How Data Analytics is transforming the FMCG space


Data analytics is increasingly becoming a must-have for businesses of all types.

For FMCG companies, data analytics has become a gateway to new possibilities and opportunities for companies in the sector to make use of, with a ton of exciting potential to be uncovered.

There is a wide scope of prospects, considering the abundance of data available for data analytics, for traditional retailers, FMCG businesses, and e-retailers in terms of innovation, boosting sales, and making processes methodical.

Whether it is in the realm of real-time in-store analytics, web analytics for e-commerce sites, or as support for the back-end, data analytics provides a myriad of opportunities for interested companies.

Current state of the industry

Fast-paced and dynamic as the industry is nowadays, it has become important for companies to keep up with the evolving trends of the times. The FMCG sector has benefited and thus grown due to various factors such as changing lifestyles, increasing consumerism, high digital penetration, easy accessibility, better infrastructure, affordable data-usage packages, and more.

Generalized marketing and mass production has taken a backseat as data analytics have stepped up to compensate for the fluctuating customer demands. Innovation in products and design is critical for continued success with the newer generations, especially one that is digitally literate and has much more information for decision-making during the purchasing process.

Instead, targeted digital marketing and fast innovation have become imperative for the omnichannel shopping experience. For achieving scalability of business operations and wealth creation, data analytics is the way forward for FMCG companies.

While we do see the adoption of data analytics from big businesses in the space, the sector is for the most part still lagging behind many other sectors that have taken up data analytics for fast and effective results.

Traditional methods, such as field-based research through panels and interviews, still are the mainstay of many FMCG companies, which has its downsides in that it is costly and inefficient. It also leads to not leveraging a large portion of useful and organic data which can be used to build ideas for new products, processes, and marketing.

Potential of Data Analytics

Technologies like artificial intelligence have become hot topics with FMCG companies as they have come to value the role that data analytics can play in production and marketing, rather than merely for R&D purposes. Large FMCG companies have dedicated teams of data analysts working behind the scenes who ensure that the business runs smoothly and to solve business problems that they come across. Further, we also see tie-ups and partnerships between these companies and technology and data analytics companies who can provide those capabilities, instead of dedicating huge resources to building in-house teams.

As big data takes center stage in data analytics in every industry, a study by McKinsey and MIT reveals that FMCG companies that employ big data analytics in their operations outperform their competitors by as much as 5% in productivity and 6% in profitability. Considering the benefits, there has been an increase in its adoption by FMCG companies. While this may have had an impact on ‘legacy’ market researchers, it has also led to widespread adoption as the benefits are multifold.

AI and data analytics are especially helpful to smaller businesses, as it allows them to mitigate risk by making use of it, thus leading to decision-making becoming safer. This also allows smaller businesses to climb their way to the top as it engineers innovation in their product lines and marketing, that may have been previously deemed as “too risky”. It also allows these companies to have a ‘proof of concept’ early on in the innovation cycle, supported by predictive algorithms and AI.


While the notion of the importance of data analytics in business operations has gotten a grip on business executives, we have yet to see how much more it can reshape the FMCG space.

Data analytics brings notable benefits to FMCG companies looking to adopt such technologies. Further, Tesser Insights can assist in the development of the required capabilities for any business that wants to be on top while improving its bottom line. The possible positive contributions of data analytics to FMCG companies will be explored in our next post.