A recent survey of major FMCG manufacturers suggests the sales performance and marketing budgets of many leading brands has been negatively impacted by the coronavirus pandemic.

The research by mobile app Shopmium found that 45% of FMCG brands have seen their sales fall in supermarkets and other grocery stores including online, due to the crisis. In comparison, only 23% of those selling on DTC channels reported a negative impact on sales.

Shopmium, which works with major brands including Nestlé, Nescafé, Mars and Unilever, surveyed 47 FMCG manufacturers and found that 63% have had their marketing budgets slashed or frozen since the beginning of March.

There has been a significant impact on experiential marketing initiatives, such as in-store and out-of-home (OOH) sampling with 93% and 90% of brands respectively saying budgets have decreased or ceased altogether. In-store promotions and point of sale (POS) marketing have also been hit, with 66% of brands reporting a decline or halt on these budgets.

The study also found that 72% of new product development (NPD) launches have been impacted with 13% put on hold indefinitely, while 61% of marketing plans have been affected by the cancellation of major events.

On the flipside, digital marketing budgets have been boosted with brands reporting a 36% increase in spend on social media, 31% on online retail media, and 22% on digital display.  According to the survey, this upward trend for digital marketing is expected to continue – despite the fact that 42% of brands anticipate a negative impact on sales for the duration of 2020, 67% are predicting an increase in spend on e-commerce in the second half of the year, while 84% expect social media budgets to increase, and 33% predict a rise in digital display budgets.

The activation tools brands plan to use more of in the next six months are also largely digital, with a predicted 64% increase in online retail media, 48% digital media with measurable sales and 36% in mobile promotion platforms. Although 39% also say they expect to do more in-store promotions.

Shopmium’s UK Head, Stuart Sankey, commented: “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. Challenges such as the stockpiling of products at the beginning of lockdown, supply chain issues, a pause on NPD, and supermarkets altering product listings based on necessary and in-demand items, have all had a significant impact on brands that have been forced to think on their feet as they try to adjust to this new normal.”

He added: “The rise in digital marketing spend and reduction on experiential marketing initiatives is set to continue for the foreseeable. And although many retailers are still in the process of getting online grocery fit for purpose, we don’t anticipate e-commerce slowing down any time soon.

“Rather, FMCG brands are actively seeking new ways to market, so as an alternative to initiatives like sampling, we’re seeing an increase in brands spending on tools such as mobile promotion platforms. We also expect to see more brands either creating or boosting DTC offerings, which have proved increasingly popular during lockdown, likely due to the decreased availability for certain products in-store and on supermarket websites.

“These continue to be challenging times for many FMCG brands, with almost half predicting a negative impact on sales over the rest of the year, but things are looking up. The increase in digital marketing budgets is a clear signal that the industry is on an upwards trajectory, and as we enter 2021, we expect the forecast for most FMCG brands to be much more positive.”