market segment report consumer products and retail€¦ · the consumer packaged goods industry has...
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M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
I N D U S T R Y O V E R V I E W
Consumer buying behavior, competition among brands and digital transformation are collectively causing massive change in the CPG and Retail markets throughout the world.
The way products are being produced, sold and delivered is changing throughout the entire industry making CPG companies rethink their processes from beginning to end. Some of the most significant changes are happening in the food and product manufacturing space with automation and co-bots increasing speed and output. Job skills are evolving to become more
digital and machine focused to increase efficiency and employee productivity. The CPG workforce is responding with a demand for upskilling and reskilling in additional to new ways of work like freelancing. These changes are restructuring the talent and employer relationship completely in the Retail and Consumer Product vertical like never before.
The industry is also being heavily impact by changing regulations and trade wars between some of the world’s largest importers and exporters. Navigating these changes within a
tight labor market and high volume of job openings is proving to be a challenge among Consumer Products and Retail companies around the globe.
Pontoon is here to help our clients understand the changes in the industry and prepare for the future of work. We have the tools to implement MSP, RXO and Total Talent solutions that will ease hiring in a candidates’ market, reskill the workforce for future jobs and find alternate workers to fill any need a hiring manager may have.
As said recently by World Economic Forum:
The Retail and Consumer Packaged Goods industry will change more in the next
10 years than it has in the past 40 years
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
O U T L O O K B Y R E G I O N
The following sub-industries will see significant
growth throughout LATAM in the coming years:
Sub-sector Compound Annual Growth RateBeauty products sector 3.6% through 2021Consumer electronics sector 4.6% through 2023Food and beverages market 9% through 2023Non-alcoholic beverages sector 3.5% through 2021Nutrition and dietary supplements 8.8% through 2023
Consumer Confidence Index 2019 based on political and economic outlook:Colombia 105Mexico 100Peru 95Brazil 95Chile 90Argentina 70Venezuela 65
Source: Americas Market Intelligence
Challenges Within The Region
Taxes vary widely within countries, regions, cities and
rural areas
Poor infrastructure results in surcharges for goods
delivery up to 15%
P R O M I S I N G G R O W T H
Latin America and South America
Sources: LS-International, AmericasMIM A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
Stagnant growth in Consumer Products and Retail in Europe has been effected by: • Political uncertainty • Low consumer confidence • Threat of raising interest rates
U N S T E A D Y C O N S U M E R C L I M A T E S A L E S I N E M E A
Europe
Brexit Effects on CPG CompaniesProduct standard and safetyCurrently the UK is abiding by the EU’s product stands for safety and labeling Post-Brexit, products from the UK will likely lessen their adherence to the strict standards due to changes in production costs and varied marketing communication practices
On the other hand, E-commerce business is increasing a rapid pace
7 of the 10 fastest-growing companies in the Europe 500 are consumer brand manufacturers
Sources: Bloomberg, Deloitte, Digital Commerce360
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
Talent Shortage deepensThe UK will have a harder time filling roles at all skill levels in the CPG industry since EU nationals will no longer be able to easily work in the UK.
