FMCG Consulting / Grocery Supermarket Business Consulting
I) Challenges faced by FMCG Industry – Grocery Stores and Supermarket
#1. Inventory Management
One of the toughest challenges in the FMCG sector is inventory management. There are scores of product lines, varied packaging sizes, and hundreds of brands that constitute inventory. Keeping the records, timely entry into software, initiating and keeping track of orders, supplier management, physical counting, and other activities make inventory management a complex business function. Additionally, when there are inflationary pressures and sales slacken, dealing with perishable or slow-moving inventory becomes a real problem. Businesses need to have strong processes and software and automation solutions for inventory management.
#2. Brand Building and Customer Orientation
Brand building and maintaining strong context with the audience is important in the FMCG business sector. While the goal of marketing has always been to connect better, the way this reaches differs. It is critical to understand that there need to be new ways and opportunities for connecting with the consumer. Expert FMCG consulting experts reiterate that companies must establish trust in consumers and use different channels to build rapport and establish a relationship. Only then will they be able to power their brands and fuel growth.
#3. Grievance Management
Addressing customer problems and grievances in a timely way has become very important for the consumer goods business. Being in the field of FMCG consulting services, we consistently witness that in the present atmosphere of social media activity and transparency, bad reviews or ratings can damage a company’s reputation in seconds. The value of building a solid, trust-based relationship with customers involves solving their problems as quickly as possible and turning crises or complaints into opportunities for growth.
#4. Low Product Margins
Low margins on products and high operating cost has left businesses with no choice but to target volumes or it can bring the FMCG business down. We address these concerns via detailed margin assessments and merchandising strategies in our FMCG consulting services.
#5. Supply Chain and Logistics Management
Efficiency in logistics and supply chain is another core challenge for the supermarkets and FMCG sector. The nature of the FMCG sector means deliveries need to be carried out on a constant basis, with the capability to adapt to seasonal fluctuations whereby peaks can be as high as 400% yearly. Products also have a limited shelf life on account of the fragile or perishable nature and changes in customer tastes. This accounts for continued supply chain efficiency by streamlining processes to meet price expectations and economies of scale.
In our supermarket consulting services, we always stress that supply chain and logistics play a very vital role, especially for online grocery and online supermarket retailers, where logistics accounts for almost 45% of customer dissatisfaction reviews and the remaining 55% accounts for product and other service-related concerns. Thus, defining supermarket operations manuals (by professional supermarket consultants) for supply chain and logistics is not a choice, but a basic necessity for FMCG eCommerce.
Large enterprises need to work on their warehouses, operations and supply chains to remain competitive in a dynamic business environment to be able to continue serving their markets. The competitive edge of this approach can be seen in the FMCG warehouse operations of major companies. As retailers have restructured the supply chain, FMCG manufacturers carry higher stock volumes to manage demands in service levels. Optimising storage space efficiency has become a significant challenge, leading to advancements in new technologies like AGVS, ASRS, and mobile-device driven fulfilment solutions.
#6. Management of Fragile Goods
The FMCG sector also faces the challenge of managing fragile or perishable foods. Careful packaging and handling of delicate products are of critical importance here. In grocery store setups, many small retailers do not lay enough emphasis on this aspect. When damaged or expired goods are sold to customers unintentionally, it hurts the reputation of the business. We keep this aspect in consideration in our grocery store consulting services.
#6. CRM for Customer Retention
A highly competitive, dynamic business environment has necessitated that FMCG businesses focus on customer retention. Hence, the need is to build and maintain a one-to-one, lifelong relationship with a massive customer base is warranted. This has led to the emergence of CRM or customer relationship management. CRM is built on the philosophy of relationship marketing. It aims to create, develop, enhance and retain relationships with customers and enhance lifetime customer value and organizational profitability.
