Why FMCG Decision-Makers Struggle with Data-Driven Decision-Making

India is a vast country where the consumption of FMCG products is very high. There is a rising demand for products like oil, toothpaste, soap, etc. And this surging demand is not restricted to urban areas alone. Last year, rural areas of the country outpaced urban areas in consumption. 

Considering the wide distribution involved and the difference in consumer behavior and distribution, there is a lot of data available to be analyzed and used to improve distribution and sales in the sector.

Data analytics can be a potential game-changer for the FMCG sector. It can help FMCG companies to:

  • Analyze the different consumer behavior and basket trends in different regions of the country
  • Optimize the supply chain network to ensure that there are no stockouts and that the products are always available for consumption even in the most remote areas in the country
  • Improve forecast accuracy to fix the issue of excess inventory or less inventory
  • Understand what drives consumption and build products that appeal to the target group

FMCGs possess a treasure trove of data given the vast demography of the country. However, getting the data and analyzing it to make business decisions is not as simple as it might seem. FMCGs face several challenges in making data-driven decisions. 

Let’s look at the challenges they struggle with regularly.

Why FMCGs Struggle with Data-Driven Decision-Making

Lack of data strategy

Getting data is just one part of the puzzle. The real challenge is to know what to make out of the enormous data. To become data-driven, FMCGs need to plan a strategy. They need to define a goal, identify key stakeholders who will manage, monitor, govern the data, create a roadmap, establish KPIs to measure its effectiveness, and plan future situations. Without a strategy, the FMCGs will not be able to harness the full potential of the data. They will not be able to solve the problems or gather new insights for informed decision-making. Not having a strategy will lead to a complete failure of the data program and complete wastage of time and resources. It will severely impact their innovation and production plans and will thwart the probability of creating a new revenue stream. 

Lack of real-time data

Although historical data provides valuable information about how consumers think and behave, FMCGs cannot rely on it alone. Consumer needs and demands change frequently – some are predictable, some are not. For example, little did anyone anticipate that the demand for hand wash or hand sanitizer would increase during the pandemic. Nielsen had reported an 87% surge in demand for hand sanitizers in India due to the COVID-19 outbreak. Lack of real-time data will be a disaster for FMCGs as they will not be able to respond to market demands quickly. They will not know what’s happening currently, which would lead to delay in producing essential goods in the market and eventually lose out to competitors. FMCGs must invest in tools to collect data from all the consumer touchpoints in real-time and use technologies like AI to predict current and future demands and make decisions to produce them. 

Dependency on IT teams to make reports

IT teams’ role is to cleanse and convert unintelligible data into reports with actionable insights that help decision-makers make accurate decisions. Considering that this process requires specialized skills, the whole organization depends on the IT team to create the reports. This leads to delay, which, in a sector like FMCG is a strict no-no. It could impact the entire production, distribution, and sales of the organization. Sometimes the other teams have to rely on the IT team for something as minor as updating the report, which is a waste of time and resources. FMCGs need to ensure that these tools are more user-friendly and easily accessible to different stakeholders, so the reports can be generated easily and used by decision-makers to make timely decisions. 

A non-data-driven culture

Despite knowing the benefits of using data, FMCGs often fail to create a data-driven culture within the organization. Employees work in silos and use disparate systems, due to which the decision-makers have a very fragmented view of the data. To add to woes, decision-makers also face a tough time garnering support from the management who do not walk the talk. They do not exude confidence within other employees, which prevents the FMCG from becoming data-driven. Data-driven decision-making should be embedded within the organization’s DNA. The senior leadership must lead the way and make it clear that data-driven decision-making is important for the organization’s growth. They must walk the talk by backing data-driven decisions. Organizations must establish best practices, change processes, and train all the individuals to ensure that they work towards the common goal of becoming data-driven. This will help the FMCGs to innovate and grow more. 

Lack of actionable insights 

Decision-makers will have a tough time understanding the data and making accurate decisions if they are not provided with clear, actionable insights. They will not be able to unearth important insights related to market trends or supply chain issues, or consumer behavior if the data does not show any valuable insights or presented in an unintelligible manner. They will not be able to create any economic value if they do not respond to the market and customer demands quickly. Hence, actionable insights are so critical for the FMCGs’ growth. It will help the decision-makers to identify trends and challenges and respond to them quickly. 


FMCG is becoming extremely hyper-competitive given that both large and small FMCG players are vying for the consumers’ attention. Consumers have many choices. Digital platforms empower them further by allowing them to compare brands based on price, quality, etc. This change in landscape has made it mandatory for FMCGs to become a differentiator and gain a competitive advantage. Data is that one secret sauce that can transform the FMCG organization and make it profitable. The only way to unlock its potential is by finding ways to address the challenges. From building a robust data strategy to using the right tools and processes to optimize data, FMCGs have to prioritize data analytics to achieve their goals. They also need to partner with the right expert who can guide them in this transformation. 

At Kloudq, we offer end-to-end solutions to provide FMCGs with continuous data insights and support to build their decisions based on it. 

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