Seeds Of Change
I have to say that I am glad to be closing the chapter on 2020. There is so much I am not going to miss about the year almost gone.
And yet, in the midst of the year’s challenges, new dynamics emerged that are shaking up the FMCG sector – a shift to Direct to Consumer, for example.
We’ve seen this in categories as diverse as drinks, food, laundry and skincare. The strategy of going straight to shoppers does offer suppliers potentially lower cost to serve, the ability to curate and cultivate a closer relationship with the end shopper and an incremental volume boost. It incurs its own costs, however, in terms of expertise in creating a pack and despatch supply chain, managing customer interactions and support requests as well as requiring budget and expertise to generate sales from marketing cut through in often noisy categories.
Many brands have had what I would describe as a ‘meaningful dabble’ in direct to consumer this year and some brands have really gone for it and piled investment into this channel. There were concerns about what the supermarkets would think of suppliers creating their own routes to market. However, in essence suppliers face a new take on the age old conundrum of managing channel conflict, no different in some ways to having to serve discounters and traditional grocers at the same time.
Pretty much all the brands who we helped try direct to consumer liked it and will be back for more in 2021.
Of course, throughout the year we heard a lot about the dominance of Amazon and the other online platforms as well as the ubiquity and lack of accountability of the large tech firms. Whether this manifests in a change to taxation policy, for instance taxing retail delivery vans instead of high street premises, remains to be seen.
One thing for sure is the high streets up and down the UK need to be rethought and revamped.
Of course it’s an issue for the grocers as they have also found online hugely popular with the last set of numbers for November showing that 14% of all food and drink was online, making the Brits second only to China in our liking for online delivery.
Regardless to how the BREXIT and COVID endgames pan out, next year is going to be special for HRA Global – our 10 year anniversary and we have a new starter, Jess Blake. Jess has a first in Psychology from Exeter University (should I be worried that her arrival makes four psychologist majors in the team now)? She brings additional quantitative rigour and firepower to the team and gives us more strength in depth for FMCG consultancy and research projects. A fine middle distance runner, she’s already working on projects so do say hello if you find yourself on an email chain or Zoom call.
Every year I am more and more impressed with how the team is maturing and coming together.
As well as the day (and sometimes night) job, the team have individually carved out time to share their knowledge on a variety of FMCG and research topics; this month Kim has shared her tips on design thoughts, Poppy’s interest has been peaked by probiotics and Jess has written a piece on refill stations.
We’re good friends both off and on the pitch and clients are always commenting on how HRA Global has a family feel. Behind the scenes I can tell you that, like most families, we do have our moments but we work hard to keep the balance between challenge and support as well as structure and personal freedom. The team have simply been amazing this year with everything that we have been through. For the most part my job has been to support them and then get out of their way!
The office post-flash flood…
We’re battling on though our refurbishment and rebuilding after being flooded and we have plans to extend out the back of the office to incorporate an NPD kitchen to go with the research suite we are installing. So, with a vaccine, a Brexit conclusion, a refurbished office and an economic recovery of sorts there are high hopes for 2021.
After the year we have all had, I hope you, your teams and family get to unplug and spend some time not thinking about work and recharging your batteries ahead of the new year.
Merry Christmas and a prosperous new year!
Hamish
