FMCG (Fast Moving Consumer Goods)
Concerning the FMCG Sector or the FMCG Retail Industry
FMCG retailing: what is it?
The sale of groceries and other everyday or routinely consumed goods to retail customers through a variety of retail channels is known as FMCG retailing or grocery retailing. Local supermarkets, department shops, hypermarkets, department stores, and online retailers are among the companies that sell FMCG and CPG goods through these retail channels. However, it should be mentioned that food items are not the only commodities included in the category of fast-moving consumer goods. Other home goods like toiletries, stationery, cleaning and laundry supplies, over-the-counter medications, etc., can also be used. Food and beverage, healthcare, and household and personal care are the three primary sectors of the supermarket industry, also known as fast-moving consumer goods, or FMCG.
The Value of Retail FMCG
The average person can fulfill his everyday household needs because supermarkets, department stores, hypermarkets, and grocery stores are all within our (physical or virtual) grasp. From the most isolated town to the most urban metropolis, the convenience of fast-moving consumer goods (FMCG) retailing is a necessary service that makes our daily lives possible. The 2020–21 pandemic served as a sobering reminder of this fact.
FMCG Retailing as a Successful Sector and Enterprise
With a few notable exceptions, the demand for FMCG products has never declined throughout history. FMCG is a thriving industry, and its retailing is a dependable business opportunity due to the population’s constant growth and urbanization. As we provide grocery store consulting services, we have often observed that every urban locality or its environs now has a number of grocery stores. Within the FMCG sector or industry,
if we talk about the big cities and towns, there are more departmental stores and supermarkets than ever. Purely eCommerce-based retailing in the form of quick commerce, dark stores or eGrocery stores is also on the rise in the urban FMCG markets. International FMCG retailing brands are going global and setting up stores in other countries. But all these aspects also make FMCG retailing a competitive space. The competition has gone cross-channel and FMCG and supermarket consultants know this. Being in the field of FMCG and supermarket business consulting, we could say that there is no permanent solution to counter competition. Our team of supermarket business consultants recommend focusing on business model development.
FMCG Retailing's Future
Some fundamental fields of work, including as operations management, business planning, business modeling, customer orientation, the use of digital and industrial technologies, channel strategy, etc., will continue to be important in the future. Improving these components to better fit the modern business climate of the FMCG and retail industries is what has changed and will continue to evolve over time. For example, Omnichannel is poised to become the norm in the retail FMCG sector. Customers would be surprised if a department shop, for example, did not provide them with the ease of a smooth multi-channel experience. This will be comparable to how we currently feel when a large retail establishment does not accept digital payments. Cross-channel standards have also become relevant in the FMCG industry, where cross-channel competition is already beginning to emerge. Quick commerce retailing’s ability to deliver within 15 to 30 minutes makes other channel players susceptible to these criteria.
Obstacles in the Retail FMCG Sector
Competition Across Channels
Consulting professionals in the FMCG sector concur that cross-channel rivalry affects all FMCG retail businesses. eCommerce is now being used by physical stores. If they don’t, they risk losing market share to online competitors who have the proper operations, planning, and strategy. All online retailers, including eGrocery stores and dark stores, find it difficult to gain market share in physical FMCG stores. And this covers both national and international brands that have some sort of local presence. The D2C method has been embraced by numerous FMCG manufacturers.
However, their performance does not have an effect when using the independent eCommerce method, even when it generally works effectively with traditional distribution strategies. This also applies to department stores and supermarkets that are profitable in the physical storefront format inside the FMCG industry. There is nothing wrong with seeking outside help from a seasoned department store or supermarket consultant in these circumstances.
Fast-Commerce FMCG Companies
Global FMCG consultants may have different opinions, but despite the hoopla surrounding Q-Commerce’s launch, its growth trajectory has fallen short of expectations. One of their biggest challenges has been logistics and operational planning and tactics. Q-commerce is feasible in urban FMCG markets with high population densities, which restricts the amount of regions they may target. It is quite difficult to meet such tight delivery deadlines in large cities due to traffic congestion. Many facets of society frequently express concerns about the safety of the delivery partners who are out on the road trying to meet these delivery deadlines. All other channel operators are nevertheless being threatened by Q-commerce FMCG selling.
Positioning of Brands
Due to the uniformity of goods and services, FMCG retailers face difficulties in establishing their brands. According to TRS, which has extensive experience providing grocery consulting services, this also holds true for neighborhood grocery stores who have limited opportunities to set themselves apart from rivals in the same area. The same is true for any new supermarkets entering a market, regardless of whether they operate online, in physical stores, or multichannel. Conversely, regardless of the distribution method, the major brands have a competitive advantage in terms of brand positioning. They can get clients more easily because of their current level of customer awareness. They can also produce large sales and provide more pricing options because they are present in several markets. That makes it much easier for them to market their brands.
