The ‘New Retail’ Revolution Meets FMCG
If you haven’t heard the term ‘new retail’ yet, then you will soon. The pandemic forced a rapid online shift in online buying behaviour, but this term was first created back in 2016 by Jack Ma of e-commerce giant, Alibaba.
“New retail, the integration of online, offline, logistics and data
across a single value chain”
The idea of ‘new retail’ recognises that humans are the common link between the online and offline worlds and places them at the centre of everything. This idea takes customer-centricity to a whole new level.
To discuss the impact of ‘new retail’ on the FMCG market I interviewed Sharon Hill, who has a wealth of experience in e-commerce, including companies such as Mars Foods in the UK.
How Can Businesses Ensure They Are Set Up for Success?
“Whilst there is no doubt the sharp rise of e-commerce over the past 18 months has happened in a much shorter timeframe than any of us expected, the challenge now is for retailers to be able to ensure they can deliver on that and have the products available easily and quickly.
There is a huge pressure to ensure retailers are delivering on what shoppers want. The speed at which things are moving means there isn’t a lot of time for circular conversations or questioning. I can see retailers having to make bold decisions and take the initiative where they can see that there’s improvement for a shopper.
This is where suppliers can help. I’ve worked with several fantastic blue chip and FMCG suppliers who come to us with ideas that will enhance the customer journey. Sometimes these ideas provide a great opportunity to trial proposals and suggestions that the retailers wouldn’t have the time, or resources to consider. “
What Impact Has Covid Had on The Growth of The FMCG Sector?
“Some retailers are now in triple digit growth which has been a step change you rarely see in FMCG. It’s been absolute disruption for the sector. The big question is what is the longevity of all of this? A lot of companies are grappling with this as they consider how they can ensure they don’t miss out on the opportunity. Statistics are showing the majority of people that have shopped online for the first time tend to make it a regular way of shopping. It appears that people that have started to shop online out of necessity have realised that it is something that is convenient.
A huge proportion of those who shopped online for the first time were older, 60 plus, so considerations need to be made to ensure you are meeting the needs of an older shopper with your online platform. This isn’t a one hit wonder, this is a change in the way people behave, the importance of having a great e-commerce strategy and how that’s integrated into your entire business is critical. Perhaps more important is how we can fix the future and what are you doing to make sure that in 2025 you’ve got the right products and promotions and you’ve got the right setup to be delivering what’s needed. For example, Tesco pre-Covid were delivering 600,000 orders a week which is still quite substantial and now they’re at 1.5 million. Within the first five months of lockdown in 2020 they tripled the number of deliveries they were doing. Those sorts of statistics are not something we would normally be talking about, it’s phenomenal how the retailers have been able to react.
The growth has been unprecedented versus what we’ve seen in other years. The attention that is now being given to e-commerce has changed significantly, it’s here to stay and businesses need to be thinking about how they embed it into their ways of working so they can keep supporting it as it grows.”
How do you think companies should set themselves up for success on what does the new world look like?
“The direction is definitely around integration and its everybody’s remit to drive online business. Five or six years ago it was probably different, it was more of a niche which perhaps needed hothousing with a bespoke team of people to drive the conversations internally and externally. Covid has accelerated that further and more quickly. If we’re thinking about the different work streams that go into delivering manufacturers’ products into a retailer physically in-store or online, now we need to be thinking in terms of one team – account management, category management and customer activation. They need to be coordinated as one shopper journey. To have these online ways of going to market embedded in your offline journey is much more effective than trying to run separate teams effectively doing the same thing. ”
How do you think companies should set themselves up to capitalise on online opportunities in the future?
“Every company will be different but there are some critical aspects that are worth considering. The first area I would be looking at would be to form a plan. What is your ‘North Star’? What are you aiming towards? And within that plan, what resources do you need to consider? What investment might you need? What are the ways of embedding into existing processes that you might need to put into place? And how are you going to track that performance?
These are the critical aspects of the foundations that need to be established so you can move forward. You may need to decide what resources you might need, for example, an off the shelf digital package that can help you analyse how your products show up. Or maybe you need greater clarity around who’s going to take ownership of the different aspects of the marketing plan.
What kind of investments have you seen FMCG firms make in this area?
“The things that I have seen that made a fundamental difference to how we performed would be the ability to measure your on-shelf presence. Within stores you can walk into a store and do an audit and send field reps in to record whether products are on sale, off sale, what you have, what range is available, where they are positioned and that gives you information you can use with your retailer to drive your business forward. Within a digital space that’s very hard to do because it’s dynamic and changes all the time. There are multiple ways of accessing how your products show up and the experience is different for different people because of your history online.
There are some amazing companies out there that will give you reports of how often your products show up in searches, what your availability is, what your competitors are doing, how often you’ve been converted to a sale. That level of data and information is invaluable because then you can start to assess where you’re performing well and where the opportunity for change is. That is costly, but it is vital. You’ve got digital asset management, so how you are storing all your content, this needs to be invested in and a lot of content storage options now integrate directly with retailers. That drives efficiency because you can download your content, images, descriptions etc and pull shop data direct from retailers or from Nielsen or IRI to understand what your performance is online. When you can understand where the gaps are in your performance, or where you have growth, you can capitalise on it.”
What advice would you give to someone currently in an offline FMCG marketing role who would like to get more involved in the digital side?
“There’s a wealth knowledge and experience in the FMCG world. Within most companies there’s somebody that looks after digital, so I would say if you’re looking after a more traditional part of the business then you need to look for ways to champion the digital side of the business and find ways of bringing it into your everyday role.
When I have been hiring within FMCG I wasn’t looking for specific skillsets I was looking at attitudes and a willingness to learn. A couple of years ago there wasn’t necessarily the right experience; we learned on the job, but now there’s more people that have got the right background and track record. There often isn’t a blueprint. It’s about being able to fail fast and look for ways to course correct and move forward, not everybody is comfortable doing that and I think that’s something that comes through very strongly when you hear about people working in the e-commerce or the digital space.
There isn’t necessarily an absolutely clear-cut road map. There’s often a plan and we know where we’re heading and a mindset of, we need to understand the implications of what we’re doing, and if it’s successful, move forward and scale. The ambiguous nature of that way of working is not comfortable for everyone. I would say if you’ve got somebody that’s willing to learn, they are invested in online, and they’re knowledgeable, as much as they can be, it is often about an attitude and willingness to try and think strategically big.”
As we can see from this interview there has never been a better time to look to expand your digital career within the FMCG market. With record growth, the opportunities presented by the ‘new retail’ world are there to be embraced and capitalised on.
For more information on recruitment opportunities within the digital sector or if you are looking to hire within digital get in touch with me at www.bartonrock.co.uk
About BartonRock: We are the executive search partner for companies where data-driven digital leadership is intrinsic to growth.
We manage the careers of leaders whose know-how and commercial acumen within digital steers the strategic direction and future survival of companies.
Our assignments search for executives who understand how to implement and lead data-centric digital agendas.
You can also subscribe to BartonRock’s Digital Careers podcast by visiting Apple Podcasts