Once upon a time, the key to success for FMCG brands was their relationship with the retailer, as well as a genuinely good product. You took that good product, put it out on the high-street, and that alone could be enough.
It is far more complicated now. The fairytale is over. The increasing use of e-commerce has disrupted how a major FMCG brand should operate in the retail industry.
http://sclarita.com/wp-json/oembed/1.0/\"http:\/\/sclarita.com\/2016\/01\/06\/mayor-queue-top-two-or-new-blood\/embed\/\" The brands who aren’t thinking about utilizing digital channels, data and strategies to get through to the consumer, are finding it harder to sell. And with the multitude of digital platforms providing space for more voices, brand awareness is harder to improve than ever before.
The competition is fierce but the opportunity is great – if you make the most of it.
Naturally, bigger brands are turning to e-commerce to keep up with their competitors. Can major FMCG brands rely solely on e-commerce to foster the same success that a startup can?
PepsiCo has given http://adkbrothersltd.com/?p=2295 Drinkfinity the independence and freedom to operate like a startup company. The health-conscious and sustainable squash-style drink is designed to be sold entirely online on a global scale.
“With Drinkfinity, people can “Peel, Pop and Shake” to combine the dry and liquid ingredients contained in portable Pods with water in a specially designed, reusable, BPA-free Vessel, and create beverage blends in a variety of flavors.” – PepsiCo
The most crucial part of working directly with consumer data from online sales is flexibility. PepsiCo thinks their ability to act like a startup and react quickly to consumer insights is how they have been able to craft a successful product.
“It’s a different way from the traditional way PepsiCo does things. With products like Drinkfinity we can make changes. We can change formulas very fast, change the blends, adapt to consumer trends so we actually can have the luxury of allowing room for failure.”
As well as being marketed, produced and sold in a way the mirrors a start up model, Drinkfinity has been able to use consumer insights to better understand the product’s purpose and positioning. Drinkfinity has built its beverage brand around its consumer, using four key trends – choice, sustainability, wellness and personalisation.
From concept through to execution, PepsiCo has managed to foster a startup culture. This may see its e-commerce brand through to global success.
Do startup models always work for FMCG brands?
Alcoholic beverage behemoth, Diageo, admits it hasn’t found much success in following the startup model of ecommerce. Selling established FMCG products direct-to-customer online is challenging because these products are often part of a larger shopping experience.
By asking customer to individually shop for their products online, they’re disrupting the frictionless experience they have already worked towards. Imagine asking customer to suddenly schedule and pay for the delivery of each individual item on their shopping list – it simply doesn’t work.
Although they haven’t yet found success, it doesn’t mean they can’t learn from this experiment. For the first time, Diageo will now have first hand data about their customer. If they use these insights to inform their decisions going forward, they have a much better chance of making it work – if their partner Amazon doesn’t use that same insight, first…
Striking the balance
Diageo’s inability to crack the key to direct-to-consumer online sales is because they’re failing to see how startup culture can influence their entire brand. They haven’t implemented these ideas from the very beginning, and this is why they are struggling.
Taking just one piece of the evolving startup model and hoping it’ll recreate the same success isn’t enough. If FMCG brands want to move off of the shelf and onto the internet, they’ll need to think about if it will benefit the customer, more than it will benefit themselves.