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3 CPG Recovery Strategies That Can Enable a Revenue Breakthrough in June

With the rising cost of production, brands had no choice but to pass it on to their customers. It led to the highest rate of inflation in 11 years. Some relief, however, came by with the lowering of the retail rate of inflation to 4.29%  in April 2021 from 5.52% in March 2021. Businesses also have to contend with dampened consumer buying.

Still, it’s not all gloom and doom. CPG businesses can gain control of the markets and their businesses with a few recovery strategies.

Recovery Strategy 01: Lower Inventory levels

Have a look at the images below.

IMAGE 01IMAGE 02

Which image appeals to you the most? Is it image 01 with the fewer apples? That’s because the image conveys a sense of uncertain availability which leads to FOMO for the consumers. Consequently, it drives consumer demand.

As retailers are rethinking their assortment strategy and stocking less SKU units, consumers are piqued with the fear of missing out on their favourite products, and are themselves starting to stock. And it’s not just a few people, but all of us. Every time we hit the grocery store, we buy more of what we want. More biscuits, more ice-creams, more snacks and more everything that we feel might not be there in the shop the next time. Also, we’re not even sure when’s the next time we can visit the store. Abrupt lockdowns are making it impossible to streamline our daily lives. We buy supplies for a one-month lockdown and the government just extends it at a flick. This leaves consumers with no choice but to be prepared, which has resulted in the return of the rise of global demand for CPG.

Recovery Strategy 02: Rethink Retail with Digital

With disrupted supply chains, brands find it hard to maintain transactions  with their distributors and retailers. With sales teams not being able to step foot in the market, FMCG companies are rapidly losing their market visibility and share. A McKinsey report shared that to recover from this pandemic, FMCG brands need to focus on four cornerstones of a strategy, focusing on: recovering revenue, rebuilding operations, rethinking the organization, and accelerating the adoption of digital solutions.

If you think about it, at the helm, it all starts with digital transformation. An automated supply chain helps in building operational efficiency and recovering revenue rapidly. Whereas market scans can help the organization understand what the market demands of them, and rethink the organization propositions accordingly. 

Recovery Strategy 03: Supply Chain Financing

The wheel of retail is dependent on a lot of stakeholders. While FMCG giants are able to cope with the lockdown despite all odds, the same is not true with their retailers. As small businesses, these players largely rely on rolling working capital to make ends meet. In 2020, the Federation of Automobile Dealers Association ( FADA) found that over 275 car dealerships closed down and still continue to do so as debt on car dealers increased to the range of 20% to 40% in FY21 itself. 

One way to bridge this gap is by the influx of cash to help these small businesses stay in the game. CPG brands need to sanction working capital loans to the members of their supply chain. With the continuous flow of money, small businesses can omit the small gaps in operations and stay afloat. 

Ideally, a supply chain automation provider should be able to provide all these solutions, but most retail technology companies focus only on one part of the pie, whereas the whole pie needs to be baked properly. As a retail intelligence organization, we at Bizom understand the level of expectations and dependence an FMCG client would have from a solution provider. For this, the Bizom platform provides a plethora of solution options catering specifically to the problem the client is looking to solve.

Are you facing any problem in your retail business? Let us help. Connect with us at marketing@mobisy.com and let’s discuss.

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