Data-driven decision-making in FMCG
In belows blog post, Marcin Kubica, Delivery Manager at Clouds On Mars dwelves into the importance of data-driven decision-making in FMCG.
In today’s world, data has become the most powerful tool to drive decisions in businesses. Companies that leverage data-driven insights have a competitive edge over those that don’t. In fact, a study by McKinsey found that data-driven organizations are 23 times more likely to acquire customers, 6 times more likely to retain customers, and 19 times more likely to be profitable, you can access this study here.
The fast-moving consumer goods (FMCG) industry is no exception when it comes to data-driven decision-making. Companies that harness data insights can increase revenue, profit, and market share. For instance, FMCG companies can leverage data from various sources, including point-of-sale data, social media, customer feedback, and market trends, to drive decisions that optimize product pricing, promotion, and distribution.
One way FMCG companies can increase revenue is by optimizing their pricing strategy. By analyzing sales data, companies can identify pricing thresholds that maximize revenue and profit margins. For example, a company can use data to determine the highest price point that consumers are willing to pay for a product without significantly impacting sales volume. This can help increase profit margins and revenue.
Another way FMCG companies can leverage data is by optimizing their promotions strategy. By analyzing past promotions, companies can determine which promotions are most effective and what drives the most sales. This can help companies tailor their promotions to specific customer segments, leading to increased sales volume and revenue.
Data can also be used to optimize distribution channels. By analyzing sales data and market trends, companies can identify the most effective distribution channels for their products. For instance, a company can use data to determine which stores or regions have the highest sales volume and adjust their distribution strategy accordingly. This can help increase market share and revenue.
It’s worth noting that to fully leverage the power of data, companies must integrate data from various sources. Point-of-sale data, customer feedback, social media, and market trends all provide valuable insights that can drive decisions. By integrating data from these sources, companies can gain a more comprehensive understanding of their customers and the market, leading to more informed decisions.
Data visualization is also a critical component of data-driven decision-making. Data visualization tools, such as charts and graphs, help decision-makers understand complex data sets quickly and easily. This enables them to make decisions faster and more accurately, leading to improved business outcomes.
Data-driven decision-making in FMCG can also aid in the identifying of new product opportunities. By analyzing market trends and customer feedback, companies can identify gaps in the market and develop new products that meet customer needs. For example, a company could use data to determine that there is a demand for gluten-free snacks and develop a new product line to meet that demand.
In summary, data-driven decision-making in FMCG is crucial for success. By leveraging data insights, companies can optimize their pricing, promotion, and distribution strategies, leading to increased revenue and profit margins. Integrating data from various sources and using data visualization tools are essential components of data-driven decision-making. FMCG companies that don’t embrace data-driven insights risk falling behind their competitors who are using data to gain a competitive edge.
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