Given that it's the supermarket aisles where customers actually make their final purchase decisions, it's easy to imagine the kind of conversations that must take place in FMCG boardrooms up and down the country around whether digital channels are worth the investment.
But digital can actually play a significant role in helping FMCG brands boost their revenue, lower costs and gather valuable data and insight. And here's how...
1. Price elasticity
FMCG brands all too often find themselves competing on price because products within their category have few obvious differentiating characteristics. To create a more inelastic demand, brands can create emotive value. Digital channels offer greater opportunity to achieve this through personalised dialogue, valued content and direct customer engagement.
2. Short-term sales driving
More traditional media channels can be very successful when it comes to driving people to stores; however, digital channels have many clear advantages, even for non- eCommerce retailers. They allow FMCG brands to undertake highly targeted location based marketing, achieve higher reach for vouchers, offers and competitions, and also drive repeat sales via channels like email.
3. Advocacy enablement
In the days before the web, if you gave your customer a good experience the best you could hope for is that they might mention it to their friends. But online channels offer brands the chance to actively enable and directly encourage public brand advocacy. Sharing with an entire group of friends is as simple as clicking a button, and with the added promise of a value exchange such as a chance to win, many will happily spread the word.
4. Increased reach at lower cost
Smart use of digital channels is usually behind any campaign that achieves stupendous level of reach (see Smirnoff, Evian and the Red Bull Stratos space dive project, pictured below). This is because, unlike traditional media, digital channels create the potential for free, earned media. YouTube is often cited as the best channel for this due to the chance of achieving video virality, but Facebook also has a high success rate.
5. Better, cheaper customer service
The fact that call centres can be extremely costly is just one of many reasons why more and more brands are choosing to communicate with their customers via digital channels instead -- often Twitter, as this is the preferred choice of contact for many consumers, especially when on the move. And although the pitfalls of the visibility of complaints are obvious, the rewards for handling them in the right way can bring much bigger, better opportunities; Zappos and Dell do this particularly well.
6. Lower cost information communications
Often FMCG brands need to deliver a lot of information at the consideration stage of the customer journey, and digital channels enable them to do this more effectively. A classic example is baby products -- parents are unsure which ones are right for them, and certainly reluctant to take a risk on an unknown brand. Mobile friendly websites (which allow customers to easily get more information while they're actually in store) and even technology such as augmented reality are useful here.
7. Market research benefits
Qualitative focus groups, interviews, quantitative surveys -- all extremely useful for FMCG brands who can't usually access retailer data on how consumers choose and buy their products. But digital channels allow you to directly analyse what people are already saying about your brand; you remove the interviewer bias and you get a more honest account of people's true opinions.
8. Research and development
It's possible to make use of your digital audience (although usually just the most passionate) to crowdsource product and service ideas, with such groups often becoming powerful transmitters of social noise. Social channels also allow two-way conversation which provides feedback on current products and services, enabling propositions to be adjusted and optimised on a continuous basis.
9. Campaign execution testing
TV and offline media is often a bit 'suck it and see', even with extensive pre-testing. Digital media allows you to A/B test multiple options, refining and optimising over time. The evaluation opportunities available digitally (like online journey tracking and attribution modeling) are also extensive -- another way to see if your campaigns have been effective.