Meeting the challenges of FMCG thanks to Location Intelligence
Writen by Ángela ·
Nearly everybody from the developing to the developed countries is entitled to the fast moving goods. They are the small scale purchases we make at the grocery stand, supermarkets to malls. Although the profit margin from these goods is low, the volume of sales makes up for it. High volume, high rotation, low price, huge network and distribution from the headquarters to the POS are the defining words that lift the FMCG sector, simultaneously making it complex for us to understand the workflow involved.
In reference to the European market, the volume of the FMCG products is increasing year-on-year. A few European countries such as Germany, the Netherlands and Spain have shown an increase in the value from the previous year’s (first quarter of 2016). For example, Spain has shown an increase of 1.4% in the first quarter of 2016, while Greece has shown a decrease of 8.7% from the previous year’s value. More statistics can be deciphered from the graph below:
A few global trends of the consumer packaged goods in 2017:
- The rapid technological advancements and swift changes in consumers tastes and preferences have changed the way the FMCG sectors operate worldwide.
- The massive population growth and an increase in consumer spending have been the underpinning factors behind the profitability of the FMCG sector. However, this is not the case anymore. The growth in North America and Western Europe are currently plummeting.
- Five factors such as inevitable consumer preferences, evolving geopolitical environment, alternative personal consumption patterns, technological innovations and structural industry shift will affect the manoeuvre with which the FMCG sector moves forward.
The different FMCG needs
The needs underlying within this sector are detected in all the subdivisions from the Consumer Packaged Goods (CPG), Retailers, and Distributors.
CPG: The executives involved in this division have various needs. But, out of all the needs, the prime importance is levied on the market prospecting and salesforce managing.
- Pain points: coping and understanding the changing consumer needs and acting accordingly. Consolidating all the data and information from the retailers to improvise the products and strategies.
RETAILERS: the need in this division is similar to the CPG division. However, the retailers and executives here would need an efficient system to forecast the demand, product allocation and sales tracking. Only then, they will be effectively able to transfer information regarding products, sales and demand to the CPG department.
- Pain points: data consolidation is also detected here. Managing the different points of sale is a burning problem.
DISTRIBUTORS: The need for an effective location to adopt efficient transport network to control and manage the demand & supply.
- Pain points: optimising the routing and logistics. Choosing and planning a location for the supply centre.
Location Intelligence to fast-yet-efficiently-move the FMCG sector
Location Intelligence, an emerging simple yet powerful business tool, helps the FMCG sector to stand afloat in areas such as routing and logistics, salesforce and territory management.
- In the territory management, the integration of Location Intelligence into the business strategies helps in identifying the optimal coverage per product (helps the executives in adopting the right product mix) and the gap in the market (to introduce new product). The technology also helps in spotting the right Points of Sale to carry out the marketing and communication campaigns.
- In routing & logistics, Location Intelligence helps in choosing the right location that balances the supply and the demand of the products. The location is chosen after giving a deep study of the demographics in the area and understanding the demand per product. This further enables the executives to choose a location central to both the supplier and the retailers. Furthermore, it also helps in demand forecasting per POS. Based on the demand, the executives can then allocate resources in each POS as per the exact needs.
- Salesforce can massively benefit from Location Intelligence. It updates the team with the latest information about the POS characteristic and the product performance. Also, the technology tells the salesforce on which area to focus on based on the product coverage and performances.
- In the FMCG sector, Location Intelligence is widely used by the Demand Planner and the Sales directors to evaluate a list of locations and choose the most profitable one.
For example, Geoblink‘s software offering location intelligence solutions for the retail, real estate and consumer goods sectors allows management to see in an instant all its points of sale and to classify them in a moment according to criteria of its choice.
It then becomes almost instantaneous to carry out an analysis of the brand and to find the factors acting on its network. Indeed it is possible for each point of sale to access in one click to sociodemographic and behavioral of the zone where it is located.