Two options to address this issue: 1. Prepare to provide visa sponsorship to workers willing to
come to the UK from outside the EU2. Relocate some operations outside the region where talent
is more available
G R O W I N G C O N S U M E R M A R K E T A C R O S S A P A C
Asia Pacific
ChinaConsumer buying power in China has significantly increased and will continue to do so in the future
2005 2016 2025
Annual Household Income in China
Affluent >222,000 renmnbi / > $35,000
New Mainstream 103,000 - 222,000 renminbi / $16,000-$35,000
Mass 37,000 -103,000 renminbi / $6,000 - $16,000
Poor <37,000 renminbi/$6,000
Maximum buying power
China’s consumerism has also been fueled by accessibility to a vast online retail landscape
$800 billiononline retail market – largest in the world
18%growth rate per year in 2017 and 2018
Automation in Consumer Goods manufacturing throughout Asia will cause of shift in the workforce
• Low skilled workers will be displaced• Increased difficultly sourcing high skilled worker such as data
scientists and automation engineers
Source: McKinsey
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Consumer Products and Retail
C O N S U E M R M A R K E T C H A N G E S
North America
Traditional grocers are seeing tight margins shrink more and a shift in consumer buying habits
• Food-service revenues already exceed food-at home sales
• Almost half of US millennials say they rarely prepare meals at home
As a result, companies are employing less in-store workers and more digital customer experience workers, order fulfillment and delivery fleets
Consumers and companies alike want data privacy regulations implemented to protect personal data often exchanged during online purchasing transactions
60%
Nearly 60% of U.S. consumers believe the federal government should regulate how
companies use consumer data
66% of American companies believe the U.S. should implement regulations similar to GDPR, which was likely in response to recent Congressional hearings
and privacy disclosures
66%
Sources: DigitalCommerce360, McKinsey
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
I N D U S T RY O U T L O O K B Y R E G I O N
C O N S U M E R I S M H A S B E C O M E D I G I T A L
Future
Purchases become automated
Buying habits are tracked, ordered and arrive at your home routinely
“Alexa order my shopping list”
By 2020, more than 3.3 billion users will have virtual assistance on their devices
Mobile wallets are expected to surpass both credit and debit purchases by 2020
Past
Technology assisted purchasing
In 1994, 98 million Americans purchased $60 billion of products through phone ordering from catalogs and TV shopping channels
Amazon arrived in 1995
Present
Online shopping becomes personal
Consumers place value on having a custom tailored shopping experience
88% of consumers say they’re more likely to shop with retailers that deliver personalized and connected cross-channel experiences
79% of organizations that exceeded revenue goals have a documented personalization strategy
Sources: HostingFacts, Money.com, NChannel
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Consumer Products and Retail
N E W W A Y S O F S E L L I N G T O C O N S U M E R S
Direct-to-consumer brands
Directly to consumer selling-eliminating the retailer
Consumers appreciate the direct attention from the brand
and brands enjoy higher margins by removing the costly
distribution channels
75% of consumers prefer personalized
experiences from their CPG purchases
Pop-up storesLarge brands are launching experimental products in with temporary and fast go to market strategies
Create buzz
Sell limited quantities merchandise for a short time
Collect customer feedback
Close and move to another temporary location
Freelancers are the ideal workforce to staff this type of retail environment.
Benefits of freelancers include: o Flexible, on-demand scheduling
o Lower cost or no benefits to cover
o Understanding of a short term commitment
o Untapped worker pool (34% of the American workforce is freelancing)
Sources: Deloitte, VisionCritical, Inc.com
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
Selling products and goods seamlessly through physical and digital platforms
The Last Mile
In today’s demanding consumer market, companies deliver goods to consumers as fast as possible, with flexibility and cost efficiency
JD.com
In-trunk deliveries
In-home deliveries
Amazon DHL/ Amazon
Parcel Lockers
Fetcher
In hand delivery via smart phone
app locator
Consumers want simple but effective ways out of acquiring goods
Elements of omni-channel retailing include:
• Targeted product ads based on search history
• Buying capability across any digital platform, device or physical location
• Ease of ordering – payment options, one-click ordering, delivery options – curbside pickup and returns any way
Why is this important?
