Professional Documents
Culture Documents
Operating Models
for the Future
of Consumption
3. Preface
4. Executive Summary
24. Conclusion
25. Appendices
29. Endnotes
REF 310517
Preface
In the context of this seismic change, the World Economic Forum System Initiative
on Shaping the Future of Consumption envisions a future where technology is firmly
Sarita Nayyar, embedded in people’s lives, making their daily experiences simpler, highly personal
Chief Operating Officer,
World Economic
and more enjoyable as well as imbued with trust and harmonious with nature.
Forum LLC It takes a holistic view by addressing the question, “How can technological
disruption drive enhanced models of consumption with sustainable benefits for
business and society?”
Despite these consumer and market opportunities, The workforce will transform to consist of internal employees,
evidence suggests that business transformation is freelancers and even consumers. Continuous learning will
not occurring at the pace and scale required. 41% of be the norm, with workers seeking ongoing enhancement
Consumer Industry companies in the S&P 500 have of “soft” skills and “hard” skills. With a focus on self-directed
either been acquired or gone out of business since project work, workers will take unprecedented accountability
2000. Moreover, half of current S&P 500 companies are for their own careers and personal development.
predicted to face the same fate within the next ten years.
For decades, the largest CPG and retail companies For consumer-centric industries, this Fourth Industrial
dominated by exploiting economies of scale across a Revolution has three driving forces:
linear value chain. Big-format shops offered wide ranges
of products at competitive prices and – as long as those 1. Disruptive Technologies
products delivered on expectations – consumer loyalty was
The impact of technology is exponentially greater because
assured.
individual innovations increasingly work together. These
“combinatorial technologies” have enabled new entrants
Owning and selling big, global brands no longer guarantees
to offer novel methods of consumer engagement that
survival. This trend is further challenging the long-standing
create, deliver and capture value. Barriers to entry have
symbiotic relationship between CPG and retail. Manufacturers
fallen as visibility and brand presence no longer depend
are selling directly to the consumer. Innovation has emerged
on expensive television advertising. Combinatorial
from unexpected sources, with small CPG companies
technologies are also transforming company operations.
generating more than half of industry growth in many
Last year’s Future of Retail insight report outlined the
categories. Extrapolated across the industry, analysis
impact of eight technologies on the value chain of
indicates that half of future value will come from new sources
consumer industries. In the past 12 months, this impact
of growth.1 Retailers and e-commerce players alike are
has shifted and deepened at a faster rate than previously
aggressively pursuing private labels. Five of the largest
anticipated. For example, consider how 3D printing
e-commerce players who dominate the global e-retail market
companies have truncated R&D, scale production
present the most compelling examples of value creation
and distribution. Historically, rapid prototyping was
through ecosystems.
the core use-case in 3D printing; today, technological
advancements have reframed these organizations as
Percentage of S&P 500 Consumer Industry
41% companies that have gone bankrupt, been
acquired or ceased to exist since 2000.2
active scale manufacturers (that is, those that can actively,
in an agile way, scale operations up or down to meet
demand). These changes have long-reaching impacts,
including the potential repatriation of manufacturing as
Percentage of today’s S&P 500 that are
50% expected to face the same fate within the
next ten years.3
companies bring production closer to end consumers.
(For more on these changes, see Appendix A.)
3. Empowered Consumers
Ever-connected consumers have higher expectations
than ever before as combinatorial technology and
new business models provide many ways for them to
discover, purchase and engage. Not only are consumers
dictating exactly what they want, but they are embedding
themselves at all stages of the value chain – acting as
developers, marketers, salespeople and even employees.
This is a fundamental change in the consumer value
equation, amplifying historic drivers – cost, choice and
convenience – and adding both control and end-to-end
experience.
6 Operating Models for the Future of Consumption
In many cases, a tailored experience outweighs cost the “cheapest”; this trend holds true for both high-touch
considerations. Analysis of Google search data6 shows products, such as make-up, as well as utilitarian products
that consumers are increasingly seeking the “best” versus such as paper towels.
100
Search for 75
“Best Make-up” 50
Search for 25
“Cheap Make-up”
Average 1 Feb 2007 1 Oct 2010 1Jun 2014
100
Search for 75
Search for 25
This means that companies are no longer just selling products To ensure continued success, firms will need to craft an
to consumers, but are instead anticipating and meeting operating model that recognizes these significant changes in
consumers’ needs as part of deeper, more enduring, and in profit pools —the sources and distribution of profit within the
many cases increasingly interactive, relationships. This implies industry— across consumer-centric industries, and design
a shift in focus from maximizing market share and revenue to both organizations and ecosystems to unlock opportunities.
creating material consumer value. Profit pools of the future will focus on the consumer.
Companies will need to seek revenue opportunities that
Consider, for example, that a food company may move from increase consumer value and balance cost savings with
simply selling food items to participating in a healthy-eating consumer outcomes.
ecosystem. This network might provide a range of offerings,
including healthy packaged foods, personalized nutrition
subscriptions, and physical and emotional coaching. In this
scenario, rather than maximizing individual profits, participants
will strive to maximize the value of the entire system, while
realizing sustainable value for each stakeholder – consumers,
partners and self.
Characteristics of Future Mindset outlines the substantial cultural change that needs
to occur in an organization’s vision, objectives and ways
Operating Models of working. Structure describes the integration within
ecosystems and the internal platform that facilitates liquid
Operating models of the future – tightly focused on talent and capabilities. Economic viability combines lasting
consumers – will be built on characteristics that define the and renewable business impact with the licence to operate
mindset, structure and economic viability of the company. through sustainable practices.
