Fast moving consumer goods manufacturing companies can thrive in the e-commerce market if they leverage the power of convenience. The digital age has accustomed customers to expect greater speed and ease of use, so manufacturers can focus on these factors to outperform the competition in an oversaturated market.
1. Increased Sales Opportunities
In a highly competitive industry like FMCG, consistently producing stock to correlate with fluctuations in demand is essential. Since goods are typically perishable, the timelines further constrict. On average, 70% of consumers will choose different brands when theirs is out of stock, accounting for thousands of dollars in lost sales opportunities.
Considering electronic data interchange system scalability is among the largest growth challenges facing FMCG businesses, outsourcing management responsibilities to an external third party could be beneficial. Overcoming the complexity of unstandardized electronic trading activity results in streamlined integration, leading to improved purchase orders and inventory tracking.
With more flexibility, manufacturers could translate their gains into consumer convenience. As a result, consumers can receive consistent e-commerce stock updates. The convenience of viewing accurate, real-time product availability incentivizes them to purchase more.
2. Greater Brand Differentiation
Industry experts believe e-commerce availability could increase FMCG sales by 11% by 2030. However, the oversaturation of the FMCG e-commerce market only sometimes drives loyalty for individual businesses, so manufacturers must differentiate themselves.
According to 2022 National Retail Federation research, over 90% of consumers choose businesses based on convenience. For example, easy-open seals on prepackaged food products could incentivize someone to repurchase the same item. Generally, outperforming the competition with successful brand differentiation leads to customer retention.
3. Lower Cart Abandonment
FMCG manufacturers selling directly to consumers on e-commerce platforms often need help with menu and checkout optimization. Since you must compete with retailers selling similar items, a streamlined customer experience is essential to ensure successful transactions.
While platforms often leverage algorithms to determine which business shows up to consumers, brands can succeed if they utilize convenience. Extended service times, faster delivery and more available options can secure a customer’s interest.
The global e-commerce cart abandonment rate is nearly 70% as of 2021. While product quality and price are significant deciding factors, most consumers base their decisions on the convenience of the checkout process. Low user friction incentivizes them to continue, reducing abandonment and improving sales.
4. Stronger Purchase Influence
Two-income households have become common because people have had to adapt to higher living costs. Accounting for every socioeconomic group around the globe, about 54% of women old enough to work have entered the workforce.
Since consumers have less free time, they highly value convenience. It influences their spending decisions — they often seek ease of use over quality or price. Since they have less time to cook, clean or deal with daily responsibilities, they see much more value in a purchase that will make their life easier.
5. Higher Profit Margins
People will generally pay more for something if it is easier to use than the alternatives. In a Forbes interview, one CEO said 70% of their consumers are willing to spend more for a more convenient customer experience.
FMCG manufacturers can work with distributors and retailers to lower the landing price and raise end-user prices, thus securing a higher profit margin. It is a simple way to increase your return on investment significantly and is an ideal approach since both parties benefit from the transaction.
6. Increased Sales
According to industry analysts, over 83% of adults in the United States will research products on their phones before making purchase decisions. Leveraging user data to offer online purchase recommendations guides their process and makes it more convenient for them.
The widespread implementation of mobile apps in the industry lets manufacturers monitor inventory and connect directly with consumers. According to one 2022 global survey, around 62% of respondents think leveraging data strategically is critical to the success of their business.
FCMG businesses with mobile-friendly e-commerce platforms routinely see more significant revenue than their counterparts because they tailor the customer experience. The profit potential is even greater if they are involved in the delivery process.
7. Increased Conversions
People seek convenience, so brands leveraging it will receive greater conversions. For example, FMCG e-commerce value grew by 72% in Eastern Europe between 2021 and 2022, likely because of its ease of use and accessibility. Those who capitalize on speed and ease of use will secure more customers.
Consider how nearly 70% of FMCG European consumers utilize flash delivery services to get their products. If they can secure their online order in minutes with one brand versus hours with another, it is clear who they will choose. Improving this process could increase conversions significantly.
FMCG manufacturers can secure conversion, retention and profit increases if they leverage convenience throughout the customer experience. If they work with distributors and retailers to lower landing prices and pass the difference to consumers, they can significantly increase their return on investment.