FMCG

CPG (Consumer Packaged Goods)

BUSINESS PROCESSING

We offer FMCG organisations the opportunity to remove complexity across a full range of business processes. By unburdening themselves of back office functions which support their operation but are essentially peripheral to their vision and mission, we give these customers time and efficiency to focus on what they do best. The result is more flexibility and greater efficiency in the face of formidable challenges. A leading UK health and beauty organisation already trusts us to process purchase orders, negotiation, orders-to-cash and financial planning. When required, we can also process payroll, learning and development, recruitment, and HR administration as well as offshoring services which can deliver advantages including speed to market, back office transformation, on-demand business, improved customer service and cost optimisation.

TECHNOLOGY

We offer extensive technology capabilities across a variety of industry sectors. In consumer markets specifically, we provide third party application implementation, custom development, application maintenance and support, IT hosting, and infrastructure services for a leading UK health and beauty organisation. We also design, build and run the software that supports a range of business processing solutions. We embed our intellectual property (IP) to create a solution faster and more cost-effectively than our customers can themselves. We can also provide customers with Total IT Outsourcing (ITO) solutions – a single point of supply for an end-to-end managed service.

PROCUREMENT

We are experts in supporting procurement professionals with services including sourcing, spend management, procure to pay (P2P), system management and software solutions. In this industry, we already provide sourcing and category management for a global leader in cosmetics and beauty products and well as sourcing and procure to pay for a leading UK health and beauty organisation.


INDUSTRY OVERVIEW 

2013 will be the year the FMCG sector (and the retail sector alike) confirms that multi-channel distribution is the future.

That conclusion starts with the fact that for many retailers 2012 was definitely a year to forget. 

As the FT reported in October 2012, a net total of 953 stores closed in the first half of that year – equating to 20 stores a day.1

The continuing collapse of bricks and mortar outlets is a major force driving FMCG brands ever-more forcefully in the direction of multi-channel distribution, online customer engagement and overall advertising activity.

Thus, according to Nielsen2, FMCG was the largest sector by ad spend market share in 2012. Roughly a quarter of all advertising dollars spent (25.1%) originated from FMCG organisations and the sector delivered a 6% increase in ad spend through to September 2012.  

A hefty chunk of those dollars was directed online as FMCG once again contributed to healthy growth figures for Internet display advertising in particular and online media in general:

“The Internet Advertising Bureau (IABUK) confirms the consumer goods  sector is now the joint biggest spender in terms of online advertising and accounts for 15.8% of the total spend. Retail is the fourth biggest spender, accounting for 10.6% of the total adspend.” 3

Online and offline alike,  FMCG and retail marketers are spending these considerable sums not simply to generate immediate sales but to build their brands, differentiate themselves and create strong relationships with their customers.

As part of this strategy, mobile marketing is looming particularly large:

“… the sectors with the most significant percentage increase in mobile   marketing over the last six months are FMCG (up 267%), media (up   150%) and tech & telecoms (up 150%). Looking at the sectors with the   greatest degree of mobile optimisation,  FMCG again comes out on top   with 79% of the 14 sites listed being optimised, followed closely by   automotive with 73% of the 26 sites listed     being optimised. FMCG’s    fast uptake of mobile optimised sites in this short time frame suggests mobile is becoming a priority for this sector.” 4

Of course, none of this means that bricks and mortar are entirely irrelevant for FMCG or retail – but their role and relative importance are certainly changing.

That change is typified by the advent of “showrooming” as increasing numbers of customers test a product in-store before making a purchase on their mobile device.

If this emerges as the de facto retail format of the future, FMCG brands are hardly likely to complain.

After all, a sale is a sale!

References:

1 http://on.ft.com/11uFvPA
2 http://bit.ly/V67E7n
3 http://bit.ly/XsXPjE
4 http://bit.ly/115FE6c

Business Issues

FMCG shares many of the challenges facing the retail sector.

Principally, working out how to sell to consumers who are finding genuine difficulty in making ends meet.

