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 sale!