Consumers can afford to be selective in this era where information about products are accessible with a few clicks of the mouse or on the mobile phone. We now can choose what suits us best in terms of offers, price, features, and how the brand we use reflects our lifestyle and image.
FMCG brands which have been around for decades and which are mostly present in grocery stores and supermarkets now find themselves competing with new brands that are increasingly tech-savvy and versatile.
So how can FMCG brands remain relevant?
- Stay relevant; don’t lose meaning and purpose
Consumers buy from brands they feel they can relate to. They don’t just buy functional products. They buy the “why” of a brand. For example, Unilever wants all its brands to reduce their environmental footprint and increase their positive social impact. Its ‘Sustainable Living’ brands are those that are furthest ahead on this journey and combine a strong social or environmental purpose. In 2016, 18 of its top 40 brands were considered sustainable, up from 12 the year before.
2. Rise to the Challenge
Coconut water in packets might be growing in popularity but it is still a relatively niche product. Compare that to other soft drinks, such as juice, where penetration is above 50% and it’s clear coconut water is still just a small player in the market. For example, Vita Coco has grown quickly by positioning itself as a “lighthearted and engaging brand” instead of “preaching” to consumers about its health credentials. That doesn’t mean it isn’t proud of those, though.
That current campaign is Vita Coca’s first foray onto national TV as it looks to double household penetration and raise awareness among health-conscious consumers. The multimillion pound ‘Reach for the Beach’ campaign will run for four months over summer and include out-of-home, digital, experiential and PR activity.
3. Face the Future
Complacency is a killer. Just because something worked in the past does not mean it will work in the future. Far too often, brands rest on the laurels of their heritage. The most successful consumer goods brands continuously innovate while keeping one eye on today and the other on tomorrow.Know what made your brand successful in the first place; these are a brand’s foundation.
In a world where barriers to entry are at an all time low and consumers have more choice than ever before, being in pole position can be a dangerous game.
When brands expand to global markets, they need to remember that the norms are different. In Africa, Guinness changed its recipe to include local ingredients, which fostered a sense of localism for the brand, created a unique taste and also made the product more suited to the budgets of the local population. In largely-Muslim Indonesia and Malaysia, Sunsilk created a product specifically for hijabs – Hijab Recharge – which was immensely popular in a community where the majority of women wear the hijab.
4. Banking on your niche market
Niche brands use online sales to “pre-launch” products and even define their key demographic / target audience, after which they can tailor their marketing. For the millennial consumer, technology is integral to how they shop, and more than 50% are more likely to trust blogs, sites, and applications for advice over their friends.
Niche brands are also more agile, and have the ability to spot market trends and tap into (sometimes quite esoteric) consumer insights, turning these into new products or range extensions in short order. Smaller brands can evolve and change with shifting market conditions. A niche brand can remain relevant by staying on the front foot, never letting a reliance on global distribution networks stand in the way of innovation or losing sight of their brand ethos.
Established brands may not be able to fully emulate the small-scale agility of niche brands, but they can use the shift they have created in consumers’ expectations to rethink and reinvigorate their brand, becoming more consumer-centric and ultimately accessing new audiences.
Gillette addressed this issue in response to the incredibly successful launch of Dollar Shave Club (DSC), with the launch of Gillette Shave Club. While the DSC subscription-based service didn’t pose a real threat to Gillette’s 70 percent share of the global blades and razors market, this challenger brand did force Gillette to rethink their ability to reach price-conscious consumers. By using new distribution channels, Gillette were able to deliver a quality razor in a way that they perhaps hadn’t considered possible without eroding brand value.
5. Don’t ignore the Baby Boomers
It’s the fastest-growing market and also has huge spending power. As these individuals become increasingly tech savvy, more and more are turning to third-party reviews and fellow consumer feedback to inform purchases.
Boomers ranked researching and shopping as the third and fourth most important online activities (following news consumption and social media), according to the 2015 State of the User Experience report from Limelight Networks.
Their spending power is likely going to escalate, and possibly in windfall ways. The online retail marketing to this group should therefore be aspirational, geared toward lifetime-moment purchases such as travel, artwork, special jewelry and home improvements. DIY chains such as Lowe’s and Home Depot could dedicate full online pages to empty nester dream-home designs and ideas. Tiffany can dedicate online pages to feature 30th, 40th and 50th anniversary gifts.
Older consumers may be more likely to enroll in subscription services for the convenience, for example. That’s a window for meal kit suppliers, including supermarkets, as well as online providers of razors and eyewear.