FMCG’s digital ambition; not relying on supermarkets for promotion

As the rate of online transactions increase exponentially, the chances increasing sales through better conversion rates by making judicious use of the technology is at one’s disposal.

Emerging as one of the highest spending industries on digital media, FMCG’s 33 per cent of the spends are directed towards the digital budget. Incidentally, it is the largest percentage for video among all other advertising categories, according to DAN Digital Report 2019. Furthermore, FMCG brands spend 28% of their digital budgets on social media, and 24% on display.

However, with the plethora of advertisement options, the choice of promotion depends on the objective of the brand, communication, and the target group. “If we are targeting the younger generation, then it will be Instagram and Snapchat, whereas for the middle-aged audience, we will probably look at Facebook,” shares Mayank Shah, category head, Parle Products, spending 15 per cent of its budget on digital media.

Taking a route to FMCG revolution, the brands are finding a way to link market tactics with better sales performances.  But talking about how digital efforts are estimated in terms of ROI, there are a number of considerations taken into account. When measuring the magnitude of digital impact in terms of figures, the number of views or clicks on a page plays a crucial role.

Unlike other business verticals, FMCG largely rely on sales through offline mediums such as supermarkets or third- party retailers. It, however, has its drawback as the retailer, and not the FMCG manufacturer, is directly forming a relationship with the customers.

Unibic Foods, an international brand said they largely depended on social media to satiate their advertising needs. “People don’t come online to do research for our category, unlike automobile or consumer goods. We are not a million-dollar company but we are growing,” Iyer says. “However, that means we have to do things in media in a smarter way. Considering this, we look into OTT platforms as well, where we have the opportunity to connect with the buyer that matches the mindset we are looking for.” Talking about YouTube, she opines “YouTube is like an ocean and a brand could get lost there. “We do spend on Facebook though.”

With the shelf spaces finding increasing online presence, it is the right time for FMCG industry to upgrades its operations, and make them more adaptive to the digital environment.