FMCG Ecommerce: Everything You Need To Know.

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FMCG Ecommerce

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The fast-moving consumer goods (FMCG) industry is fiercely competitive, driven by the fast-moving nature of its products and fluctuating prices. There’s a constant battle for market share, whether the morning toothpaste or the evening snack. With the complexity of retail, many consumer goods brands begin by engaging in FMCG ecommerce.

In such a highly competitive environment, success hinges on implementing innovative FMCG marketing tactics and leveraging various business and sales channels.

Over the past decade, the internet has brought a revolutionary change in how people shop. Thanks to secure transaction systems, more and more individuals are opting to shop online, avoiding the hassle of going to physical stores to select items.

Due to this, FMCG ecommerce is blooming and has become necessary for an FMCG brand seeking success in this highly competitive industry.

This comprehensive guide will discuss FMCG ecommerce in detail, so keep reading if that interests you.

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The Current State of the FMCG Market

Before setting up an ecommerce store for your FMCG company, it is essential to understand the current state of the FMCG industry.

A deep understanding of the industry helps find new opportunities, understand how things work together, and overcome competition without wasting effort and resources to establish a presence.

Let’s take a closer look at some points to understand the current state of the FMCG market:

Market Size and Growth

According to an open source data source (allied market research), the global market size of FMCG was valued at $11,490.9 billion in 2021.

Keeping the rapid and consistent growth of the market in view, experts have forecasted that it will reach $18939 billion by 2031. Due to such a high market share, the FMCG industry is getting highly saturated.

Therefore, ensuring a solid online presence can help FMCG brands to survive this ever-growing competition.

Competitor Analysis

Detailed competitor analysis is the key to standing out since the FMCG market is growing and more brands are emerging.

Competitor analysis helps a newly starting FMCG company learn about the cracks and holes in its competitors’ marketing. FMCG brands can use this information as a window of opportunity to slide in and survive the tough competition.

Competitor analysis is the backbone of offline and online marketing; therefore, FMCG companies hire market research analysts, digital advertising companies, and search engine optimization (SEO) experts to formulate a strategy for their brand and help them run a successful FMCG ecommerce store.

Extensive keyword research increases the chances of success and helps get early results.

Consumer Behavior and Expectations

Monitoring and studying consumer behavior and expectations bring to the surface areas where your FMCG brand can improve. By understanding how consumers react to specific products, FMCG companies can pinpoint their product modifications and messaging according to their target customers’ needs and requirements.

By learning about the consumer’s expectations, companies can offer extra incentives such as deals, promos, and offers to build brand loyalty. Promotions also boost sales and capture market share.

For example, an FMCG company selling personal health care products in the immune system space may reduce its price during flu season to gain a competitive edge.

Creating An Effective FMCG Ecommerce Strategy

When it comes to selling FMCG products, there is a vast difference between an ecommerce store and a physical store. Both channels require different tactics and strategies to start and run the business uninterruptedly.

While ecommerce stores have more reach and can help generate more sales nationally and globally, it’s easy to start but more work to grow. It takes an effective strategy to start and run an FMCG ecommerce business.

Here are some tips that will help in developing a successful strategy for running an ecommerce store:

Business Objectives

A well-defined business objective is essential to a successful ecommerce strategy for your FMCG brand. It narrows the search space and helps provide a clear roadmap of the brand or company’s focus.

By setting Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) objectives, FMCG companies can ensure that their ecommerce strategy aligns with their overall goals and priorities.

For example, a company looking to increase its sales of a particular FMCG product must emphasize optimizing that product page rather than getting distracted by every opportunity that presents itself. Everything from how you present your FMCG packaging design to the color of your call-to-action button plays a role in how effectively you move people from consideration to purchase intent.

The brand may offer attractive discounts and improvise the checkout process to engage its audience and make the sales process more convenient for the highest-priority product.

Similarly, clear business objectives will help optimize the store for the target audience, whether b2b ecommerce or b2c.

Ecommerce Specific Objectives

Apart from crystal clear business objectives, FMCG ecommerce also needs ecommerce specific objectives for measuring online performance. These objectives aim to optimize various aspects of the online shopping experience and increase conversions, revenue, and customer satisfaction.

The following are examples of ecommerce specific objectives:

Increase Website Traffic: One of the primary objectives of an FMCG ecommerce strategy is to drive more traffic to the online store. FMCG brands can achieve this through various tactics such as search engine optimization (SEO), pay-per-click (PPC) advertising, social media marketing, and content marketing.

Improve Product Discoverability: Customers often need help finding the FMCG products they need because of the wide range of available SKUs and need clarification about how to navigate the website. To resolve this issue, ecommerce businesses should improve product discoverability by implementing advanced search options, personalized recommendations, and better product categorization.

Boost Customer Retention and Loyalty: In the FMCG industry, customer retention and loyalty are essential for long-term success. Ecommerce-specific objectives may focus on enhancing the post-purchase experience by offering personalized recommendations, loyalty programs, and excellent customer service to increase repeat purchases and customer lifetime value.

