Adapting to New Retail Dynamics- Challenges & Trends in OEM and FMCG Sector

Marketing | 5 minutes to read

21st Dec, 2021

Both OEM and FMCG segments have faced different challenges in the last year and a half, but technology integration has all been the same. From embracing contactless payment models to imbibing planogram automation, retailers need to fill gaps between traditional and modern strategies to meet customer expectations and drive sales.


    • Among the trending retail solutions in OEM and FMCG sector are omnichannel trade and contactless payment models to support sales across all channels

    • OEM brands are capitalizing on digital technology to supplement walk-ins with call-ins powered by easy financing options

    • FMCG brands are championing the acceptance of integrated retail management software with planogram automation to circumvent the limitation of physical store space

    • offline retailers have to adopt digital payment and home delivery mechanisms as an essential ingredient in the retail mix to stay relevant

    In a rapidly evolving business environment, retailers from different segments have had to re-evaluate their strategies to better prepare for the road ahead. The challenges and opportunities are different for every retail segment demanding tailor-made retail solutions to drive sales. Physical retailers were caught in a fix with a sudden breakdown of supply chains, the rise of digital commerce, and stay-at-home normal. Shopping became remote with contactless payments and delivery mechanisms, forcing retailers to reengineer their operational mechanics.

    Rummaging through the details, some of the prominent features that shaped the business decisions of brands in the last year and a half are digital technology, hygiene awareness, and change in customer experience. We discussed these three features in detail in our previous blog, “Breakthrough Changes and the Rise of Digital Technology in Retail.” Customers today desire a more integrated and personalized experience at a store. Let’s look at trending retail solutions that leading OEM and FMCG brands have adopted to meet customer demands at their preferred buying channel.

    Strategies championed by OEM brands to create evolved customer experiences 

    Leading OEM retailers had long begun their journey on the digital transformation of their stores which helped them maintain ground even during the pandemic. However, any such digital makeover was slow and treated as luxury overheads. The customer buying journey has changed dramatically in an era when home has become the place to learn, live, work, and even shop. All these factors, coupled with easy accessibility of online shopping, have led to the acceleration of omnichannel preferences among customers.

    OEM was one of the few sectors in retail that saw a surge in sales during the pandemic. As home became the place to learn and work, customers required computers and mobile devices to bail them out. Brands recognized the need to bring the accessibility of the stores to consumer’s fingertips. They are capitalizing on digital infrastructures like websites and apps to supplement walk-ins with call-ins. Furthermore, brands now employ dedicated virtual sales assistants to provide product demos via video calls, product comparisons, and more. A flexible financing scheme in OEM retail has also been a turnkey strategy to maximize the bottom line.

    Speaking on the issue, Sumita Bhatia Vijh, National Head Retail Business, HP Inc, stated, “As the store call-ins have now replaced the walk-ins, customer expectations from store promoters have also changed. They expect the same kind of information and engagement from the promoters over calls. Thus, it is crucial to train and enhance skills of in-store promoters to not only demonstrate the product to the customer but also influence their buying decisions.”

    Challenges and opportunities in the FMCG segment

    The biggest challenge for FMCG retailers was to maintain product movement to last-mile stores. Brands and distributors struggled to keep the supply chain alive. Starting with the supply chain disruption at the source and the consumer endpoint, FMCG brands had to pool their field force to transport products from one place to another. They expanded their supply chain and delivery networks to keep the food supply chain busy and make products available at the stores during the lockdown.

    Among the turnkey developments in the FMCG segment was the emergence of omnichannel trade, adoption of retail management software, and planogram automation. In the words of Sarath Krishnan, Director – Consumer Sales, Cargill GEOS, “Retailers are increasingly adopting mobile-based software with the integration of automated retail planogram software to overcome the limitations of physical store space. They can now list the entire assortment of their products to the shoppers with price transparency. A physical retail store has a limited space that allows retailers to display a limited amount of SKUs. Whereas, when the store moves online, it is part of a virtual space where the entire assortment can be made available to shoppers.”

    Therefore, with the emergence of omnichannel customers, manufacturers must target customers across all channels effectively. It is imperative to customize offerings based on customer demands. The other positive change that is going to stay in the industry is the digitized payment models. While the physicality of product movement remains unchanged, the digitization of the movement of money from one pocket to another has changed completely.

    Espousing contactless payment models for improved retail experience 

    With the covid-19 nearing the endemic stage, an extra spurt in offline shopping is expected- a trend witnessed in countries like the USA where online commerce is 11%, down from 16% last year. However, this needs some changes at the offline retail space, especially on the payments front. Most customers opting for offline shopping prefer contactless and quick payment models for quicker sales processing.

    Also, there is a threat of disintermediation among the last mile retailers, particularly the general grocery stores. This is coming through a blend of contactless payments and last-mile delivery chains. In such a situation, home delivery will become a business-critical part of the retail mix. Highlighting the importance of digital payments, Shankar Nath, Co-Founder, Junio, said, “The resistance to digital payment is going to fade out. The kids who spend 8 hours to 9 hours on online classes in a day will be digitally native. Once this set of people reach adulthood, digital delivery will be the only thing they would know. So offline retailers have to adopt digital payment and home delivery mechanisms as an essential ingredient in the retail mix to stay in the race.”


    Most of the changes hailed as the by-product of the pandemic were underway long before the contagion wreaked havoc on humanity. Be it embracing new customer trends, workforce trends, digitization, imbibing new technologies, etc., had already started within large retail chains Brands need a composite phygital model to drive personalization and add value for the customers. Also, streamlining payment models will support quicker sales dispensation and manage crowds within stores effectively.

    Watch our webinar recording “Retail blueprint in the New Normal” to get an inside scoop on modern retail challenges and how retailers are scheming their systems to keep up with constantly changing customer demand and experiences, with a laser focus on increasing customer acquisition and brand loyalty.

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