Things have changed in the last decade in the world of FMCG marketing.
By Blackdog - 3 months ago
‘Fast-moving-consumer-goods’. Even the term provoked a feeling of activity and energy. And for years the sector has often been considered the pinnacle of a marketer’s career.
In 2021, FMCG brands made up 23 of the top 100 brands globally, delivering a return of 15% to shareholders for some 45 years.
But to coin a recently over-used phrase, the ‘new normal’ is a vastly different landscape and there are a host of new challenges that face the industry. Seems a new take on marketing of these brands is in order too.
Half a century of history and billions of pounds of sales aren’t enough to keep established FMCG brands at the forefront of minds anymore.
A myriad of factors have changed the playing field and made it a much more competitive landscape:
Digital Marketing’s Growing Prominence
Digital marketing has of course transformed the way FMCG brands market for over a decade, and the channel is only ever going to become more dominant. Mass marketing in print and TV, for years the favoured method of captivating consumers, is dwindling in its reach.
Bar the big boys of FMCG, many brands don’t have a strong pedigree when it comes to digital marketing, with senior marketing executives not well-versed in the minutiae of the discipline. Lack of data can also be a problem, with FMCG brands foregoing such information in return for higher sales volume with retailers as the primary focus. This trade-off is coming back to bite them however, with a lack of data hamstringing digital marketing efforts.
Weakening Brand Loyalty
In the U.S., a Nielsen study found that only 9% of consumers consider themselves brand loyal. That’s a kick in the teeth for brands hoping that people are hanging onto every word they say on the hot social topics of the day, or avidly waiting for news on a new sku in a brand’s portfolio being launched. In fact brand boredom can be a thing. Young people in particular are often not ‘feeling it’ with brand love. Millennials are four times more likely than baby boomers to avoid buying products from the so-called big food companies for example.
Of course, online shopping means there is a huge and often baffling amount of choice for people. That means it’s easy for a consumer to find and buy a competitor’s product, comparing price and value with yours at a click. With competition being hotter than ever, captivating their attention is more important than ever. Luckily there’s an agency to help with that. Who knew eh? More on that later.
With the rise of social and other channels it’s never been easier for challenger brands to pop up and have a pop at the mainstream ones.
And Direct-to-Consumer brands (DTC) can be a concern for established brands that haven’t had the direct relationship with consumers that the new kids on the block do.
DTC brands can leverage first-party data and stretch marketing budgets to create personalised high-ROI digital advertising campaigns that steal consumers away from established brands, with less of a reliance on retailers to showcase their wares.
It’s tough out there. So here are our five strategies for FMCG brands to Captivate People and grow sales.
1. Build Direct Relationships
Retail sales will always be vital for FMCG brands, but building direct revenue channels with people will allow brands to compete with DTC challenger brands and win back some market share. Direct sales lead to quality first-party consumer data, allowing personalisation at a high level. The more data a brand has, the more profitable marketing campaigns will be in the long term.
2. Create Consumer Communities
Brands shouldn’t just build sales channels directly with consumers, they should boost brand engagement by building communities, too. Email and social media are key channels that FMCG brands should leverage to strengthen consumer relationships and compete with digitally native brands that thrive on channels like Instagram.
3. Work with Influencers
FMCG brands continue to undervalue the importance of influencers compared to other digitally native brands. This must change going forward.
Research by Kroll has found influencer marketing to be a double-edged sword for FMCG brands. A massive 85% of brands have reported suffering a loss of up to $250,000 because of negative interactions with influencers. Despite this, the majority of brands plan to increase investment in influencer marketing. Almost half (46%) said they would spend between a third and half of their marketing budgets on influencers.
One strategy to minimise any negative impact from influencer marketing is to work with micro-influencers as opposed to celebrities. These individuals may only have followings that number in the thousands, but their audiences are often incredibly engaged. Moreover, they are often easier to work with than bigger names and will take compensation based on results.
4. Occupy More of the Digital Shelf
Maximising physical retail space is simply a matter of working with six or so of the country’s biggest retailers. Doing the same online is significantly harder. FMCG brands will need to leverage several strategies and channels to put their products front and centre.
One strategy is to create their own sales channels, as discussed above. That’s not enough on its own, however. SEO will be vital to ensure their store ranks in Google, so will paid advertising on the search engine and social media platforms like Facebook and Instagram.
Brands may also want to leverage Amazon’s position as the de facto eCommerce platform in the UK. The Everything Store accounted for 30% of the UK eCommerce market in 2019, making it the first and last place many people go shopping online. FMCG brands may not get data when they sell on Amazon, but the platform will definitely increase sales and boost brand awareness.
5. Don’t Forget About In-Store Branding and Experiential Marketing
While growing their digital presence is vital, established FMCG brands will still want to play to their strengths. Supermarkets and other in-person retailers will still play an important role in consumers’ lives going forward, and FMCG brands should look to strengthen their existing advantage in these areas wherever possible.
Get your marketing strategy on the right track by working with one of the leading FMCG marketing agencies. Here at Blackdog, we create online and offline campaigns that captivate people for multinational brands every day— the kind that help FMCG brands boost recognition, grow brand loyalty and overcome challenger brands. Make it an unfair playing field once again by speaking to one of our consultants today.