KPIs and Metrics for Success

Key performance indicators are metrics used to track and measure the performance of a campaign. It can be a real game changer in FMCG ecommerce if used correctly.

Numerous online tools are at our disposal, and among the most notable ones is Google Analytics. It can provide a collection of different features that help businesses in the FMCG sector track consumers based on age, gender, demographics, and even age.

One can set up a campaign using tools like Google Analytics to see how a fast-moving consumer good is performing. In addition, one can learn about the product’s popularity in specific areas using analytics.

The Impact of FMCG ecommerce on Traditional Retail Stores

The growth of FMCG ecommerce has significantly impacted traditional FMCG retail stores and distribution channels. As more customers shop online, physical stores and grocery stores that lack innovation have seen a decline in foot traffic and sales for certain FMCG categories.

However, FMCG brands use ecommerce to collect valuable data and support retail growth. By analyzing customer behavior and preferences online, brands can make informed decisions about product development, pricing, and marketing strategies.

They can also use ecommerce to test new products and promotions before launching them in physical stores. Ecommerce can help FMCG brands reach new customers and expand their distribution channels.

By selling products online, brands can reach customers needing access to physical stores or prefer the convenience of online shopping.

They can also partner with ecommerce platforms such as Amazon & Wayfair to reach a wider audience and increase brand visibility.

In addition, FMCG brands can use ecommerce to support their retail partners. By offering online ordering and fulfillment options, brands can help their retail partners streamline their supply chain and reduce costs.

They can also provide data and insights to help retailers optimize their in-store merchandising and marketing strategies.

Prioritizing Ecommerce Channels

FMCG companies must prioritize their channels to run a successful consumer packaged goods business online. Brands have multiple options available that they can utilize to promote, market, and sell their products.

Here are some of the available options:

  • Ecommerce platforms like Amazon, Walmart, and Target.
  • Direct-to-consumer (DTC) platforms, such as private ecommerce websites
  • Online retailers like Instacart, FreshDirect
  • Social media platforms like Facebook, Instagram, and Twitter

When evaluating these channels, it’s essential to consider the pros and cons of each option. For example, selling on Amazon can provide access to a large customer base but also comes with high fees and intense competition.

Selling on a DTC website can offer greater control over the customer experience, but it requires significant investment in website development and marketing.

After evaluating the different channels, brands should identify and prioritize the most effective channels for distribution based on their specific goals and target audience.

For example, a brand targeting millennials may prioritize social media channels like Instagram and TikTok. In contrast, a brand targeting busy parents may prioritize online retailers that offer fast and convenient delivery.

Supply Chain

Supply chain management is the heart of the FMCG business. It requires a strategic approach to managing inventory and logistics in FMCG ecommerce. Products must be available for purchase and delivery in a timely and cost-effectively.

Some strategies for managing inventory and logistics in FMCG ecommerce include:

Fulfillment centers: FMCG brands can establish fulfillment centers that they strategically locate to enable quick and cost-effective delivery to customers. Brands can operate fulfillment centers either in-house or outsourced to third-party logistics providers.

Inventory management systems: FMCG brands can implement inventory management systems that use real-time data to optimize inventory levels, reduce waste, and prevent stockouts. These systems can also help brands forecast demand and plan for seasonal fluctuations.

Last-mile delivery solutions: FMCG brands can partner with last-mile delivery providers like Uber Eats, Postmates, and DoorDash to deliver products directly to customers. Last-mile delivery can be handy for perishable goods that require fast and reliable delivery.

FMCG Ecommerce Marketing

Multiple ways of leveraging your ecommerce site for FMCG branding and marketing exist. One of the most common customer acquisition methods is search engine optimization.

However, since FMCG ecommerce is getting highly saturated, alternate channels such as social media marketing can be helpful for new businesses.

Establishing a social presence is more straightforward than on search engines like Google, Bing, and Yahoo.

The low barrier to discoverability is because consumers are more active on social media. Apart from that, all it takes is the strategy and engaging content. Apart from that, there are several tactics for using social media for marketing and business purposes.

Organic Social Media

Organic social media refers to free social traffic on different social media platforms. To gain organic traffic, social media marketers test and develop engaging content that resonates with the target audience’s interests.

For example, a chocolate brand usually creates engaging ads that promote celebration, love, and care to engage its target audience emotionally. This way, they don’t only engage the target audience but also get free advertising in the form of social shares.

Social Media Advertising

Another powerful feature of social media is their advertising campaigns. Companies design these social media algorithms to show relevant content to the target audience. For example, if you search for toothpaste online, you will likely find toothpaste-related ads and ads from local brands.

These use cookies and search history to optimize the ads. Social media advertising can be helpful for new FMCG brands who are stepping into ecommerce to boost FMCG sales.

Influencer Marketing

Apart from organic social traffic and paid advertisements, social media also provides the benefit of influencer marketing. It involves brands collaborating with online influencers, such as actors, vloggers, or comedians, in their products.

Influencer marketing is more powerful as social media influencers usually have a huge fan base. For example, Ronaldo promotes a product; it will reach millions of billions of people worldwide due to his vast fan base.

Due to its effectiveness, most FMCG companies in the health, fitness, and sports industry usually promote their products using influencer marketing.

