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What are the top fraud challenges for FMCG retailers in 2022?

The digital shift of long-standing FMCG brands proves that old dogs can learn new tricks. But ecommerce fraud is a whole new beast. Are you ready for online fraudsters?

17 March 2022

What are the top fraud challenges for FMCG retailers in 2022?

Fast-Moving Consumer Goods (FMCG) brands have made the move online to meet the changing consumer needs and stay ahead of the competition. The ecommerce value share of FMCG may still be under 10%, but the pandemic has accelerated this growth five years ahead of its pre-covid trajectory.

Although lockdown restrictions have eased in many places, customers seem bound to this more convenient shopping experience. According to Nielsen, it is no longer a question of if people will buy online, but how much they’ll spend and how often they shop. So, how are traditionally brick-and-mortar businesses adapting?

Find out more about changing FMCG business models and how this is impacting fraud…

Subscription or bust

The pandemic has changed the type of convenience that consumers crave. Subscription businesses have consistently grown 5-8x faster than traditional businesses. But this has massively increased over the last few years. Now almost anything can be ordered via subscription and delivered directly to us as often as we like.

The growth has also been driven by several newcomers in the market. A good example is SMOL, who deliver eco-friendly cleaning products on a subscription basis in the UK. These smaller companies have made the most of digital innovation to deepen relationships with customers and deliver services that increase in value over time.

But how might fraudsters be targeting your subscriptions business?

Big brands playing catch up with DTC

As we’ve touched upon, many FMCG brands have expanded their direct-to-consumer (DTC) channels. With small startups making a lot of noise in the market, DTC is an effective source of competitive advantage for incumbent brands. We don't have to look much further than the rise of DTC toilet paper brands, who have been giving FMCG giants a run for their money.

Even household names, like PepsiCo and Kraft Heinz, are bypassing big supermarket chains to launch DTC offerings. The pandemic has made DTC more viable but many still need to improve their understanding of e-commerce. Does your business have the right fraud prevention measures in place?

Cleaner and greener brands

Now more than ever, consumers are shopping with their values. And they are willing to put in the effort to find brands that match their ideologies. Businesses that offer greener or more ethical products or services will win hearts and wallets.

The business case for supply chain sustainability is growing as it is seen as vital to delivering long-term profitability. This is increasingly relevant as the market share of DTC and subscription models grow.

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