Utilise real-time data collection, analysis to enhance retail execution strategies, says RSM's David Eu
The RSM Partner discussed the impact of consumer behaviour on the retail landscape and outlined how companies can seize opportunities by aligning with market trends.
The fast-moving consumer goods (FMCG) industry is rife with opportunities, driven by evolving consumer preferences and technological advancements. As consumer demands shift towards sustainability and personalised experiences, companies in the FMCG sector are presented with the chance to innovate and differentiate themselves in a competitive marketplace.
David Eu, Partner and Deputy Industry Lead of the F&B, Retail and Consumer Products Practice at RSM Singapore, brings a wealth of experience to the FMCG sector. With a career that began at Ernst & Young in 1994, David has developed a deep understanding of various industries, including banking, manufacturing, and agriculture. His expertise extends to audits and initial public offerings, as well as corporate finance in the Indonesian oil palm industry.
Since joining RSM Singapore in 2006, David has co-led initiatives serving the needs of F&B establishments and FMCG clients, providing insights into manufacturing, retail, and public-listed companies.
In our interview with David, who is joining this year’s FMCG Asia Awards 2024 judging panel, he shares his perspectives on the strategies FMCG companies can employ to navigate the challenges of the modern market. He emphasised the importance of technology and sustainability in enhancing retail execution strategies and offered insights into overcoming barriers to innovation. Through his expertise, David provides a comprehensive overview of the current state and future potential of the FMCG industry.
With the challenges of having tight competition and changing inventory turnover, how can FMCG companies effectively improve their retail execution strategies?
To effectively improve retail execution strategies amidst tight competition and changing inventory turnover, FMCG companies should embrace technology by utilising real-time data collection and analysis for informed decision-making and optimised inventory management. Product innovation plays a crucial role, with a focus on sustainable practices to enhance brand image and attract environmentally conscious consumers. Companies should carefully select retail channels that align with their target audience and maximise product visibility. Additionally, by engaging in-store experiences, such as innovative displays and live demonstrations, businesses can highlight new product features and capture consumer interest. Staying connected with consumer feedback is essential to ensure products meet market needs and preferences.
When companies adopt an agile operating model that emphasises brand relevance over traditional mass-market strategies, they can reduce their reliance on outdated channels. Additionally, mergers and acquisitions can help consolidate market presence and establish a foundation for sustainable organic growth.
As continuous innovation becomes a need for FMCG companies to thrive in the ever-changing market, what are some challenges that they are faced with in this regard and how can they work on these?
As continuous innovation becomes essential for FMCG companies to thrive in the ever-changing market, they face several challenges. High R&D costs make it difficult to balance innovation with affordability, necessitating the optimisation of R&D processes and leveraging technologies like AI. Market saturation requires companies to understand consumer needs and develop differentiated products to gain market share in a crowded marketplace. Additionally, supply chain complexity demands efficient and adaptable systems to increase the speed and cost-effectiveness of delivering innovative products.
To address these challenges, companies should leverage consumer insights to identify unmet needs and develop products that resonate with their target audience. Diversification into new product categories, distribution channels, or business models can mitigate market saturation and create growth opportunities. Finally, protecting innovation through strong intellectual property management is crucial to maintaining a competitive edge.
Can you share some strategies on how FMCG companies can develop a more sustainable supply chain and how they can ensure its optimal effect?
To develop a more sustainable supply chain and ensure its optimal effect, FMCG companies can adopt several key strategies. First, assessing the current supply chain is essential. Conducting a thorough analysis helps identify areas for improvement, such as resource consumption, waste generation, and transportation inefficiencies. Minimising waste is another critical step, which can be achieved by exploring recyclable or compostable packaging materials. Investing in energy-efficient technologies and practices across all stages of the supply chain, from manufacturing facilities to transportation, is crucial for enhancing energy efficiency.
