Unlocking the Potential of Data Analytics in the FMCG Sector
Fast-Moving Consumer Goods (FMCG) and manufacturing in Australia faces a unique set of challenges. From intense competition and slim profit margins, to evolving consumer preferences - navigating this landscape requires the use of accurate, timely and trusted data to make informed decisions.
In this article, we will look at the projected growth in Australia's FMCG industry over the next 12 months. Exploring how data can be used to address challenges such as demand forecasting uncertainty, precision in demand forecasting, operational inefficiencies and quality management.
Australia’s FMCG Outlook: Growth in 2024
According to Deloitte in the latest edition of Deloitte Access Economics’ Retail Forecasts total real retail turnover is expected to rise from -0.7% across calendar year 2023 to 1.3% in calendar 2024.
This expected return to growth is attributed to increased consumer spending and a positive shift in real wage growth.
“This return to growth would be spurred by more people and also more open wallets. As inflation continues to track down there is expected to be a point in 2024 where real wage growth becomes positive again,” Deloitte Access Economics partner and principal report author, David Rumbens said.
While not a boom, this positive trend signals an improvement in the economic landscape, offering potential benefits to both consumers and retailers.
“The anticipation of sales growing once again may allow consumer and retailer sentiment to start improving towards the end of 2023,” he said.
With FMCG tracking up in 2024, let’s explore how leveraging data analytics can address the top challenges faced by manufacturers, turning obstacles into opportunities and maximising growth.
FMCG Industry Challenges vs Data Analytics Solutions
Will Khan, Notitia’s Melbourne-based Data Analytics Lead says that data analytics is key to FMCG business growth strategy in 2024.
"Data insights solve a raft of challenges that FMCG businesses face such as unpredictability and fluctuations in market trends, operational inefficiencies and product adaptation," Will says.
"However, it first requires a deep understanding of the business needs and overarching challenges, to ensure that the data analytics solutions have meaningful and tangible impact."
With a unique blend of commercial acumen, industry knowledge and practical analytics experience, Will’s strength is guiding FMCG clients to discover hidden value and growth opportunities within their business.
“Addressing the critical 'so-what' factor is part of our consulting approach,” Will says.
“For clients, we transform complex business problems into actionable, data-driven insights and craft narratives that assist them to resolve challenges or enhance service delivery.
“This also includes aiding clients in recognising and harnessing the intrinsic value of their data."
#1 Challenge: Demand Forecasting Uncertainty
FMCG manufacturers face the unpredictability of consumer demand. Fluctuations in market trends, seasonal variations + unexpected events can lead to inaccurate demand forecasts, resulting in stockouts or excess inventory.
Solution: Precision In Demand Forecasting
Data analytics tools enable FMCG manufacturers to analyse historical sales data, market trends + external factors. By leveraging predictive analytics, manufacturers can achieve more accurate demand forecasts, reducing the risks associated with stockouts or overstock situations.
#2 Challenge: Operational Inefficiencies
The complex nature of FMCG supply chains can lead to operational inefficiencies, including bottlenecks, production delays, and high maintenance costs. It not only impacts productivity but also contributes to rising operational expenses.
Solution: Supply Chain Optimisation
Implementing data analytics in supply chain management empowers manufacturers to identify and address operational inefficiencies, while also fostering transparency throughout the supply chain, enhancing visibility into every stage of the production and distribution process.Real-time monitoring + analysis of production data can help to streamline processes, minimise downtime optimise maintenance schedules, ultimately reducing operational costs.
#3 Challenge: Product R&D and Quality Management
Staying ahead in the FMCG industry requires continuous innovation + maintaining high product quality. Understanding evolving consumer preferences + adapting products accordingly poses a challenge, along with ensuring consistent quality across production cycles.
Solution: Market Insights & Consumer Analytics
Consumer analytics and market insights equip manufacturers with deep understanding of consumer preferences, evolving market trends, and competitor strategies. Through this nuanced analysis, manufacturers can strategically innovate their products, aligning them with the dynamic demands of consumers.
#4 Challenge: Consumer-Centric Marketing
FMCG Marketing strategies require personalised campaigns that resonate with diverse consumer segments, meaning that marketing spend + engagement needs to be data-driven and precise.
Solution: Customer Segmentation and Product Hyper-Personalisation
Using customer data + behavioural insights, data analytics empowers FMCG manufacturers to create targeted + personalised marketing campaigns. By understanding the unique preferences of diverse consumer segments, manufacturers can tailor their product offerings with greater precision, enhancing engagement and uplifting product sales
Using Data to maximise growth in FMCG + Consumer Markets Industries
Notitia’s team can provide data-driven solutions to help you to understand market trends, consumer behaviours and supply chain:
- We equip our clients with the knowledge and tools necessary to understand their data, enabling them to unlock and maximise its value in various facets of their business.
- Integrating insights into their business, our clients can refine marketing strategies, enhance customer engagement, and optimise supply chains.
- Our team brings a wealth of knowledge in areas ranging from supply chain optimisation, pricing, and promotion strategies, to demand forecasting and customer-focused analytics.
- Our expertise is rooted in addressing and overcoming the multifaceted issues that FMCG companies face, ensuring our clients excel in today's competitive market.
> Questions about how we can help with your data strategy? Book in a call with Notitia Managing Director, Alex Avery or read more about the Notitia Team here.
Image Credit: Eddie Jim, The Age
