Also called consumer packaged good, a fast-moving consumer good (FMCG) is any product bought in supermarkets, grocery stores, pharmacy and similar stores on a fairly regular basis. In other words, these are household (essential or non-essential) items that sell quickly, in large volumes. Products such as soft drinks, snack foods, pharmaceutical items, cosmetics, detergents, household and personal care goods, etc. are FMCG. Also, these always-in-demand (almost) products are priced low and have a short life. If not consumed within a specific time period, these goods would expire or no longer be consumable.
FMCG is primarily sold offline through brick-and-mortar stores. The difficulty selling these goods online lies in the fast-moving nature of these items. Buyers buying FMCG want instant gratification. They are not usually willing to wait for a few days for the product to arrive, especially with the product availability being so widespread. Also, since FMCG margins are low, online sellers cannot compete with offline retailers on the pricing front. FMCG sellers’ lower margins are compensated for by the volumes, by the way.
Several online retailers have come to learn and acknowledge this fact and are therefore incorporating innovative sales tactics to make the consumer shop for FMCG online. Some of the various initiatives include “click and collect”, and free one day and same day delivery services. As per the click and collect model, buyers order goods online and pick the item from the particular retail store once they are notified about the same through a text message.
Branding and Packaging
Some of the biggest companies or brands of the world sell FMCG. But there are also store brands or private labels selling FMCG. Since FMCG is bought frequently and without much research, FMCG brands have little-to-moderate brand loyalty. The key to selling more is pricing the products right and offering maximum value for the money. Also, since FMCG comprises both essential and non-essential offerings, sales of certain items could take a hit during difficult financial climates such as a recession.
The products sport unique packaging designs that helps them differentiate from the competition, particularly when the goods are positioned abreast on a big box store or grocery shelf. This emphasis on packaging is the reason why FMCG is also called consumer packaged good. Besides packaging, mass advertising and price promotions also play a big role in sales.