How e-commerce platforms have become a launchpad for innovative FMCG product launches
By Amrinder Singh, Director, Bonn Group of Industries
E-commerce is reshaping the retail market in India and globally. Impelled by the lockdown due to COVID-19, several FMCG companies used the e-commerce platforms to launch products. This was even before the products were made available in the traditional retail shops. The stringent restrictions and slow consumption forced the businesses to halt the production units during the lockdown. But, the e-commerce platform brought a ray of hope for the brands giving a push to their sales. Companies have also been able to successfully promote their brands through online first or the online-only strategy for the niche or premium brands, which is usually missing in offline retails shops. To the extent that, some reports suggest that companies were able to generate up to 8% of sales via e-commerce. More than 100 brands launched their products online first during the last year’s Amazon Prime Day sale.
What makes online a laboratory for new launches?
Unlike traditional retail, a basic eCommerce store can be up and running in just a few clicks at a much lower cost. An e-commerce channel allows companies to avoid many large, upfront investments that traditional retail can incur, like an inventory, physical storefront, or payroll. An online store lets companies sequentially build their business as the sales grow. At the same time, use of a mix of online touchpoints to engage multiple audiences at once helps the companies reach out to new customers, serving the niche markets.A study suggests that the e-commerce industry in India has been growing exponentially and is expected to become the second largest e-commerce market in the world by 2034, surpassing the US market.
Shoppers commonly resort to online research to compare brands or prices or even check inventories. Brands making a digital presence ensure that the potential customers find their products easily. One added advantage of selling products online is that it allows companies to collect, measure, and analysis customer data. This data helps companies get constant feedback and actionable insights, pushing them to further innovate for better customer experience.
Benefits of Selling Direct-to-Consumer (D2C) with E-commerce
More than ever, consumers today start their buying journey by making purchases online. This has given a big boost to the direct-to-consumer selling models. For companies, one major advantage of this model is that brands can reach their customers anytime, anywhere.Prior to the internet era, brands largely relied on resellers to reach their customers. Websites enable the brands to broaden their market globally.
E-commerce helps the companies sustain their market segments as the physical stores are harder to maintain. One very important aspect of D2C model is the company’s direct engagement with the customer. Shoppers love when the brands directly interact with them and this helps further expand the opportunities for the brands.
The pandemic compelled the consumers to alter their preferences, but now both the companies and consumers like the change. Keeping up with the trend, the companies are gearing up for more launches in coming future. Major FMCG giants are prepared to launch their products exclusively in the online market.
For this many online exclusive innovations are in the pipeline. In the offline format, it takes time for the seasonal products, especially, to expand and reach the target group. However, the online channel squeezes the time for such launches.