Big Brand Playbook

Optimizing Product Pages and Listings

Now that we have discussed the importance of ecommerce in the FMCG industry, the next step is to learn about optimizing a landing page.

More than getting consumers to your product page is needed to capture the sale. Although it is a crucial step, that is just the tip of the iceberg. The next step is to engage them emotionally and help them decide to buy.

We can accomplish this with the help of a properly optimized landing page that provides what the consumer is looking for. Here are some steps to optimize landing pages for FMCG products.

Create Detailed and Accurate Product Descriptions: The first and most critical landing page aspect is the product information. Explain every product detail clearly and thoroughly. For example, describe all product aspects in a way the potential customer understands, with supporting visuals to bring the details to real life.

Highlighting Key Selling Points: Once the consumer finds out about the product, the next step is to provide him with unique point product points that convey your brand message and tell your consumer what sets the brand apart. There are many examples, such as fulfilling health-conscious customers’ dietary needs.

Using High-Quality Images and Videos: A picture is worth a thousand words. You should provide your audience with more than a block of text. Remember to grab their attention both verbally and visibly. You need to show various product features; such can be done with high-quality images and videos.

Customer Reviews & Feedback: Lastly, customer reviews and feedback should be available on an optimized landing page for FMCG products. Customer reviews give an extra sense of trust when making a purchase decision. Customer loyalty is a sign of successful business which comes with quality and care. As a result, they will leave feedback, which will be more helpful for you with time.

Streamlining the Checkout Process

Although the world has taken a complete digital transformation, some countries still need help in the checkout process. For example, not all countries have access to Paypal in the Asia Pacific region and other parts of the world.

To generate more sales and revenue, the payment and checkout process must be as easy as 1,2,3! There should be multiple payment options, except for risky payment methods such as “cash-on-delivery.” Instead, you can use a pay-over-time service for those who do not have the money available now.

A wide variety of payment methods enables everyone to purchase the product and increase brand trust. Also, since more people are online from mobile phones and tablets, the landing page and checkout process must be mobile-friendly.

Creating a Customer Retention Strategy

For FMCG ecommerce, creating a customer retention strategy involves developing tactics to encourage customers to continue purchasing products and to increase their lifetime value.

A loyalty program offers incentives to customers who continue to purchase products from the company. Your CRS can be in the form of reward points, exclusive discounts, or other benefits.

By implementing a loyalty program, FMCG ecommerce companies can encourage customers to keep returning and increase their lifetime value.

Apart from that, personalization is a critical element of the customer experience in FMCG ecommerce.

Companies can provide personalized recommendations and promotions tailored to each customer’s preferences and buying behavior by analyzing customer data.

Moreover, exceptional customer service is critical to any customer retention strategy. Testimonial-worthy customer service involves providing timely and helpful responses to customer inquiries and complaints and going above and beyond to resolve any issues that may arise.

By providing exceptional customer service, FMCG ecommerce companies can build trust and loyalty with their customers, leading to increased sales and higher lifetime value.

Implementing and Evaluating the Strategy

Implementing and evaluating strategy for customer retention and ecommerce involves several steps. Let’s discuss each step in detail to get a better understanding:

The first step involves launching the planned strategy. Hitting the launch button is the only way to determine whether a planned strategy will work. It must be introduced to the target consumer market and company staff. A well-trained stall will execute the planned strategy.

Monitoring and Analyzing Performance: After introducing the strategy to the market and the staff, the next step is to see how the planned strategy works. Set up key performance parameters tracking with tools like Google Analytics, Google Search Console, and website conversion tracking.

Making Necessary Adjustments and Improvements: After extracting promising datasets from the executed market strategy, analyze them carefully. This data can fine-tune the planned process according to the extracted info to match it with the market’s needs and boost online FMCG sales.

The Future of FMCG Ecommerce

We cannot overstate the importance of an FMCG ecommerce strategy. In today’s digital age, more and more consumers are turning to online shopping for their FMCG needs.

An effective ecommerce strategy can help FMCG companies to attract and retain customers, increase sales, and stay ahead of the competition.

As technology advances, new FMCG trends and innovations are emerging in ecommerce. Voice commerce, for example, is gaining traction as more consumers use voice assistants to make purchases.

AI chatbots are also becoming more sophisticated, providing personalized recommendations and customer service support. Modern technologies like ChatGPT have shaped online search as Bing has already incorporated it in their search engine while Google is still working.

FMCG ecommerce will continue to play a significant role in the future of retail. As consumer behavior and technology evolve, FMCG companies must adopt and refine their ecommerce strategies.

Stay current with emerging trends and technologies, using customer data and insights to drive decision-making and continuously evaluating and refining their strategies to improve customer retention and sales.

By doing so, FMCG companies can thrive in the digital age and meet the ever-changing needs of their customers.

Data-Driven Brand Development For FMCG Brands

Are you looking for an ideal strategy for your FMCG ecommerce business? If yes, then Smashbrands is your one-stop solution to all problems. We provide data-driven advice, from ecommerce strategy to successful advertising and traffic campaigns.

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