Strategic Challenges for FMCG and Retail

January 03, 2022 | Consumer Goods

Today's society is experiencing tremendous transformation thanks to globalization and digitalization. These changes are, in turn, changing specific customer needs and requirements, especially for the mass market and distribution industry. The COVID-19 pandemic has also affected consumer demand while challenging integrated supply chains.

Most fast-moving consumer goods (FMCG) companies have to change their strategies to keep up with the ever-evolving market. FMCG companies need to create robust digital ecosystems to ease their market reach. Besides, these firms should also consider sustainable initiatives, like responsible sourcing and sustainable production.

What is FMCG?

Fast-moving consumer goods (FCMG) are products that often sell quickly at relatively low prices. Typically, these goods have a high consumer demand which shortens their shelf life. Besides, most of these products are highly perishable and have high turnover.

FMCGs often account for a large proportion of consumer spending, although they are low-involvement purchases. Common product categories include:

  • Processed foods like cereals and cheese products
  • Baked goods like cookies
  • Beverages like energy drinks and juices
  • Cosmetics and toiletries
  • Cleaning products like oven cleaners and baking soda
  • Ready-to-eat meals
  • Dry goods, frozen foods, and fresh foods

What makes for a successful FMCG brand?

The incredibly high turnover rate of FMCGs makes the industry very competitive. Top FMCG industry players are often innovative in their retail approach. Essentially, brands need to understand their target market to deliver products that meet the market demand. Shifting from mass marketing and having personalized marketing campaigns also makes a difference for successful FMCG brands.

Competitive FMCG companies also have unparalleled customer loyalty. Creating a distinctive and exciting brand identity often helps to boost client trust. Product packaging, social media presence, and customer service all give a glimpse of a company's brand identity.

Successful FMCG brands also know how to tell compelling stories. With the right packaging design and visual storytelling, FMCG companies can share their brand identity at a glance and appeal to a more extensive client base. Besides, you could also include personal stories that help forge lasting relationships with your consumers.

Achieving success in this industry may also rely on how a company responds to changing industry trends. Read on to discover some of these challenges and approaches that brands can take to remain competitive in the market.

What are the most common challenges facing the FMCG and retail industry?

  • Marketing
  • Engagement across Multiple Channels
  • Multichannel sales equality
  • Fragmented Supply Chains
  • Globalization
  • Organization Models
  • Innovation



While marketing goals have remained unchanged, the ways of attaining these goals are constantly evolving to match the market demand. Mass marketing, for example, will not go down well with the millennial client base.

FMCG companies should understand their individual client's journeys to find new ways and opportunities to connect with them. Besides, it is also critical to promote and establish these identified channels. An essential step could involve developing, incentivizing, and differentiating your different marketing streams.

Remember that you don't need to be a part of all the available channels necessarily. Instead, work on leveraging those you excel at to achieve incremental sales.

Engagement across Multiple Channels

Today's consumers prefer to perform their product research and complete their orders online. These solutions provide unmatched convenience and safety. FMCG companies must respond to these market changes to remain relevant and enjoy an expansive market share.

Podcasts and voice assistants deliver an extremely viable advertising channel. Firms can leverage this medium to guide their client’s research processes. Besides, you will also boost your chances of generating significant brand recall.

FMCG companies can respond positively to the massive shift towards digital channels with a robust IT infrastructure. On the other hand, enhanced ERP integration will prove decisive in boosting sales.

Multichannel sales equality

In the past few years, FMCG firms have tried to break down their prices' sales equality and the discounts available for different products. However, the value chain is not as structured as before. Today's market requires FMCG frontrunners to develop the concept of "multichannel sales equality proactively."

Such concepts will ensure that your clients don’t pay differently for similar products purchased across multiple platforms.

Fragmented Supply Chains

Retail operations and FMCG rely on steady supply chains to maintain their sustainability. Challenges in this business aspect have derailed most companies, preventing them from achieving their desired goals.

For example, labor shortages experienced with pivotal jobs like truck driving impairs the desire to guarantee fast deliveries. Trade regulations are also influencing goods transports and their cost implications.

FMCG firms need to invest in the proper supply chain infrastructure to meet consumer expectations seamlessly. A truly agile supply chain guarantees a safe and fast shopping experience for clients from all walks of life. You could consider adopting a cloud-based supply chain management solution that ensures you serve a consistently growing client base.


Exports are invaluable for any FMCG firm keen on gaining traction in the industry. Companies looking to leverage the global market should understand the dynamics of internationalization. This market share goes beyond simple product exportation.

Take time to appreciate how consumers behave in their local environment. Your client’s taste and preferences should also influence how you deliver your products.

Organization Models

With multiple competitions arising from different channels, you need everyone in your organization on board to deliver the best results. Ensure that all your employees buy into your new operations. Work with your team to manage prices and promotions efficiently. Also, ensure that you align prices and promotions to optimize their positioning.


FMCG firms should choose to either focus on their product or delivery format. Consumers often look for products with added value and will not have any qualms about moving to your competitors if you don't offer value. With the right strategies, you’ll have an easier time generating value for your clients.

Embrace Change to Make an Impact in the FMCG market

The coming decades will still present multiple challenges for FMCG firms. Industry-leading market players will need to keep making radical changes to their strategies.

Any company looking to make headways in the FMCG industry should boost its speed and enhance accuracy. FMCG company executives need robust business strategies that will help them leverage today's opportunities and remain successful in the future.

Retail Consulting Services

Ollen Group is one of the leading consumer goods and retail consulting firms in the Middle East & Africa region (MEA) offering retail design services with turnkey solutions from strategy to execution. Our retail management consultant and strategy consultants will help your through your journey.

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