73% of shoppers reported using multiple channels to purchase goods Consumers expect 2-day or immediate delivery, this demand has spiked the need
for more drivers and many have been filled by the gig economy
O M N I - C H A N N E L R E T A I L I N G
Sources: Money.cnn.com, Shopify, UniversumGlobal
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
I N T E G R A T I N G N E W T E C H N O L O G Y
Co-bots
Robots and automated machines will work along side production workers in goods manufacturing environments and store operations
Walmart plan to deploy robotic janitors and Giant Eagle will have robotic assistants in their stores
In 2018 alone, the co-bot market grew by more than 60%, nearing $500M in global sales
Operational Data
Collecting and analyzing data to conduct sophisticated analytics
Tap into artificial intelligence (AI) to evolve product design better manage supply-chains and optimize shopping experience
Data Scientist and AI Engineers will lead as highest in demand skillsets
Robotic Process Automation
Speeding up and improving accuracy of invoicing and accounting tasks
Back office reporting and data collection for historical analysis and future planning
54% of the work done in the Consumer Packaged Goods industry has the potential to be automated
The Retail Automation market will increase from $8.79 billion in 2017 to $14 billion by 2022
43% of CPG executives automate tasks primarily to cut costs and increase efficiency
Sources: Uipath, PeriscopeSolutions, Accenture
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Consumer Products and Retail
J O B S
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
479,667 jobs open in EMEA
Belgium 23,172France 115,219Germany 113,828Netherlands 16,141Russia 183,951Sweden 12,686UK 111,350South Africa 14,670
3,107,560 jobs open in APAC
Australia 55,986Philippines 17,221China 2,752,802India 100,762Japan 163,431Singapore 17,358
1,955,689 jobs open in Americas
North AmericaUS 1,780,486Mexico 48,694Canada 116,636
South AmericaArgentina 4,252Brazil 9,873Colombia 13,309
This map shows the number of positionscurrently open on TalentNeuron in Consumer Products & Retail in each country. Categories include:
• Sporting Goods• Tobacco• Supermarkets• Food Production• Consumer Electronics• Consumer Goods• Furniture• Retail• Food & Beverages• Consumer Services• Wholesale• Wine and Spirits• Luxury Goods & Jewelry
Source: TalentNeuron
E M P L O Y E R H I R I N GCurrent open jobs by country
O P E N J O B V O L U M E B Y S K I L L S E T S I N T H E U S
Popular positions requested by Pontoon clients
General LaborLos AngelesNashvilleSt LouisLouisville
MerchandiserSan AntonioNew OrleansChampaign- Urbana, ILLubbock, TX
Material HandlerNashvilleSan AntonioLancaster, PADayton
Route Sales RepDallasCincinnatiIndianapolisLos Angeles
Warehouse WorkerLos AngelesMiamiSan AntonioToledo
Source: TalentNeuron
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
F U T U R E O F J O B S
Emerging OccupationsAdvances in innovation will require a re-skilled workforce responsible for harnessing the capabilities of that new technologies will bring to the Consumer Products & Retail sector
o Data Analysts and Scientists
o Sales and Marketing Professionals
o AI and Machine Learning Specialists
o Training and Development Specialists
o General and Operations Managers
o Ecommerce and Social Media Specialists
o Organizational Development Specialists
o New Technology Specialists
o Information Technology Services
o User Experience and Human-Machine Interaction Designer
Diminishing OccupationsRobotic Process Automation has replaced many of the functions traditionally completed within these roles. Reduced by 34% in 2018 and projection in 2022 show these roles down by 24%
o Data Entry Clerks
o Accounting, Bookkeeping and Payroll Clerks
o Assembly and Factory Workers
o Administrative and Executive Secretaries
o Material-Recording and Stock-Keeping Clerks
o Cashiers and Ticket Clerks
o Postal Service Clerks
o Garment and Related Trades Workers
o Business Services and Administration Managers
o Social Media StrategistM A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
S H I F T I N G J O B T A S K S
Augmentation of key job tasks in Retail and Consumer Goods in 2018 and 2022
Shift in tasks that have been done traditionally by humans will be completed by machines in the coming years
2018 2022
70%
76%
71%
30%
24%
29%
P e r f o r m i n g p h y s i c a l a n d m a n u a l w o r k a c t i v i t i e s
C o o r d n a t i n g , d e v e l o p i n g , m a n a g i n g a n d a d v i s i n g
C o m m u n i c a t i n g a n d i n t e r a c t i n g
50%
60%
60%
50%
40%
40%
Human MachineMachine Human
Source: World Economic Forum
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail June 2019
TA L E N T L A N D S C A P E
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
46,624,000 professionals in Americas
North AmericaUnited States 30,297,000Canada 4,018,000Mexico 5,046,000
