45% of FMCG brands report sales being negatively affected by COVID-19

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25th June 2020 01:51 - FMCG

45% of FMCG brands report sales being negatively affected due to COVID-19: A survey has revealed that more than 45% of FMCG brands questioned in a recent poll have been negatively impacted by the coronavirus pandemic. 

The survey by FMCG mobile app, Shopmium, questioned 47 FMCG manufacturers, and also found that the impact was not as negative for direct-to-customer (D2C) sales.

The research revealed that of the brands polled, nearly two-thirds (63%) have seen a reduction in marketing budgets since the onset of COVID-19 in March. Looking at budgets for experiential marketing, 93% brands said they have had budgets slashed or stopped in their entirety, while nine out  ten (90%) have seen decreasing budgets for out-of-home initiatives. Point of sale (POS) marketing has also been affected, with 66% saying they have experienced a fall in budgets or a total withdrawal. 

Also impacted by the pandemic have been new product development launches, with 72% of the brands polled reporting they have been affected, while six in ten brands said they have been impacted by the cancellation of major events. 

Digital marketing budgets 

The period since March has seen, however, a boost for many brands' digital marketing budgets, with many seeing increased spending, according to the findings. More than a third (36%) said their social media budget has gone up, while just under a third (31%) reported a boost in online retail media. Just more than fifth (22%) said they have seen a digital display increase. 

The second half of 2020

Around two thirds (67%) of the brands polled said they expect to see an increase in e-commerce spending as we go into the next six months, that's despite two-fifths expecting a negative impact on sales for the year. 

Social media budgets are also expected to increase further in the next six months for 84% of the brands polled, while a third (33%) believe they will see an increase in digital display budgets. 

Shopmium’s UK head, Stuart Sankey, said of the research: “The Covid-19 pandemic has rocked the FMCG sector. The sudden and unprecedented nature of this crisis means brands have had to adapt overnight to major changes in social and consumer habits"

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