Business Insights 02 Apr 18

The digital landscape has been undergoing massive transformation in the past year than it did in the past decade in the traditional and online retail space. Most FMCG organizations in India does not lack data but the ability to link it to marketing activities and business outcomes. As a result, it has placed the retail industry at a significant disadvantage with respect to other business models. Owing to this scenario, retailers are more adoptive of newer technologies such as Sales Force Automation and Digital Payment services. Although the FMCG industry has been slow to embrace this change, the global retail sector in the past couple years has immensely benefited from utilizing Data Analytics and Digitization.

The potential of big data is such that they will change the way businesses look at data today. In fact, the global market for big data is predicted to increase its spends on its technology services to $40bn in 2018. The Analytics industry in India seem quite interesting that requires deep digging of data to arrive at unique and contextual trends.

Big Data Industry in India

Big Data refers to the capability of handling gargantuan amount of data in various formats, integrate them in businesses to secure growth and simplify data patterns in business. According to K.S Viswanathan, VP – NASSCOM, the big data sector is expected to grow at a CAGR of 26% over the next 5 years, expected to reach a value of $16bn by 2025. In fact, by 2025, India will have a 32% share in the global market.

Some of the industries that has witnessed a tremendous implementation of big data across industries are FMCG, Banking and Public Health.

Indian Retail Sector

The global sector has not only augmented its revenues and cost structures, but also created disruptions in the industry that are positive in nature such as operational efficiencies and profitability. Being one of the fastest growing sectors in the Indian economy, FMCG revenues reached USD 49bn in 2016-17.

A recent study by FICCI, in association with PWC, states that retailers must use analytics to generate in-depth insights across the value chain of their operations. This includes procurement, supply chain, sales and marketing, store operations and customer management. FMCG brands in India however, needs to define their market requirements to adopt the best suited analytical strategies. Medium and large-scale companies are significantly spending on sales technology tools such as SFA to gain a better foothold in the market, improved productivity levels, enhanced distribution strategy and augmented revenues. Data Analytics is a critical part of FieldAssist SFA solution that not only provides sales insights but also provides an integrated view of the entire sales process and marketing initiatives of an organization. A recent report created by the Research and Content team at FieldAssist suggest that there’s an average growth of 17-22% in productivity levels of the field force post SFA deployment clocked by our top 50% FMCG customers.

Real time sales data and analytics is one of the prime determinants of SFA adoption by FMCG and CPG industry in India today. It is a powerful tool that provides a clear visibility of the retail realities on ground.

With rising incomes and urbanization among other factors, the FMCG industry is expected to grow at 3.6X (220-240 Bn USD) by 2025 as suggested by BCG CII report. The report also states that 40% of FMCG product consumption will be driven digitally in India translating to a value of $45 billion by 2025.

As an SFA offering, how does Data Analytics help the FMCG industry?

Supply Chain Insights Inventory Management Revenue Success Insights
Beat Map Optimization Insights Customer Insights Sales Insights
In-store Marketing Insights Location Targeting Pricing Insights

Making Sense of available data to business outcome

The potential of such data is tremendous and if used wisely, can transform the way businesses are managed. As the retail surge takes over the country, it is a rather known fact that rural market is fast growing at a CAGR of 3-4% and there’s a rising demand for fast moving products at a pace that goods such as oil, toothpaste, soap etc amounts to nearly 50% market share for big brands today. The fact that the capital expenditure by rural consumers is 63,500 crores against 49,500 crores by urban consumers is indicative of the growth rate and participation of the rural population. FMCG industry operates in the rural sector through a wide distribution network and covers their market through “Kirana” stores.

These Kirana stores in the Indian context makes up nearly 98% of retail store coverage and 85% business in the retail space. Hence, understanding basket trends and consumer behaviour through structured data prompts businesses to achieve accurate insights to make informed sales decisions. A BCG report also states that 60% digital payments will be driven by local kirana shops and unorganized retail by 2020.

Touching upon critical areas of managing retail stores, let’s look at what analytics can do for couple of business challenges:

S No. Insight Variables Business Challenges Solutions provided by Analytics

1

In-Store Analytics

Owing to over dependence on manual data and secondary information, businesses have little or no information on what variant and sizes of value packs do their customers want to buy during special occasions Accurate analysis provides marketers store wise, region wise product performance such that businesses gain actionable insights to modify their pricing, promotion or placement strategies.

2

Customer Buying Behavior

Lack of customer data doesn’t reflect buyer needs, preferences and sentiments towards a product or promotion. Hence, sales strategies are not capable of incorporating such crucial variables during planning stage. Data driven application provide customer service history with respect to promotions such that marketers gain insight into individual needs and preferences and build targeted strategies to induce better buying behaviour.

3

Inventory Management

Unavailability of data is unable to determine demand shifts or slow-downs in sales. Data analytics help retailers react faster to competition and help in SKU allocation by recognizing signals of demand shifts and other economic factors

4

Location Mapping

Route optimization is a distant feasibility for FMCGs since they do not have visibility on the field force movement. Hence lower productivity levels An automated sales force tool that monitors, control and optimize your on -ground sales operations and capture field data

 

Data Analytic solutions uncover interesting statistics while providing direction in areas such as store layout, navigation, promotions, inventory management and strengthening store conversion rates. By leveraging data analytics and technology solutions, marketers can intelligently determine the most profitable and satisfying experience for the end user. A massive rise in digital adoption therefore ensure that brands improve their point-of-sale marketing, customize products to suit regional preferences and simplify the retail ecosystem operations.

Through its wide array of solutions and offerings, FieldAssist can assist organizations to deal with these and other operational challenges through the use of analytics, allowing access to accurate business intelligence in simplified formats to enable them to make real time and meaningful business decisions.

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