Your Guide to Success in the FMCG Landscape

In the fast-moving consumer goods (FMCG) world, agility and strategic insight are crucial for small and medium businesses (SMBs) to thrive. As consumers and technology continually reshape expectations, new retail concepts redefine omnichannel strategies.

This report delves into the global FMCG landscape, drawing from our survey “SMB: An Inside Look,” to provide actionable insights for SMBs aiming to succeed.

Here’s a small preview of what you can expect from the report.

Mapping out the Market

The year 2022 was a promising period for SMBs globally, with their market share rivaling that of the top 10 manufacturers. However, an unexpected contender, private labels, emerged and quickly gained a significant market share. By 2024, private labels have not only sustained their presence on shelves but have also maintained growth momentum, challenging SMBs head-to-head.

Inflation: The Ubiquitous Challenge

Inflation remains a significant challenge, impacting purchasing decisions and business operations. While global inflation forecasts suggest price easing beyond 2024, wage growth in 14 out of 18 measured markets is projected to remain below inflation levels. Medium-sized and large companies identified inflation as their top challenge in 2023, while small companies, due to lower overhead costs, ranked it lower.

In 2024, businesses of all sizes uniformly recognize inflation as a primary challenge to overcome. The key to navigating this challenge lies in strategic actions and adaptability.

Taking Action: Refine & Reach

Overcoming challenges necessitates proactive measures. In 2023, 46.5% of surveyed businesses indicated they would reconsider their product lines, removing low-performing items. This strategy proved successful for 93% of those who implemented it. In 2024, SMBs plan to continue refining their product lines, with a significant focus on marketing to reach their target audience.

Pricing Strategy: Balancing Act

Effective pricing strategies are essential, especially amid inflation. Historical data on category and product-level elasticity informs successful pricing decisions. In 2023, maintaining price and focusing on market share growth was the top strategy, although its popularity has decreased by 14 percentage points in 2024. Meanwhile, loyalty programs have gained traction as brand loyalty continues to decline.

Omnichannel Strategy: Integrating Online and Offline Channels

While e-commerce remains important, there is a noticeable shift towards offline channels. For SMBs, integrating both online and offline strategies is crucial. In 2024, 42% of small businesses and 67% of medium-sized businesses employ an omnichannel approach. Additionally, many SMBs aim to enter traditional trade spaces, which offer consistent value.

Navigating Consumer Behavior

Consumer behavior remains a significant risk due to its unpredictability. Our “Mind over Matter” study revealed that consumers often misrepresent their actions, making it challenging to predict behavior accurately. SMBs must consider cognitive biases such as possession, immediacy, popularity, fear, and the appeal of free offerings when designing their strategies.

The Role of Data

Data-driven decision-making is vital for SMBs. While many small businesses rely on instinct and experience, integrating market data can transform decision-making processes, reducing risks and replacing uncertainties with certainties. Accurate data enables competitive pricing strategies, informed negotiations with retailers, and effective consumer engagement.

The bottom line

In conclusion, by embracing agility, leveraging data, and focusing on customer-centric strategies, SMBs can navigate the dynamic FMCG landscape and position themselves for long-term success. Adaptability and strategic insights will be the key drivers for SMBs to not only survive but thrive in a competitive market.