South AmericaArgentina 1,408,000Brazil 5,855,000
26,882,000 professionals in EMEA
Belgium 777,000France 5,511,000Germany 3,983,000Netherlands1,010,000Sweden 844,000Russia 8,225,000UK 4,376,000South Africa 2,156,000
342,325,395 professionals in APAC
Australia 2,125,000Philippines 315,395China 275,510,000Japan 7,606,000India 56,456,000Singapore 313,000
W O R K F O R C E S U P P L Y C H A I N
Talent by regionThis map shows the current workforce on TalentNeuron inConsumer Products & Retail ineach country. Categories include:• Sporting Goods• Tobacco• Supermarkets• Food Production• Consumer Electronics• Consumer Goods• Furniture• Retail• Food & Beverages• Consumer Services• Wholesale• Wine and Spirits• Luxury Goods & Jewelry
Source: TalentNeuron
A V A I L A B I L I T Y O F T A L E N T B A S E D O N S K I L L S E T I N T H E U S
Highest supply of workers based on highest demanded skillsets by Pontoon clients in Consumer Products & Retail
General LaborLos AngelesNashvilleSt. Louis Louisville
MerchandiserNew OrleansSan AntonioRockford, ILLynchburg, VALubbock, TX
Material HandlerNashvilleSan AntonioMiamiLancaster, PA
Route Sales RepDallasLos AngelesCincinnatiIndianapolis Las Vegas
Warehouse WorkerLos AngelesMiamiSan AntonioVirginia Beach/NorfolkLas Vegas
Source: TalentNeuron
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
T A L E N T T R E N D S
Custom and Creative Benefit Packages
In addition to competitive pay and traditional benefits CPG workers expect extra fringe benefits to when joining a new company
From a survey of 500 CG workers by Force Brands, these are the Top 5 most sought after benefits in 2020:1. Off-site social opportunities, like weekly cocktail parties (18%)2. In-office stress relief or fun (17%)3. Flex-time or telecommuting opportunities (17%)4. Tuition or continuing education reimbursement (16%)5. Paid sabbaticals for personal, volunteer, or professional
development reasons (16%)
Training and Development Opportunities
CPG workers are well aware of the digital evolution happening in the in industry. To continue to be valued, workers want to learn new skills and evolve their career paths in line with company initiatives
62 percent of workers say it’s important to develop their skills to be able to work with intelligent machines in the next three to five years
62%
Source: RecruitingDailyAdvisor
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
R I S K S & C H A L L E N G E S
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
P R E P A R I N G F O R M A J O R D I S T R U P T I O N
Intensifying Competition
Traditional retail and consumer goods companies now also compete for
talent against direct-to consumer companies, attractive start-ups, and
tech giants
“Acqui-hiring,” is the latest trend with large retailers
such as Target and Walmart. These companies acquire
start-ups mainly to attain their talent
New Technologies
Implementing and training employees on AI and automation will
keep workers engaged and minimize their departure to other firms
that are willing to reskill
Recent predictions estimate 25 to 31% of the 3.3
million business services jobs are at high risk of
automation in the next 10 to 20 years
“Continuing pressure on margins, competitors disrupting the market and the challenges of attracting new generations of workers mean business services need to improve productivity and efficiency to be profitable in future
Deloitte, The Connected Worker
Source: Deloitte, McKinsey
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
T R A D E T A R I F F S & P O L I C Y C H A N G E S
Consumer Products companies must prepare for risk scenarios where tariffs could severely impact their export and import business
US – Approximately 41 million American jobs are dependent on trade
Nearly one third of acres of farms in America is planted for exports. More than half of crops like wheat and almonds are sold outside of the US
Steve Madden: The shoe and handbag maker is preparing for the tariff to rise to 25% in January from 10%, creating an added $30 million headwind. Currently it sources only 16% of the affected goods from outside China; it’s now targeting to raise that to 40% or 50% next year, with Cambodia a big beneficiary
MillerCoors: Brewer says profit could fall by $40 million depending on how much aluminum prices rise
Procter & Gamble: Cites ‘meaningful’ impact of tariffs on a handful of products in Canada, which accounts for 3% of global sale
Coca-Cola: Raised prices for soda and other beverages to offset higher costs for freight shipments and metals used in its bottling systems
In a survey of 1,100 global companies – across all industries –found that boards spend less than 10% of their time on risk management
Taiwan – Giant Manufacturing: A 10 percent tariff would cost the industry an additional $100 million, and that figure would rise to $250 million if the duty rises to 25 percent, the company told the U.S. Trade Representative in a letter
