of brands’ presence, the next objective is to see how to convert presence into conversations. Normally, most often, in the offline world, dominating shelf space leads to purchases.

In the digital world, online shelf space must lead to moving into the device basket and then to the shopping basket. This, therefore, converts into having a direct two-way dialogue with consumers. Digital enables ongoing connections using a range of channels and platforms — via mobile, social and CRM through useful services and utilities delivered on mobile. This enables personalised dialogue across multiple interest areas, bridging the audience’s passion with the brand objectives.

Leverage the big data eco-system: Big data creates big engagement opportunities for FMCG brands. Conversations can be contextual and intelligent – based on a host of third-party APIs. For example, if it was a sunscreen brand, using the weather APIs, I would intelligently engage in conversation through the mobile app. The brand could provide contextual advice, recommend solutions and during the course of the conversation request trial and purchase. Also, location data can be used effectively to recommend customers to nearest stores where they are doing their promotions or even inform these customers about the new promotional offers.

Similarly, mobile-based platforms to connect distributors and retailers to leverage B2B digital opportunities can be unique for the Indian marketplace.

Re-imagining the last mile in the FMCG journey: Often, there is a gap in the last mile data between the retailer and consumer’s offtake. If digital is able to bridge this last mile for FMCG marketers, it can be transformational in terms of digital distribution for various categories. There are interesting digital innovations that are possible here. Very little has been done to date, as modern retail still contributes a small percentage of the overall share of sales. There are interesting cross-learning opportunities to be inspired by — for example, how digital banking has changed the way consumers do their banking transactions and investments today.

Digital can create ‘connected customer experiences’ right through the consumer buying cycle for FMCG companies and it is imperative to re-imagine digital in this new context.

S SWAMINATHAN, CO-FOUNDER & CEO, HANSA CEQUITY

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