Leveraging the benefits and understanding the challenges

Leveraging the benefits and understanding the challenges

Amit Samsukha, Director and CTO, EmizenTeche-commerce consultant, skilled in improvising IT infrastructure.

The past few years have seen many technological changes in the fast-moving consumer goods (FMCG) industry. Over time, several factors catalyzed these changes.

FMCG is a product segment that people consume daily and multiple times a day. The industry is expected to reach more than $15 trillion by 2025. The registered CAGR is 5.4% between 2018 and 2025. At the same time, the Covid-19 pandemic has caused a change in which people rely more on online media. According to Statista, the online share of the global FMCG market will rise to 10% by 2025 from just 5.1% in 2018.

Smartphone apps have played a big role in making the industry technology-driven. Whether it’s supply chain management, stakeholder management, inventory ordering, demand forecasting, creating new online stores or product searches, there are apps for everything.

How are mobile apps transforming the FMCG industry?

Mobile apps are transforming the FMCG industry in the following ways.

1. Better customer retention

With modern mobile applications, companies in the FMCG sector have experienced a greater connection with their customers. By getting customer feedback on certain products, companies can make the necessary improvements to better serve their customers.

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2. Intelligent inventory management

Like most large industries, the FMCG industry involves multiple transactions for seamless supply. Modern inventory management applications help you keep a complete record of manufactured, delivered, stored and sold inventory in one place. Thus, a company’s supply chain can be greatly streamlined.

3. The beginning of location-based marketing

Mobile app technology has introduced a new marketing concept: location-based marketing. Location-based marketing only targets people near your store to send them relevant offers and incentives. Since customers are nearby, there is a higher chance that they will visit the store.

4. Convenience

Smartphone mobile applications have increased convenience in the FMCG industry in many ways. Manufacturers have an easier way to record production units and quantities. Suppliers are free from manual inventory tracking. Customers don’t even need to visit stores as delivery apps bring their orders to their doorsteps.

5. Payment solutions

In the FMCG industry, the supply chain is broad with many stakeholders. Each interaction results in a monetary transaction. Apps that offer payment solutions have simplified and accelerated the process, enabling instant, reliable and recorded financial transactions.

How are local businesses taking advantage?

Here are some ways mobile apps can help FMCG businesses become more successful.

1. Affordable and effective marketing

The cost of printing or broadcasting ads can be prohibitive for some small business owners. Modern mobile apps offer an affordable and efficient option for the desktop. From now on, shopkeepers can connect with people nearby via their smartphones.

2. Home delivery

The modern food delivery app has become a great partner for local stores. Through partnerships, store owners can take online customer orders and have them delivered to their homes. The ability to fulfill online orders expands the operating boundaries of local stores and can multiply daily sales.

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3. Online stores

Modern applications offer many opportunities for companies to cross geographical boundaries and appear in other markets. One of the best ways to do this is to provide an online store.

4. Digital payments

Digital payment options have reduced the handling of large amounts of cash and the potential for consumer fraud. Thus, digital payment applications have made monetary transactions safer and easier to manage.

Today’s challenges in the landscape

There is no denying that mobile applications play a significant role in the development of the FMCG industry. Still, some challenges are slowing the transition.

1. Lack of technological exposure

Some people living in rural or low-income areas, as well as the elderly, do not know how to use smartphones or do not have access to them.

2. Security Threats

No technology should be blindly trusted. Security threats can create important information threats within any business.

3. Lack of resources

Most business development apps are not free and not all FMCG retailers can afford them. In addition, expanding businesses with online tools requires additional human resources that not all small businesses have access to.

4. Consumer habits

Some people like to do things traditionally. The transition to digital applications seems like an overly burdensome task for them, so they hesitate to take the automation step.

5. Increased cost

Sellers may have to raise prices or charge fees to cover mobile technology adoption costs, and this may turn off end consumers who don’t want to pay more when they can buy directly in-store.

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A possible future landscape

According to Statista, in developing countries like India, 54% of the population owned a smartphone in 2020, and this number is expected to rise to 96% by 2040. As smartphones become more common, awareness of mobile apps will increase, and so on. their use in business.

Since the risk of hacking and data leakage has also increased, new security measures are introduced over time. Data protection solutions such as intrusion detection and prevention systems, anti-virus solutions, data loss prevention and multi-factor authentication have made digital systems more reliable and secure.

I expect that in the not-too-distant future, all FMCG businesses, large and small, will be using mobile apps to streamline processes and better serve customers.

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