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Data Analytics in FMCG: Its Meaning, Importance & Use Cases

Data analytics help the FMCG industry to reduce costs, streamline production and supply chain, and take the products to the right target market at the right time. It provides companies with the necessary insights to adopt the data-driven model for decision-making. Let’s understand the effective role of data analytics in the FMCG sector.

Data analytics is the practice of analyzing datasets to derive meaningful insights. It answers questions, gives patterns, and helps in making decisions based on proper evidence/ context. During the last few years, many establishments from various industries have adopted new technology to process data and derive insights. The FMCG (Fast Moving Consumer Goods) industry too followed suit to streamline its manufacturing, supplying, and customer care services.

The FMCG industry is also known as Consumer Packed Goods (CPG) industry and happens to be the largest market internationally. The MENA (Middle East and North Africa) region saw high demand for consumer goods before the Covid-19 pandemic pushed things into turmoil.

Statistics show that Saudi Arabia has a total retail consumer spending of $271919.41 million. Though there has been a 64% decrease in customers who went to supermarkets, the demand for goods hasn’t gone down. The market shifted from brick-and-mortar stores to online retailing. Moreover, the consumer trends in GCC (Gulf Corporation Council) have begun to resemble the trends in the US.
There has been a polarization of consumers based on price, branding, quality, and convenience. In fact, the changes started after 2015, when major developments took place in the GCC, be it the introduction of VAT or an increase in working hours.

A research report shows that 69% of UAE and 63% of Saudi Arabia consumers prefer to pay more if a brand guarantees quality products. Furthermore, modern trade is continuing to become famous in the region. In such instances, an FMCG manufacturer/seller needs to understand the market/ consumer requirements to become successful and gain a competitive edge over other players. This is possible when the establishment makes use of big data analytics to gather accurate and meaningful insights for decision-making.

Data Analytics

The Significance of Big Data Analytics in FMCG

Data analytics in FMCG companies helps improve the scalability, flexibility, and value creation of the business. It is a dynamic industry that requires an equally dynamic approach to stay ahead of the trends and provide consumers with valuable services. For example, the omnichannel shopping experience can be best delivered when the enterprise leverages big data analytics

Running data analytics requires making changes to the existing business systems. Outdated technologies and legacy systems cannot work efficiently with advanced analytical tools. Businesses should first work on digital transformation and invest in data management solutions to build a streamlined data flow within the establishment. Knowing which tools and technology to use is vital to successfully implementing the data-driven model in the business. That’s where offshore solution providers step into the picture and offer end-to-end services to set up, integrate, implement, and manage big data analytical tools

The main purpose of using data analytics in the FMCG industry is to increase sales and profits by providing consumers with what they want. This requires flexibility, adaptability, and agility to align and realign the goals with the market demands. Understanding customers and working on real-time customer engagement will lead to an increase in customer loyalty.

Why Data Analytics Is Important in FMCG

Be it inventory, supply chain, or consumer experience, data analytics can help the FMCG industry use predictive intelligence in real-time to make the right decisions. Here, we’ll focus solely on how big data analytics companies assist businesses in dealing with consumer preferences and understanding the target market.  

why Data Analytics in Important in FMCG
Why Data Analytics in Important in FMCG

Analyzing Target Customers 

There’s no denying the pressure of a competitive market. It’s hard to have loyal customers in the FMCG industry with new brands, products, and companies entering the market every day. Data analytics help you to understand your target audience. 

Who are your target customers? What do you know about them? What are the demographics? Such questions can be answered using data analytics. It helps identify potential customers for a long-term relationship with the business. 

Better Targeting 

Marketing and promotions play a significant role in today’s world. Businesses need to grab customers’ attention with marketing and wow them with their products. For that, the business should know which type of marketing and advertising strategies will deliver results. 

For example, having a business website and optimizing it for search engines has become compulsory to reach internet users. TV ads work for brands whose target customers spend more time watching the telly. Data analytics will give the necessary insights to plan marketing campaigns. 

Reduce the Risk of Fraud 

If attracting customers is one aspect, identifying fraudsters is another crucial issue. How does a business know that the person is a genuine customer and not a fraudster? The advent of online retailing and eCommerce has increased the rate of fraudulent transactions. Many businesses face losses due to a lack of awareness and control over such incidents. 

Data analytics can help define the weak spots and analyze a customer to determine the chances of a fraudulent transaction. Such transactions can be blocked, rejected, or prevented to avoid losses. 

Anticipate Customer Needs

One way to inspire consumer loyalty is by anticipating their needs and delivering the products/ services. If a customer wants to go digital and make online purchases, an eCommerce website will help keep the customer instead of losing them to a competitor who offers this service. 

Data analytics in FMGC uses data from multiple sources and processes this data in real-time to anticipate what customer wants through predictive analytics. 

Plan Innovations 

What kind of products will the customers buy? What changes does a brand need to make to the existing products to drive sales? How can you redesign the store to make customers spend more time because of the attractive atmosphere and not because they can’t find what they want? 

Data analytics will help the business read the market trends accurately and be ready to grab opportunities before the competitors. Moreover, innovations in product research and development can be patented, which adds to the brand image. 

Data Analytics Use Cases in the FMCG industry

Let’s look at some of the use cases of data analytics in the FMCG sector to understand how it can help with every aspect of the business to change the focus from product-centric to customer-centric. 

Data Analytics Use Cases in FMCG industry
Data Analytics Use Cases in FMCG industry

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    Optimizing Inventory

    The increase in customer expectations put FMCG companies in a tricky spot. How much stock should they release into the market? How much should they store in the warehouse? What should be the ratio of work in progress to finished goods? Data analytics will answer the questions based on historical and real-time data. Businesses can now manage their inventory to suit the market demands.

    Performing Supply Chain Analytics 

    The supply chain is the most crucial part of the FMCG industry. A delay at one level could disrupt the entire supply chain and push the company into chaos. We’ve experienced this during the Covid-19 pandemic. Data analytics can minimize the risk of supply chain disruptions by predicting issues in advance and empowering the business to be proactive instead of reactive. 

    Optimizing Demand Forecast 

    The sales teams run various analytics to forecast market demands. This gives the business the required information to continuously make changes and improvements to its approach. Accurate demand forecasting will put the business in a prominent position by reducing expenses and increasing returns. 

    Analyzing Pricing 

    Knowing how much to price a product is one of the toughest parts of working in the FMCG industry. Aspects like target buyers, quality of the product, competitor’s pricing, market demand, etc., should be considered. Discounting the price for promotions requires a similar approach. Data analytics uses the input details to generate reports that help the sales and marketing teams make the right decisions. 

    Analytics for Customer Retention 

    Hypercompetitive markets are the trademark of the FMCG industry. Customer retention can make or break a business. Data analytics will help the companies identify ways to inspire customer loyalty in different segments. Businesses can personalize their strategies for each customer segment and get the desired results. 

    Reduce Operational Cost

    Is a business spending too much money to manufacture a product? Are there ways to reduce the costs without compromising quality? Can the business try new suppliers for raw materials? Will hiring third-party logistics service providers to reduce the expenses? Data analytics can answer such questions and more. The FMCG industry can unlock the mantra to balance expenses and returns. 


    Various factors such as seasonal changes, socioeconomic conditions, politics, ideologies, raw materials, pricing, etc., impact the FMCG market in many ways. Tracking every aspect of the business requires the right technology. 

    Data consultancy services offer by big data companies help businesses rebuild their systems to suit the volatile market requirements and become an industry leader. Data analytics will identify the gaps in the business strategies and prepare companies to be proactive when dealing with the market trends. 

    Business Intelligence using Data Analytics

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