Big Data —The buzzword that seems to be changing the face of entire industries one piece of data at a time — but what does this mean for the FMCG sector?

Companies far and wide are taking advantage of the power of data to increase ROI and become overall smarter, savvier organisations.

Historically, despite the wealth of data available in the FMCG sector, the industry has lagged behind other niches in effectively using big data to optimise marketing efforts, cut costs and create more efficient processes — but things are changing.

It’s fair to say that big data analytics has opened up doors to new realms of possibilities for FMCG, and as companies in the sector begin to tap into the wealth of innovations big data has to offer, there’s a lot to be excited about. This post will dive into the impact of big data on FMCG, exploring three of its most game-changing effects on the industry. 

Let’s dig in...

1. Greater customer insights than ever before

Let’s face it, knowledge is power, and big data analytics is making it possible for FMCG companies to understand what really makes their customers tick.

The newest advances in big data provide FMCGs with the chance to obtain all-knowing, all-seeing superpowers...minus the x-ray vision. Sounds radical, but it’s true.

By obtaining individual purchase data through printing unique codes on packaging, it’s possible to track customers’ real-time behavioural and purchasing habits.

Simply put, companies can discover everything from how many times a day a consumer brushes their teeth, to knowing the exact time they usually eat lunch. Utilising big data has even enabled FMCG giants like Unilever to pick up customers’ location to tell whether they purchased during their hectic daily commute to the office, or during the even more hectic weekly shop with the family.

Through individual purchase data, FMCG companies are able to clearly separate fact from fiction and look beyond surveys, to truly understand how their customers behave. The process of linking promotions to individual purchase data allows brands to create intelligent promotions which are tailored to a specific customer in real-time.

Because promotional activity is geared around the individual rather than the masses, the task of getting customers to engage with promotions becomes all the easier. This personalised customer experience equates to tonnes of brand loyalty, often with nice sales figures to go with it.

One leading FMCG company is currently using this approach to generate a 74% increase in sales compared to their typical frequency of purchase. Similarly, Anchor Butter saw a 50% increase in active customers due to their highly relevant and responsive content, snagging them the IPM Gold Award for long-term loyalty.

2. A bullet-proof supply chain

In FMCG supply chain is the life-blood of the business. Fail to smoothly get your product from manufacturer to retail, and your sales are sure to crash and burn - not to mention your reputation. It’s no surprise that 83% of decision-makers in the industry rated ‘being out of stock’ as the number one pitfall when it comes to ROI. 

Big data analytics takes gut decision-making out of the highly futile supply chain process and allows FMCG executives to instead base their decisions on more accurate algorithms, analytics and data.

One way that FMCGs are using big data in supply chain is to optimise delivery networks.  Companies across the sector have been using geoanalytics to merge multiple delivery networks to create a faster more streamlined process. This not only helps to improve service accuracy, but it also eliminates the tedious wait times between stations — infamously one of the biggest pet-peeves in the industry.

Another way that big data analytics is creating a more efficient supply chain is through leading on the management of warehouses. Thanks to advances in technology, analysis of warehouse processes and facilities can be carried out in real-time. This includes identifying inventory levels, delivery mismatches and income deliveries; as well as the use of sensors to track machine performance.

Research by Accenture has also found that integrating big data analytics in operations leads to a 4.25x improvement in delivery times, with 46% of companies experiencing a 2.6x improvement in supply chain efficiency of 10% or more.

In addition to this, it has been found that FMCG companies that use big data analytics as part of their regular processes experience significantly faster supply chain processes than those who only use big data analytics on an ad hoc basis. Plus, a study by McKinsey and MIT reveals that FMCG companies that utilise big data analytics in their operations outperform their competitors by as much as 5% in productivity and 6% in profitability. Not too shabby.


3. Creating products that tick the box

With all the excitement around using big data to understand the customer better, FMCG companies like Nestlé, Coca-Cola, and Mondelēz are taking these insights a step further to develop shiny new product ranges.

Big data analysis techniques like data mining, intelligence tools and predictive analysis are revolutionising the way the industry develops products forever. Such technologies make it possible to analyse consumer interactions and develop products that directly cater to the customers’ needs.

FMCGs are also using optimisation models to make solid predictions about sales forecasts, product demand and ROI. Plus, other big data software can even be used help to facilitate distribution strategies by calculating the best product launch locations... A few of the many wonderful reasons why big data reigns in all things related to product creation.

When it comes to big data, it’s fair to say that Procter and Gamble (P&G) know a thing or two. They leverage aggregate consumer data to promote new products across a number of their product lines, and have even used big data modelling and simulation tools to cut the costs involved in traditional prototyping... Word has it that they’ve been getting some pretty good results too.

Big data analytics is clearly a game-changer for the FMCG industry. It has the power to transform huge volumes of data into actionable insights, and it’s accelerating the pace of innovation in the industry.

Now FMCGs have the opportunity to predict the unpredictable and this is setting switched-on businesses strides ahead of the competition. As time goes on and big data technologies continue to evolve, the FMCG sector will certainly be one to watch as a forerunner in big data best-practice.

Learn more about Big Data Analytics here.

Oletta Stewart

Content Writer

Oletta Stewart is a Content Writer for MHR Analytics.


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