Retail behemoths are currently riding the "digital wave." The pre-pandemic start-ups, who relied on technology to reach consumers more effectively and quickly, undoubtedly paved the way for omnichannel disruption. Simply put, it's important to approach, persuade, and convert the various tech-savvy generations who make up the diverse FMCG client base. For this reason, FMCG companies are breaking down barriers by making large investments in the best and most innovative technology.

Riding the Tech Bandwagon

The D2C market provides the biggest opportunity for any player to scale up their distribution game and generate sustainable profitability. According to Vrijesh Nagathan, Chief Information & Digital Technology Officer, Marico, the use of AI and analytics improves the brand’s on-ground performance and micro-market focus. The rapid adoption of AI-based models, says Pallab Roy, Partner, KPMG, could improve back-office operations and assist managers in data analyses.

“Generative AI has advanced to a stage where it can take care of basic research-related roles in consumer behavior and industry trends,” stated Rajat Wahi, Partner at Deloitte India. That however doesn’t raise an alarm for the human workforce, as technological advancement creates scopes for developing new KRAs and assignments for teams. Bharat Sawnani, FMCG veteran and Founder, Elevantus Food Consultancy, added: “Almost 50 percent of average company time is spent in presentations. These repetitive and mundane tasks can easily be done by AI, so that brands can have their employees focus on higher-value assignments such as upselling and expansion.” 

India’s retail market is expected to grow to $2 trillion by 2032. The ascent will be fueled by new-age brands giving their customers a smooth and seamless shopping experience by combining online storefronts, social media platforms, mobile apps, physical storefronts, and more. “Over time, e-commerce in India has undergone a tremendous transformation as business models shifted to keep up with rising internet usage, improved infrastructure, and the emergence of omnichannel, B2B2C, and social commerce. With omnichannel, brands can take advantage of each channel's convenience and advantages such as tailored recommendations on their online store or engaging with consumers on social media,” said Bharati Balakrishnan, Country Head and Director, Southeast Asia, and India, Shopify.

Pushing Towards Composable Stores

A recent study by IBM and The Consumer Goods Forum, which included opinions of 1,800 consumer goods executives across 23 countries, inferred that the rapidly evolving global FMCG industry was getting serious on sustainability practices and greater efficiency with aggressive technological application. According to the study ‘Redesigning Brand Values: Purpose and Profit Converge in Core Operations’, FMCG leaders explored prospects in advanced technologies such as automation (71 percent), analytics (69 percent), IoT (62 percent), AI (55 percent), and intelligent workflows (44 percent).

Substantiating such facts is the on-ground adoption of a system that manages artificial intelligence and its operation across multiple segments of any company. That job is done by composable storefronts. This is essentially a digital commerce platform enabling a retailer to customize their storefronts with an array of microservices, which are flexible enough to add or remove, thus helping the retailer become highly responsive to rapid shifts in buyer preferences. They are cost-effective and allow retailers to experiment with new technologies to gauge customer behavior minutely.        

Popular Executions in FMCG

Automation has ushered in the next level of technological revolution in FMCG. Industry giants have been working with robots for a long time, but the massive economic hurdle poised by the pandemic forced tech companies to improvise and come up with cost-effective solutions across business scales named collaborative robots, or cobots. These cobots take care of a range of functions such as packaging, warehousing, inventory control, customization and quality control.

With tighter budgets necessitating a comparatively lower usage of automation while managing same-day or same-hour delivery, retailers are extensively using micro-fulfillment centers (MFC) that reduce the distance between the inventory and the consumer. Even manual operation of these MFCs has also been made possible so that the workforce at stores and warehouses can conveniently use them to take care of online orders.

Importance of Image Recognition

Image recognition as a technology has proven to be a very cost-effective and important solution across sales, merchandising, analytics, and other departments of any FMCG brand today. For the first time, data points that emerged from store shelf images can be used to triangulate and establish a link between the execution of a campaign and its ROI. Tejas Nimbargi, Sales Tech Innovation Manager, Mondelez, added how image recognition of products from a particular photograph could help detect the store it was in, which in turn would lead to data correction. “In case of empty store hotspots, an IR-enabled camera can help confirm whether your customers are moving to your primary category. One can also detect the moods of customers,” Nimbargi explained.

It’s still the early days for automation and allied technologies to overhaul traditional trade in India, but according to Rakesh Badugu, Business Leadership, Hindustan Unilever, technologies such as image recognition were helping brands optimize their cost-to-serve.

“Instant image recognition, with due guidance about packs to be inspected at any store, will boost the efficiency of salespersons enormously. This will optimize time and give sure-shot information on how many SKUs will be sold from a given outlet, thus aligning cost-to-serve with sales output. Accumulation of such data will enable a brand to predict the average sales of a particular product across a city, giving insights to marketing, supply chain, and other teams easily.”