Optimizing Technological Applications In The FMCG Industry
While technology occupies a vital cog in the Indian FMCG wheel, it still has a long way to reach its maximum potential. The infusion of technology into different realms of human operations towards development and progress has been a way of life itself for as long as anyone remembers. With each passing day, technology is becoming an increasingly vital component in the way we interact, work and live. And as sectors and industries boom in the 21st century, courtesy - technological applications across the board, it could not have been a better time to be in business. Most industries have found their way around relevant gadgets & softwares and have engineered systems to not only make them cost-effective, but also ease the lives of end consumers. The FMCG sector is no exception to this. From bar codes to cashless payments and RFID and to NFC, both present and future alike look exciting for the business. But at the heart of this technological hurricane of sorts lies one pertinent question Have these technologies been optimized and perfected enough for tomorrow?
Since the advent of the bar code, it has arguably been one of the best technologies to be adopted by the FMCG industry. Providing ease of storing hordes of information in a consolidated format and being accessible by a mere scan, the industry has found excellent utilities for bar codes. Its applications have been perfected to such an extent that hardly a replacement for it is in sight for another odd decade. Given its benefits, mandatory implementation of bar codes in packaging have also helped FMCG players ward-off several me-too brands and counterfeit products off shelves as an extension. It is for such reasons beyond the obvious that critical governing bodies in the food sector like Food Safety and Standards Authority of India (FSSAI) are pleased with applications of the technology.
Another brilliant example of technological applications in the FMCG sector is that of cashless payment methods that have come around in recent years and received a boost particularly during the period of demonetization. With more m-wallet players entering the space, competing players have been ferociously vying for the consumer’s attention in the guise of heavy discounts and lucrative offers. In the midst of all of this, it is only the consumer who stands to gain out of the battle. Yet, it is important to consider that for a technology like cashless payments to realize its full potential, a number of issues still need to be creased-out. Connectivity, for one, is of paramount importance as often weaker GPRS signals lead to failure with debit or credit card payments and absence or presence of a low internet signal cripple the usage of online payment methods completely. While such issues might be unheard of in metros and Tier-I cities across India due to superior connectivity, it is a pressing challenge in the hinterlands that has deterred it from being widely implemented there.
On the converse, while the aforementioned examples are manifestations of player centric and consumer-centric technologies, there are several other ones which are still in the works and far from being ready for implementation. Radio Frequency Identification (RFID) and Near Field Communication (NFC) are two such technologies. While the benefits that can be harvested from usage of RFID are manifold, the single largest barrier for implementation of this technology is the cost component. Implementation of RFID at a single retail store can range anywhere between Rs.20-24 lakh. NFC, on the other hand, created ripples in the industry when it was first talked about. However, not much wide efforts have been made to bring this to see the light of day. As is the case with any technology, it cannot be fully implemented unless every party involved chips-in. To begin with, the onus lies with modern trade outlets, which contribute approximately 10 percent of the FMCG market and have a significant influence in the way sales are converted. And for technologies whose usage depends on a fair amount on the end consumer, it is imperative that the buyer and seller both meet halfway. Consider QR codes, for instance, which require consumer acceptance in the purchasing process as much as from the seller implementing it. While certain m-wallets and even media channels have taken a crack at sensitizing consumers to it, it has not really caught on.
Considering this, it is therefore safe to say that while we have made notable inroads into manual processes and replaced them with more effective technological solutions, we are still staring at a future where much work remains to be done to harness the potential of automated systems. And in a country with geographical, demographic, economic and cultural vastness as India, the efforts have only just begun.