Supply Chain Upheavals in the Production and Distribution of FMCG
Businesses in the manufacturing and retailing of fast-moving consumer goods rely on efficient supply chains, production, and logistics. They are not involved in any of these tasks; manufacturers, distributors, and logistics service providers do them. Retail sales of FMCG products are impacted by any poor management on the part of these organizations. For instance, an FMCG manufacturer’s capacity to create and meet demand is impacted when it is unable to get raw materials on time.
Retail FMCG stores are therefore forced to either keep their shelves bare or stock them with different brands or goods. If this kind of poor management persists, they might possibly lose clients. Increases in energy prices, demonstrations in the transportation sector, the effects of tax changes, disputes over interstate regulations, etc., can also cause supply chain disruptions. Furthermore, FMCG consultants are powerless in this situation.
Coordinated Inventory Control
For synchronized inventory management in the FMCG sector, all supply chain participants—from manufacturing to retail—must collaborate with a particular level of accuracy. It is impossible for a manufacturer to ship more merchandise than its distributors can manage. The same holds true for retailers and distributors. We frequently observe in grocery consulting services that most small and medium-sized businesses have little room for stocking and merchandising. Retailers in the FMCG industry, however, also need to be aware that distributors take longer to fulfill their repurchase requests. This time required, which also depends on the products’ availability, delivery, and simplicity of manufacture, must be accurately estimated by them. This is one of the reasons why a lot of seasoned supermarket business advisors emphasize how crucial expert inventory management is, even for small and medium-sized enterprises.
Consumers' Preference for Name-Brand Items
Retail consumers are always drawn to well-known and branded goods. There aren’t many active brands in any one product sector. For instance, Nestlé dominates the global infant cereal market. Everyone is aware of this, including the FMCG consulting specialists. In the past, Nestlé’s products have been strongly associated with consumers worldwide. Retailers are forced to choose this brand in this specific category. A corporation can set the margins when it has a strong position in a market with little to no competition. This holds true for every well-known brand. Because of their unwavering popularity and demand, retailers are forced to carry certain brands’ items even with smaller profit margins. We also observe in grocery consulting services that small-scale retailers are less excited about displaying such products due to a limited customer base and shop space.
Unjustified Price Increase
As seasoned FMCG consultants, we consistently believe that local markets are affected by the price strategies used by market leaders at the macro level. When their products are identical, many successful local firms copy the price tactics of the leading domestic brands. Customers do not benefit from any unjustified price increase without a commensurate value addition by any business, whether it is a local brand or an MNC. The breadth of margin flexibilities is created by such approaches. Retailers may find it appealing as it allows them to provide deals with greater flexibility. However, no one benefits when all retailers use the same tactic. Retailers in a certain market sell the same goods under the same brand at somewhat different costs. This presents consumers with a questionable picture of how FMCG businesses and retailers are billing them. As experts in supermarket consulting, we are aware that this also applies to supermarkets.
Stores, warehouses, and distribution centers with poor layouts
Inefficient use of valuable space, whether in a store, warehouse, or distribution center, is the first curse of a poorly designed plan. Experts in FMCG consultancy concur that until a retailer has a well-planned layout, they will never fully realize its potential. Retailers can stock more items in their stores with a well-designed layout. It guarantees that shoppers and employees walk through the stores with ease. Customers find the purchasing experience easier as a result. For instance, a store’s entrance shouldn’t be blocked by the checkout counter.
Such inquiries are reduced when appropriate banners that give shoppers direction are used in a store or supermarket. Experts in supermarket consulting understand the importance of a well-designed layout plan for grocery chains and other large-format retail establishments. When figuring out how to set up a supermarket, layout planning is a crucial step. The vast majority of retail establishments, nevertheless, continue to function independently of modern retail management norms. The industry’s overall performance suffers as a result. Because of this, our work as supermarket consultants and FMCG business consultants is both fascinating and difficult.
Why TRS
Consulting for the FMCG Sector | Supermarket Consulting | Grocery Store Business Consulting
We have over ten years of expertise as grocery consultants for retail and eCommerce businesses. Over the years, we’ve worked with numerous clients across various industry sectors . Our services and solutions address the distinct and particular business needs of all retail and eCommerce brands and businesses, ranging from market research and business planning to retail supermarket chain operations management and audit procedures. TRS provides services in South Africa, the Middle East, and India, which has additional expansion projects planned. A sample of our FMCG business consulting services is shown here, along with how we may assist new grocery businesses and existing supermarkets in redefining their operations, planning, and strategies to become a modern and competitive brand.
Our consulting services for FMCG companies assist them in creating distinctive and competitive supermarket business models that effectively combat cross-channel competition in their target markets. Based on a thorough analysis of the company’s advantages and disadvantages, our retail store grocery experts develop distinctive value propositions. In a competitive market, these evaluations greatly aid FMCG companies in establishing the proper brand positioning. In order for clients to understand how the UVP could be developed and delivered, they will also map the value chain and internal capabilities requirements.
In order to grow and expand, many traditional physical grocery stores plan to switch to a larger structure. Our FMCG sector consulting services can help launch a supermarket or transform an existing supermarket business into an omnichannel, big format, chain, or delivery business model, depending on client goals and market potential. We offer all of our business consulting services for supermarkets and retail establishments based on how well they work for initiatives like these. An experienced and committed group of FMCG business consultants or supermarket consultants is hired to handle the full service design and delivery process, from the creation of supermarket business plans and business models to their execution.