China – Samsonite: Wholesale buyers notified in a letter than a 10 percent price increase is imminent if the U.S. follows through with tariffs on Chinese goods on Sept. 24
Source: Bloomberg Tariff Tracker
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
H E L P I N G O U R C L I E N T S S O LV E H I R I N G O B S TA C L E S
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
How to Close the Skills Gap
S K I L L S G A P
Growing the skills of the existing workforce
35%of the skills demanded for jobs across industries will change by 2020
World Economic Forum
Offer external training courses
to employees through General
Assembly
Inter-department shadowing
of colleaguesto develop
farther reaching skills
Learning and development
courses to develop skills of
existing workforce
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
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T A L E N T S H O R T A G E
Managing the workload with fewer traditional workers
58%of companies said they use gig workers to access skills and experience that is not
available in their current workforce
Forbes
How to win the war for talent
Access to large pools of
freelancers candidates for
project based work
Re-skill existing
workforce with General
Assembly courses
Partner with Lee Hecht Harrison to
restructure the current workforce to
best utilize the employees
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
321
C O M P E T I N G F O R T A L E N T
Attracting talent in a limited market
Prospective candidates want to join companies that offer opportunities for growth and outlets for creativity
Organizations must set themselves apart from the pack to attract top tier talent
Fosters innovation
among your
workforce
Provides learning opportunities
for skills development with
General Assembly
Offers competitive
pay, benefits,
bonuses, incentives
Offers flexible
work
arrangements
Win talent with a strong employer brandPromote a workplace that:
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Consumer Products and Retail
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Ways to prepare for the Gig Economy
In the United Kingdom, France and the Netherlands, freelance growth has outpaced overall employment growth.
“Legacy models of employment will be “dissolved and replaced with talent marketplaces driven by the surge of on-demand labor platforms and online work management solutions.”
Accenture
Freelancers will make up 50% of the workforce by 2025
Evaluate what part of the business can be outsourced to freelancer– project work, seasonal influxes
Tap into the freelancer talent pool by implementing an FMStool
W O R K F O R C E 2 . 0 F R E E L A N C E R S
New composition of the workforce
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Consumer Products and Retail
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A D D R E S S I N G T R E N D S & C H A L L E N G E S W I T H
P O N TO O N ' S E C O S Y S T E M
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail
G E N E R A L A S S E M B L Y
Building the talent pool by up-skilling and re-skilling
Pontoon’s partnership with General Assembly faces this issue head on. GA aims to identify skills that are most in demand then provide training to increase the number of skilled workers in a given market
Today’s talent shortage is being felt across the global and across all industries. Consumer Products & Retail is seeing the effects of advances in technology in many skillsets and not enough talent to keep up withthe changes landscape of this field.
Employees can enroll in programs while working in their current role with plans to transition into the new roles or expand responsibilities once the GA programs have been completed
We must focus on developing the skills within the current workforce as the world of work rapidly transforms
L E E H E C H T H A R R I S O N
Transforming the workforce
Lee Hecht Harrison has the expertise to guide organizations through strategic workforce transformation. With AI driven services including internal talent redeploy, outplacement and change management program, LHH will guide companies to be most effective in the current tight labor market
LHH has the capability to identify talentedcandidates through their powerful AI platformreaching of all levels and industries. Retaining and engaging talent is done through career development and coaching of both employees and leadership
Employers can leverage Lee Hecht Harrison’s industryinsight to optimize their workforce developing leaders be a consultative partner best suit business needs
“The alignment between organizational talent needs and an individual's career goals can be a potent force that not only prepares your organization to meet the challenge of business transformation, but also boosts engagement, retention and productivity.”
Melanie Stave SVP, Talent Development Practice Leader, LHH
T H A N K Y O U
+1 855.881.1533
www.pontoonsolutions.com
@pontoon2019
M A R K E T S E G M E N T R E P O R T
Consumer Products and Retail