How will Technology Impact the FMCG Sector in 2024?

How will Technology Impact the FMCG Sector in 2024?

The role of technology in FMCG is significant in making the product life cycle of these goods simpler and more efficient. The cycle needs to be like a well-oiled machine in the world of Fast Moving Consumer Goods. After all, many stakeholders like suppliers, manufacturers, sellers, distributors, vendors, retailers, transporters, etc. rely on its smooth and efficient functioning.

Accurate and timely communication, efficient logistics, and consistent tracking will ensure that the product reaches the consumer's hands in time. Needless to say, this activity is tedious if done manually.

Tech Solutions to manage the FMCG Cycle

There are numerous tech solutions available in the market. However, here are two such solutions that need to be implemented by business.

1. Comprehensive Compliance Checks While Onboarding:

The transactions between the many stakeholders of the FMCG industry are endless. Every supplier, distributor and transporter must meet the terms and conditions set by the business owner. FMCG compliance is necessary for transparency, traceability, and accountability in a supply chain. Thus, business owners conduct exhaustive compliance checks for all the onboarded stakeholders.

This can be achieved through blockchain technology that offers a shared and secure record for transactions. By using blockchain, FMCG companies can effectively monitor and ensure that suppliers and distributors adhere to the agreed-upon terms and timelines. This implementation provides a transparent and real-time tracking system that significantly enhances compliance management in the supply chain.

AI-driven tools can also help reduce errors and improve efficiency while onboarding a new third party. These tools can automate the onboarding process by analysing vast amounts of data and checklists, such as AML, PEP and more, for compliance checks, thus reducing manual effort.

For conducting comprehensive compliance checks while onboarding stakeholders in the FMCG industry, here are key pointers for ensuring due diligence:

1. Conduct Thorough Background Checks: Verify the identity, history, and credibility of all stakeholders to assess their reliability and integrity. Having a D-U-N-S^® Registered^TM Seal (DRS) can be a visible indication that a business can be reliable. This seal stores verified and updated information about the business, thus allowing you to start your verification instantly.
2. Perform Risk Assessments: Evaluate the potential risks associated with each stakeholder, including financial, operational, and compliance risks, tailored to their role in the supply chain.
3. Implement Ongoing Monitoring: Continuously monitor stakeholders for compliance with terms and conditions, using technologies like blockchain for transparency and AI for efficiency in data analysis.

2. Supply Chain Technologies:

The supply chain process is the lifeline of the FMCG industry. Maintaining a consistent inventory stream that is aligned with consumer needs is a daunting task. Gone are the days when inventory management was done on paper.

Today, the supply chain is effortlessly managed by cloud-based solutions, where data is available at the click of a button. Cloud computing is used to streamline supply chain management, making it more agile and responsive to market changes. This, in turn, contributes to better operational efficiency.

Third-Party Risk and Compliance tools should be used to avoid any disruptions in the chain. These tools help select better suppliers, protect business continuity, and help create better supplier relationships. These tools also help in reducing risks to avoid disruptions in supply chain management.

Improving Efficiency at Every Level

Are these AI-based technological tools really important for FMCG businesses? In a word, yes. These tools can help understand market trends, boost revenue, increase ROI, help products reach customers faster, showcase brand credibility, etc.

1. Maximising ROI by Strategic Targeting: Data analytics and AI play a big role in strategic targeting and brand positioning. Business analytics and intelligence and AI algorithms can help analyse consumer behaviour, preferences, and market trends. This information helps develop targeted marketing strategies and personalised campaigns, maximising ROI. Businesses that aim to achieve higher returns, diversify their products and services or have a global presence, today have various tools at hand – from market sizing to identifying the buyers who are most likely to purchase. Anticipating consumer demands, businesses can be better prepared to launch effective marketing strategies and ensure successful product launches.
2. E-commerce and Direct-to-Consumer (DTC) Models: The practice of shopping, including window shopping, has extensively migrated to digital platforms. Globally, 79% of consumers shop online at least once a month. This shift offers a substantial opportunity for brands to expand beyond physical stores, leveraging their online presence to enhance product visibility and accessibility. This dual-channel approach allows brands to reach a broader audience and cater to the evolving shopping preferences of consumers. Easy payments and return policies also help consumers buy their desired products within the confines of their homes. E-commerce integration facilitates direct communication with consumers, helping in brand building and customer loyalty. Many social media platforms also help small businesses and entrepreneurs to showcase their products and connect with a targeted audience.
3. Showcasing Brand Credibility to Stakeholders: The FMCG sector is rampant with competition, and consumers are spoilt for choice. Today, consumers are not only concerned about product quality and pricing but also about the brand’s values and ethics. Sustaining the brand credibility requires showcasing the organisation’s commitment to sustainability, ethical practices, and corporate social responsibility. Many organisations contribute to local development, support humane causes, and adopt processes that promote sustainability and environmental preservation. Social media and other earned media channels are the most effective medium for communicating these initiatives. These channels not only allow for the dissemination of information but also foster engagement and interaction with consumers. The manner in which brands engage with their audience online is pivotal in building and reinforcing brand credibility. This digital engagement directly reflects the brand's values and commitment to its social and ethical responsibilities.

Final Thoughts

As technological development makes the FMCG processes simpler and more efficient, it can also be used to ensure seamless operation between stakeholders and consumers.

Innovative technologies such as blockchain and cloud computing can help in inventory management and transparency in the supply chain process. Furthermore, business intelligence and analytics help in understanding the brand's current performance and forecasting consumer demands.

Thus, new technologies can not only help meet the dynamic industry needs but also improve business operations and strategies. Staying updated with all these technological developments will help positively impact the FMCG sector in 2024.