FMCG CRM: Fast Moving Consumer Goods for everyday life

When we think of fast-moving consumer goods, we intuitively think first of food and personal care or hygiene products. This differentiation also has a name. According to the Nielsen classification (US market research company), the food segment includes food, non-alcoholic and alcoholic beverages, and tobacco products. The so-called near-food segment, i.e., products that are “close” to food, etc., in terms of purchase frequency and thus also product turnover, includes, for example, personal care products and cosmetics, laundry detergents, cleaning agents, paper hygiene products, and pet supplies.

A Statista survey shows how important it is to consider FMCG individually: consumers in Germany spend more than € 230 billion annually on food, beverages, and tobacco products. This corresponds to approximately 14 percent (!) of total private consumer spending. In the near-food segment, the market volume is around € 14 billion. In view of these figures, fast-moving consumer goods can be considered a separate industry.

So far, so good. We already know that consumer goods manufacturers need to be subdivided further. Some goods that are used for private consumption need to be repurchased more often than others. Now we would like to take a closer look at the market structures of these goods, the FMCG.

The global players are none other than Nestlé, Procter & Gamble, PepsiCo, Unilever and Coca-Cola. Leading German FMCG manufacturers are Henkel, the Oetker Group and Beiersdorf, according to Statista. In Germany, the main shopping places for consumer goods for everyday use Discounters and hypermarkets. Discounters account for more than 40 percent of total food retail sales in Germany. 

At food retail there is a high concentration. Here in Germany, the following are divided four leading groups of companies about 70 percent of the market! These include the well-known large groups around Edeka, Rewe, Aldi and the Schwarz Group. Retail groups from abroad often failed because of these giants and their establishment on the German market. Growing market share on the other hand Drugstore chains in the food trade like dm and Rossmann. 

Not yet fully established in Germany, but still worth mentioning, is the role of the e-commerce in the FMCG sector. Here, too, the figures speak for themselves. The share of FMCG products in total online retail sales grew to around 8.7 percent in 2019. From a global perspective, Germany still has some catching up to do here, or in other words, the potential has not yet been fully exploited. Nevertheless, the possibility of ordering groceries online is used by around 3.65 million people in Germany every year.

Special demands require special measures

Due to the fast turnover, FMCG also have special requirements for sellers, which should mainly be reflected in the marketing and sales strategy. The market is highly competitive, but also highly profitable. Companies therefore invest immense sums in marketing and advertising – everyone wants to stand out, everyone wants market leadership. 

According to statistics, there are alone digital advertising spend for FMCG over half a billion euros in 2021. Traditional marketing channels are used as well as digital channels, especially social media channels such as Facebook, Instagram, Google and YouTube. TV, radio and newspaper advertising still play an important role, however. 

Brand strength and brand preferences have always been, and in almost every industry are, a success factor. It is no different with FMCG. On the contrary – these even play a particularly large role here. While this gives the established brands in the industry an advantage, it makes it all the more difficult for new players on the market.

Three major trends are currently emerging in FMCG marketing that need to be taken into account. It has taken a while, but the FMCG industry is now also on board with what digital growth and digital strategies addresses. Artificial intelligence, loyalty programs for strengthening customer relationships, and real-time customer engagement that is not only more personalized, but also more cross-channel oriented, are becoming enormously important. Basically, we are also talking about data- and insight-driven marketing. 

The keyword data-driven marketing brings us to trend two: data insights for FMCG companies are the main currency the future. Consumer information are the key to the kingdom. This is where many companies should continue to invest. Collecting such data analogously has long since ceased to be necessary. Tools for data analysis are usually included in software offers of ERP or CRM systems. You could also embed these on your website, for example! But also your social channels offer a wide field. The important thing is that a comprehensive picture of customers only makes sense when data from different sources is linked and viewed holistically. 

Furthermore, the data collected in-house can also be combined with external data from corresponding studies – with the aim, new, improved personas to develop. These should be revisited from time to time in marketing anyway. The time when you have collected enough consumer data is perfect for tackling this to-do. Personas generally help to identify the needs of different customer groups, optimize products based on this information, and ultimately improve product placement and marketing.

Eye-tracking methods are therefore extremely interesting. When customers stand in front of a shelf in a supermarket, eye tracking can be used to record their gaze. Which products do consumers linger over, at what height are they placed, and which products are ignored altogether? After all, it is no secret that in supermarkets, the most expensive products are often placed at eye level and thus in the perfect field of vision for consumers.

And now to the trend par excellence – sustainability and health. A healthy lifestyle and sustainable products are becoming increasingly important to consumers. Some companies are meeting these demands, while others are being pushed off the shelves. One conclusion remains: such issues must now come to the fore. Take the vegan industry as an example. New products are coming onto the market almost weekly, and the shelves with vegan food selections are getting bigger, more diverse, and more numerous. Other products that are less in demand are being pushed back. The same applies here. Listen to your customers and meet their needs.