In supermarket business consulting services, our goal is also to improve customer experience and build a loyal customer base. CRM is a business strategy that can yield significant ROI for the FMCG industry. It adopts a customer-centric business approach to support effective sales, service and process and marketing. And it is not just for the big brands. Even in small grocery shop setups, retailers need to train their employees on front line behavior and handling grievances. Elevating clients’ customer experience is an important objective of our grocery store consulting services and supermarket consulting services.
#7. Adopting an Omni-Channel Approach
While going to set up a supermarket or departmental or grocery store, businesses need to also devise their channel and distribution strategies. What is equally critical at this juncture is that multiple customer voices across different online and offline channels must form part of an authentic brand narrative. An omnichannel approach encompasses website channels, e-commerce models, and traditional brick and mortar store frameworks and much more, so that integrated marketing communication is facilitated and customers have the choice of choosing an FMCG consulting provider on the channel they are most comfortable with. In supermarket business consulting, we help businesses in formulating and implementing their digital marketing strategies. With heightened complexities in starting and managing an omnichannel business, the expertise of retail and eCommerce supermarket consultants who understand how to expertly set up a supermarket or departmental or grocery store with omnichannel distribution proves to be helpful.
II) How YRC can help: FMCG Business Consulting Services
If you need to start an online grocery store or build your own supermarket retail chain, it’s time to choose an expert supermarket consultant or FMCG business consultant you can rely on. As CPG consultants, YRC has been a choice for many online and offline retailers, whether you need strategists well-versed in CPG business analytics or consumer goods supermarket expansion.
The competitive environment for the FMCG sector necessitates the need for reputed FMCG consultants. If you are wondering how to hire an FMCG consulting expert who can meet diverse requirements, please visit our website today to connect with one of our expert retail consultants. Your Retail Coach anticipates emerging trends and technologies as the future of the FMCG industry evolves. We deploy a team of expert supermarket business consultants in service design and delivery.
YRC assists organizations in the FMCG industry to leverage their brand value and build their business by ensuring campaigns, trade activities and sales systems are streamlined for maximum efficiency with the help of standard operating procedures for retail stores. Our team of retail operations consultants and supermarket business consultants ensure that strong reporting systems and retail process manuals are in place to help your FMCG business expand by monitoring the “Business 3-s” i.e. staff, stock and sales.
III) About FMCG Industry – Grocery Stores and Supermarket
FMCG stands for “Fast Moving Consumer Goods” and CPG stands for “Consumer Packaged Goods” sold or consumed on an everyday basis. Consumers have a critical role to play in the FMCG sector as price bands of every FMCG product depend on consumption. Persistent, continuous and strong growth in the herbal and natural product segments has further accelerated the pace at which new launches are made by leading FMCG firms. Economic liberalization and transparent policies have piloted the economy towards the free flow of fast-moving consumer goods. According to a Deloitte Report, the FMCG sector is one of the biggest drivers of global growth. The report further states the sector is set to grow at an impressive CAGR in the period from 2020-2023. So, if you are opening up a grocery mart or an online supermarket and wondering “how to start a supermarket business,” consider that while the avenue for growth is limitless, so are the challenges.
Changing lifestyles, growing incomes and easier access have all driven growth for this sector. The urban segment accounting for a revenue share of 55% is the largest contributor to the overall revenue generated by the Indian FMCG sector. Further, the retail market in India alone is estimated to reach USD 1.1 trillion by 2021, from USD 840 billion in 2017. This will boost revenues of the FMCG companies, as modern trade is growing by an average of 20-25 percent per year.
Fast-moving consumer goods comprise three basic sectors – food and beverages, which holds 19% of the sector’s revenue. Healthcare accounts for another 31% and household and personal care account for the remaining 50%.
The FMCG sector is poised to grow at a CAGR of 27.86 percent by 2021. FMCG companies are also poised to invest in energy-efficient plants and food parks for capacity expansion and acquisitions in the domestic markets. Investment in the FMCG sector centres around sugar, food processing, cosmetics, and paper pulp industries.
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