E-commerce 2.0: Why digitalization will revolutionize the entire FMCG industry?
E-commerce is now driving the growth in FMCG sales. It pushes the physical trade to digitalize by providing new data sources and opportunities for manufacturers.
The retail sector transformed multiple times since 2016. As the growth of e-commerce has undermined the dominance of large supermarkets the model is being questioned by all sides: not only by the drive and proximity but also by the food specialists, and similar. E-commerce has become the main driver of the growth of FMCG sales.
The development of e-commerce is pushing for the digitalization of physical stores, of which the drive is now the most visible manifestation. The omnichannel is quickly expanding.
Retail innovation and data – new levers to conquer the future market
The arrival of Amazon within the food industry is forcing the sector giants, from Walmart to Tesco, to react. As the Pure Player keeps introducing innovations such as the cashless Amazon Go stores, there are also new formats emerging such as the pedestrian drive*.
Digital technology also brings new connected marketing solutions such as searchandising, digital discount coupons or dematerialized loyalty cards. Access to new data sources and the recovery of data from online and offline opens new perspectives that will transform the industry businesses. The emergence of data in commerce prompts new takeovers or alliances between physical distributors and pure players. Their goal is to exchange their know-how, territorial networking on one hand, mastering logistics and data exploitation on the other. It enables them to overcome traditional borders and barriers between business sectors and to sketch new business maps.
The e-commerce channel is constantly changing and many factors still need to be tested and optimized.
What about the structural change of businesses?
Faced with the challenge, FMCG industrials are moving forward in an individual order. The share of e-commerce in the turnover of the top 50 groups ranges from 1.8% to 9.9%. A coefficient of 1 to 5 depends, above all, on their individual strategy, objectives, and organization.
Online vs. offline share is also particular for each business. At the moment, we can observe a similar number of businesses where online share exceeds the offline share and the opposite.
E-commerce structures are still new: 30% of them have been created in the last two years, and their missions are evolving. In terms of organization, there is no single formula but rather two main approaches: the e-commerce team supporting offline teams to coordinate online actions (negotiations, commercial deals, etc.) and the dedicated team, with its own Key Accounts, Category Managers, etc., responsible for managing online actions directly with its own resources.
In any e-commerce role, the challenge for e-commerce teams goes well beyond the optimization of online sales. In addition to revenue generation, their responsibility is to use new technologies to digitize the company’s global processes and profoundly transform culture and jobs.
In our upcoming article, we will zoom closer on the different types of team organization which can support you in evolving towards omnichannel. Subscribe to our newsletter just below to get notified when the new posts gets published.
You missed the first article from the E-commerce 2.0 series? You can read it right here.
Interested in going even further? Check out our webinar about how the growth of click and collect will influence your business following this link or register for our upcoming webinar on Search Optimization on the 27th of February.
*Pedestrian drive: With this service, retailers can bring the hypermarket to the city center, combining the advantages of the hypermarket (wide assortment, competitive prices) with those of convenience stores. How does it work? Customers place their orders on the retailer’s site or on the application and can pick up their groceries afterward at the nearest store.