We live in a time where all industries are going through a major change. We can try and blame the COVID-19 pandemic for that but the truth is that we are at the end of the industrial era and the pandemic is nothing but a catalyst pushing us to adopt to the fourth industrial revolution quicker.
The consumer packaged goods industry is no exception to the current revolution, as shown by global trends, especially in developed markets. Therefore, it is important that players in emerging markets like Botswana take notice and ensure that they are prepared and align their growth objectives to these trends. Before we go further into the topic, let me quickly run you back to the industrial revolution history.
Throughout history, human beings have been strongly dependent on technology to help them be more efficient and increase their productivity in agriculture. It is important to remember that technology of each era is definitely not of the same size, shape and advancement as that of today. However, human nature has always propelled us to improve and better whatever tools we have.
Before the first industrialization around 1765, agriculture was the backbone of every society’s economy. The first industrial revolution introduced us to mechanisation, invention of steam engines that helped boost the manufacturing of railroads and infrastructure around the world. The second industrial revolution began around 1870 and brought about major technological advancements and emergence of energy like electricity, oil and gas.
Demand for steel soared for manufacturing and construction. This led to the invention of motor vehicles. The way human beings communicated was disrupted in this era because of the invention of telephones and the telegraphs. This was by far the most important industrial revolution for humanity.
The third and current industrial revolution started around 1969. In this era, we saw an emergence of electronic products, telecommunications advancements, computers and nuclear energy. Currently we are in a shift towards the fourth industrial revolution and are one foot in the third industrial revolution. The fourth industrial revolution is spurred on by the emergence of the Internet, which has led to the development of virtual reality, block chains, cryptocurrency, the Internet of Things, artificial intelligence, big data and so on.
To come back to the topic, all that may seem overwhelming looking at the current snail’s pace of technological advancement in our country, especially manufacturing. However, as a local manufacturer of consumer packaged goods, you can take advantage of these trends to position yourself for a sustainable future growth in the following ways.
Nothing beats the satisfaction that a customer gets from an amazing shopping experience. The pandemic and fear of prolonged exposure has resulted in demand for convenience in the FMCG sector and players in this space need to strive to improve customer experience. In developed markets, we have seen start-ups leverage the high mobile device dependency of consumers to employ Augmented Reality (AR) and Virtual Reality (VR) to make products more engaging and interactive. The beauty of 3D videos and gamification is that they attract and entertain customers while providing them with more information about the products.
Furthermore, when you invest in improving your customer’s shopping experiences, it contributes significantly to building trust and increasing brand loyalty. To this end, more and more companies are providing higher convenience with digital technologies.
The outbreak of the COVID-19 pandemic has positively shifted consumers’ shopping habits and attitudes towards online channels. Although dominant sales still come from the traditional walk-in model, brands are now building their online presence to boost their engagement with consumers. Social media also plays a significant role in the world of e-commerce as more items are sold via social platforms like Instagram.
To this end, FMCG players should actively incorporate diverse social traditional and media, leveraging mobile and headless commerce to market their products. Local players like Shedol Fragrances and Cosmetics have done an amazing job of this. They have a strong digital presence and their positioning at Game City Mall and Airport Junction Mall in Gaborone ensures that they also have maximum reach to all walk-in customers.
In developed markets, sustainability is a top priority for consumers these days and they take a democratic stance when it comes to their association with brands because consumers are becoming more conscious about climate change and its impact on the environment. They therefore pay more attention to companies’ social activity and seek those that support them make more responsible choices. As sustainability comes to the forefront, companies not only address how they present and package their products but also what materials they use in their products. To meet consumer demand, more and more FMCG companies are offering compostable, recyclable and reusable packaging.
Additionally, cruelty-free, vegan ingredients are on the rise not only in food but also in non-food items such as cosmetics and cleaning products. ESG shouldn’t only be a financial industry thing. Businesses need to start looking into on-boarding ESG officers in their risk management departments.
Digitisation should be a top pressing priority for all local FMCG brands as customers interact with brands across multiple online and offline channels. These days companies get access to very valuable data from multiple sources, including various social media platforms, the web and mobile applications, and also engage with their customers directly. Integrating digital technologies not only offers an Omni channel experience to customers but also converts one-time buyers into repeat customers.
THE INTERNET OF THINGS
Globally we are seeing how IoT is evolving. Its applications are gaining popularity in the FMCG sector. IoT sensors and devices are automated and affordable, enabling FMCG companies to employ them in brick and mortar stores, warehouses and manufacturing facilities. One example of IoT device implementation is to provide targeted messaging to consumers as they shop. Another is inventory management, both in stores and in warehouses, for which IoT is widely used. In combination with related emerging technologies, including ambient intelligence and smart objects, IoT creates new consumer interaction channels and revenue streams for FMCG brands.