As The Economist recently reported: “Basic consumer goods were long assumed to be more or less recession-proof. Shoppers may not be able to afford Dior dresses or Cartier watches, went the argument, but they still need loo paper and detergent. Yet people are finding ways to save money even on daily necessities. They are shopping less and with more purpose. Some people deliberately pick up a basket rather than collect a trolley in supermarkets, to prevent themselves from buying too much. Some buy smaller packets, which are cheaper, or huge ones, which are better value. Many make do without air fresheners, hair conditioner and other fripperies once deemed essential. Many scour the internet for special deals."1

This threat to revenue and margins is exacerbated by volatile commodity and fuel costs.

In addition, consumers increasingly expect multi-channel access to FMCG brands, driving a need for companies to spend on technology and climb a steep learning curve to understand how new marketing methods build on customer engagement.

It is in this context that the growth of digital media in general and social networks in particular for the marketing of FMCG brands is both impressive and instructive.

The Internet Advertising Bureau (IABUK) reported in October 2011 that UK online ad spend had soared by 13.5% fuelled by a surge in FMCG advertising and a triple-digit increase in online video.2

These remarkable figures are given further context by a report in the FT which stated: “Display advertising was the best performer within the sector, with industry experts saying that buyers in the fast-moving consumer goods (FMCG) market had discovered that video advertising on the internet, particularly through social media websites, could be a cost-effective way of reaching consumers."3

The shift to these media illustrates a new emphasis on customer engagement: by providing content that consumers choose to share, FMCG brands are earning the right to word of mouth advertising (always the most effective kind) amplified on a huge scale.

Just like telecommunications companies, owning the customer relationship has never been more critical for today’s FMCG organisations because their customers have never had so much choice or more reason for switching brands in search of savings.

Focussing on this strategic imperative can provide a prompt for FMCG companies to outsource business processing and IT services that add cost to the business and distract it from its core purpose.

1 http://econ.st/9m1pvP
2 http://bit.ly/nZ7Gf1
3 http://on.ft.com/oVRbR8

Case studies

Perfect Product Testing
Technology Services
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Perfect Product Testing

Technology Services

CHALLENGE

To help a renowned manufacturer of laptop PCs optimise its product testing resource

SOLUTION

01 Offer immediate and attractive cost savings from our testing laboratory in Singapore

02 Demonstrate world-class credentials in Product Assurance (PA)

03 Provide the required resources for qualifying new systems, sub-systems and applications for the customer

RESULTS

1 The customer can now rely on support from over 40 technically certified professionals spread between Japan, Singapore, Malaysia and India

2 We have consistently achieved customer satisfaction levels of more than 90% in PA services

Customer satisfaction levels of more than
90%

12 Years of Success in Logistics
Technology Services
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12 Years of Success in Logistics

Technology Services

CHALLENGE

To provide peace of mind for one of the biggest names in logistics by ensuring high availability for their applications

SOLUTION

01 Provide best-in-class Application Management Services

02 Build strong relationships across multiple business units

03 Manage data and transactions for the customer’s Enterprise System Integration

RESULTS

1 The customer can now be confident that their applications are secure and available

2 We have removed a significant workload from the customer by managing the Enterprise System Integration: 280+ live customers completing up to 700 million transactions per year

3 We contribute to the customer’s IT quality certification such as ISO/IEC 2000

Transactions managed:
700 million per year

Making The Leap From ‘Good’ to ‘Great’
Managed Business Processes
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Making The Leap From ‘Good’ to ‘Great’

Managed Business Processes

CHALLENGE

To help a top global insurance broker make its next big leap: become the provider of choice for integrated employee benefit solutions and grow revenue by 50% within five years

SOLUTION

01 Enhance operational performance, optimise process efficiency, and instil a mindset of continuous improvement

02 Put to work our expertise in offshoring F&A processes including accounts payable, accounts receivable, general accounting, reconciliations, taxation, fixed asset accounting and reporting

03 Implement process improvements in a timely and effective way

RESULTS

1 Costs cut by 40% due to labour arbitrage

2 Quality up from 95% to 99.5%

Costs cut by
40%

Quality lifted to
99.5%

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