Collaboration with partners is also vital. Implementing waste reduction programmes in partnership with suppliers and ensuring they adhere to sustainable practices by setting sustainability standards for raw materials sourcing, production processes, and waste management can drive significant improvements. Consumer engagement plays a crucial role as well. Educating consumers about the company’s sustainability efforts and encouraging them to participate in recycling programmes helps extend the impact of these initiatives. Regular carbon footprint analysis of the supply chain can identify areas for reduction and ensure continuous progress.
To ensure these strategies are effective, FMCG companies should set SMART goals and communicate them across the organisation. Monitoring progress towards sustainability goals using relevant metrics, such as reduced carbon emissions, water usage, or waste generation, is essential. Engaging all stakeholders, including employees, suppliers, and customers, in sustainability initiatives and providing training and resources to empower them to contribute is also important. Continuous improvement should be embraced to reflect new technologies and best practices. I believe transparency is key to building trust with consumers and stakeholders, so publishing sustainability reports and communicating openly about progress is crucial.
Consumer behaviour and preferences have become a huge driver of changes in the retail landscape. How can FMCG companies maximise the opportunities that come from such a phenomenon?
Consumer behaviour and preferences have become significant drivers of changes in the retail landscape, presenting numerous opportunities for FMCG companies. To maximise these opportunities, companies should ensure findability by making products easy to locate online through search engine optimisation (SEO) and in-store by optimising product placement based on consumer behaviour and purchasing patterns. Fluidity is also essential; ensuring products are available at the right place and time can be achieved by implementing forecasting models and collaborating with retailers to optimise stock levels.
Embracing innovation is key to meeting changing consumer preferences. This can involve developing new products or refining existing ones, using market research, social listening tools, and data analytics to identify emerging trends and unmet needs. Prioritising customer values and preferences by staying in tune with market trends and adapting products and marketing strategies through customer data, social media insights, and market research is crucial.
Refining retail execution strategies is necessary to optimise in-store promotions, displays, and merchandising strategies. Additionally, focussing on product innovation, pricing optimisation, distribution excellence, marketing effectiveness, and customer experience enhancement will help FMCG companies capitalise on the evolving retail landscape. As a partner in the FMCG industry, I believe these strategies collectively enable companies to thrive and stay competitive.
What factors do you think will hinder the growth of the FMCG industry in the near future?
Several factors could hinder the growth of the FMCG industry in the near future. Intense competition from both established players and new entrants poses a significant challenge. Price wars should be approached with caution, as consumers have become more price-sensitive and private-label brands offered by retailers are a growing threat to established FMCG brands. Changing consumer preferences also present a risk; failing to adapt quickly enough could result in losing market share. Increasing consumer concerns over sustainability and the environmental impact of products and packaging mean that FMCG companies must be proactive or risk losing market share to eco-conscious competitors.
Supply chain disruptions caused by geopolitical events, resource scarcity, or logistical challenges can significantly impact the FMCG industry, leading to product shortages, price hikes, and production slowdowns. Additionally, economic factors such as downturns can reduce consumer spending, whilst fluctuations in currency exchange rates and rising raw material costs can squeeze profit margins. I believe that addressing these challenges proactively is essential to ensure sustained growth and competitiveness.
As part of the esteemed judges for the FMCG Asia Awards 2024, what factors or qualities do you think the entries must have in terms of making a long-lasting impact on the industry and their customers?
First, a compelling brand story is crucial. The narrative behind the brand should resonate with consumers, creating a strong emotional connection and fostering brand loyalty. Scalability is another important factor; the product or initiative should have the potential to grow and expand successfully in different markets, demonstrating its viability and adaptability.
Sustainability is also a critical quality. Entries should showcase their commitment to sustainable practices, whether through eco-friendly packaging, ethical sourcing, or reducing their environmental footprint. Demonstrating a genuine dedication to sustainability not only meets the growing consumer demand for environmentally conscious products but also ensures the brand’s long-term relevance and responsibility.