One of our main offerings is the creation and execution of retail SOPs, which also includes our consulting services for FMCG, supermarkets, and grocery stores. Here, our team of grocery business experts places all of a client’s operational activities inside a predetermined and planned framework. SOPs are used to specify every procedure and operation. Nothing remains outside the definitions’ purview. Therefore, no operational action is ever unplanned. Every process is outlined in terms of the work flow, roles and duties, performance criteria to be upheld, and deadlines to be met, regardless of whether it is an internal activity like inventory management or an external activity like CRM.
We also design and provide such services and solutions if any FMCG retail client has particular needs. For instance, several businesses aim to enhance the layout and appearance of their food stores and warehouses. Our grocery store design specialists do thorough evaluations of the available space and coordinate them with the planning of inventory purchases. In our experience as supermarket consultants, we have also observed that, in order to guarantee the best possible use of available space, it is occasionally necessary to develop specific SOPs for supermarkets, even in tiny areas.
Send us a message via our website if you would like more information about our services, such as business consulting for grocery stores, supermarkets, dark stores, FMCG omnichannel, and FMCG business consulting services for both physical and online businesses. We will also respond to any questions you may have for our team of FMCG retail business consultants.
FAQs
Why create a SOP for the grocery store industry?
Retail stores must implement standard operating procedures to guarantee seamless operations and cut down on process failures by 25%. Error rates are reduced by 85% when SOPs are supported by IT-integrated procedures. If expansion is planned without clearly established SOPs, the retail business is at a high risk of failing. There is little to no time left for top level management to concentrate on expansion since they are too occupied with day-to-day operations, which take up 70% of their time.
How to develop a retail supermarket chain business? OR How to develop a grocery chain business?
1. Effective Middle Level Administration at HO
2. Technology to facilitate operations in the supply chain
3. SOPs to ensure a uniform experience in every store
4. Effective supply chain management
Contact TRS professionals right now to learn more!
How can a grocery delivery business be started?
1. Quick delivery, from 10 minutes to a maximum of 45 minutes
2. SKUs that are not available for online delivery
3. Weight and quantity are taken into account for every delivery order.
4. Delivery method: delivery vehicle or bicycle
5. Delivery distance
How may a grocery business be started online? OR How can a supermarket e-commerce business be started?
laying out the four essential steps for launching an internet grocery business.
First Step: Business Model
Step 2: Layout of the Dark Store
Step 3: Designing the Organogram and SOP
Step 4: Software Integration & Mobile App Development
For both online and offline businesses, are you looking for supermarket consultants? How should your gorcery consultant be evaluated?
From ideation to market research, strategy and operations, to market strategy and recruitment, supermarket consultants will help you along the way.
When choosing a supermarket consultant, keep the following points in mind:
1. Total years spent consulting in supermarkets
2. Do they possess knowledge of the business models of both online and physical supermarkets?
3. Do they have a team? Because a grocery store consultant working alone is more likely to fail at a project.
4. Have they worked in a variety of models, such as high-street, organic, premium, small, medium, and large?
5. They will comprehend the systems and supply chain operations if they have experience working with retail chain clients.
6. Since you are spending your money based on their suggestions, fees should be the final consideration rather than the primary one when selecting a consultant. Obtain a rough estimate of consulting rates and, if you have a strict budget, share it.
How should a new food shop be planned?
Seven important things to think about when starting a grocery store or supermarket :
- The business model.
- The finalization of the product category.
- Layout planning.
- Organization structure.
- Standard operating procedures (SOPs).
- Software evaluation and selection.
- SOP training.
How can I build up a supermarket distribution center or a grocery warehouse from distribution?
Four essential pillars support the establishment of a supermarket distribution center or grocery warehouse, which boosts output and lowers operating expenses:
1. Layout of the Warehouse
2. Integration of the Warehouse Management System (WMS)
3. SOPs for warehouses
4. Planning for the grocery supply chain
wish to open a grocery store, both online and off. How is TRS able to assist?
TRS can help to develop offline, online and hybrid (omnichannel) grocery business.
TRS has worked across various supermarket business models in 10+ countries.
In the process of opening a new grocery store or supermarket. In what ways may TRS assist?
TRS has 10+ years experience in supermarket consulting. TRS has devised a 7-step process to start a new supermarket.
How can my supermarket business expand?
Consumer behavior has evolved significantly since COVID-19. Supermarket operations have evolved. Things will significantly change as Gen X and Gen Alpha become major grocery buyers, so stores need to start the transition now and prepare to accommodate the shifting consumer preferences.
Suggestions for supermarkets looking to expand:
1. By becoming “omnichannel,” supermarkets can boost sales.
2. Make your grocery store your “Dark Store.”
3. Maintain devoted clients and gain a competitive advantage
4. Go Omnichannel with Technology:
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