MINDSET
Human, Ecosystem,
Living, ECONOMIC Modular,
Enhanced VIABILITY Liquid
Cultural shift in Enduring Fundamental
approach and Responsibility to generate changes in shape
ways of working lasting performance and and execution
sustainable impact
STRUCTURE
Picnic is a Dutch online grocery organization that uses a Instacart serves a large network of physical locations, carrying
“milkman” model, where the same “runners” deliver to the out millions of shopping occurrences. This allows for rapid,
same homes at regular times. Customers trust and enjoy statistically significant experimentation in real-life situations.
seeing their favourite runners, who are selected for both their The San Francisco-based grocery delivery company runs
people skills and their problem-solving abilities. Importantly, hundreds of experiments at any point in time, ranging from
and unusually, individual runners are able to determine the two to four weeks in length. Chief Business Officer Nilam
best way to solve customer service issues. If a product is Ganenthiran describes Instacart’s “culture of experimentation”
missing, the runner can decide to purchase it in a local outlet as one where individuals must be comfortable with fast failure
or deliver it at another time. The company also shares its as only 10–20% of experiments succeed.
data with runners so that runners can proactively address
situations. Most people who started shopping at Picnic
two years ago are loyal customers, making an average of
40 purchases per year. With very low customer acquisition Case Study: Graze – Unleashing Agility
costs – 75% of customers join Picnic via word-of-mouth –
and the efficiency of the last mile (that is, delivering locally, all London-based Graze is a natural-food company that delivers
the way to the consumer’s doorstep), every customer adds directly to the consumer, sells to retailers in the UK and US,
considerably to the contribution margin of the operation. and has a subscription model business with personalized,
monthly snack boxes. Explicit objectives, well-defined
Human organizations will, thus, be characterized by a guardrail metrics (which help to guard against potential
fundamental change in how leaders lead. Critical leadership negative outcomes by covering additional dimensions on
skills will include the ability to focus on mobilizing the right which the primary objective is not necessary focused) and
resources, regardless of tenure, and an understanding of independent initiatives enable unusual agility through a series
how best to act on the opportunities that will truly make a of sprints. Just seven weeks after entering Sainsbury’s, Graze
difference. This is a shift that P&G Europe President Gary created an alternate full line of products with simultaneous
Coombe calls “servant leadership”. To support this objective, packaging development, manufacturing and marketing. Once
P&G leaders employ “upward” mentorship by looking to junior in market, teams took a test-and-learn approach, making
members for insight into areas such as technology and social immediate adjustments based on signals within days of
media. products being placed on shelf.
–– Top-down mandate, with leadership themselves actively Operating models of the future will be transformed
using data, driving its improvement and extending data as structurally, bringing ecosystems to the core of companies’
DNA to every member and structural component of the strategies. Extending far beyond the existing supplier/
organization customer value chain relationships, an ecosystem is the
–– Exponential insights aided by data science and a real-time network of cross-industry players who work together to
data system across every function and role within the company define, build and execute market-creating customer and
consumer solutions. An ecosystem is defined by the depth
–– Centrally facilitated and seamless flow of data across and breadth of potential collaboration among a set of
business models, functions and project teams players: each can deliver a piece of the consumer solution, or
contribute a necessary capability.
10 Operating Models for the Future of Consumption
Figure 3: Components of the Data-Driven Organization
Basic
Representative Representative
Disruptor Incumbent
* For example, the corporate centre takes in data from across business models and facilitates the continuous flow of data between them – thus, what
one business model learns about a consumer is immediately known to and affects the activities of other business models touching that consumer.
The power of the ecosystem lies in the fact that no single Case Study: Alibaba – Ecosystems Expanding Market
player need own or operate all components of the solution, and Industry Reach
and the value the ecosystem generates is larger than
the combined value each of the players could contribute Alibaba, the Chinese internet giant, manages a complex web
individually. Company strategies will assess which capabilities of business models, capabilities and other investments. This
and assets are truly “core” and vital to control – either ecosystem allows them to access capabilities from best-in-
because they are vital to the business value proposition class providers, expand new businesses quickly and extend
or because there are winning economies of scale/scope. into adjacent industries:12
Ecosystems accelerate the development of new markets as
–– E-commerce Platforms: Alibaba manages many business-
potential solutions and capabilities can be quickly exploited
to-consumer and business-to-business marketplaces
as an idea is born. This requires executive management and
(e.g. Taobao, Tmall and Alibaba.com), online-to-offline
strategists to collaborate to acquire these capabilities and
businesses (e.g. Koubei) and investments in other
have an agile, innovative mindset.
marketplaces (e.g. Lazada)
Companies will need to create ways to engage with start- –– Capabilities: In support of its diverse businesses,
up and accelerator communities by hosting competitions, Alibaba has built and invested in alternative payments
setting up collaborative working spaces and creating large (e.g. Ant Financial, Paytm), logistics (e.g. Cai Niao, Didi,
open-sourced innovation networks, often involving up to a Lyft), marketing analysis (e.g. Alimama) and supporting
thousand different companies. Today, internet players have technology (e.g. Alibaba Cloud)
some of the most sophisticated models, a complex web of
–– Extra-Industry Ventures: The company is building its
capabilities and relationships representing what ecosystems
consumer health offerings through AliHealth.
will look like in the coming years.
Data Core Commerce Mobile Media & Entertainment Local Services Data
Driven
Refuel
Logistics
Cloud Computing
Case Study: Royal Philips – Creating an Ecosystem to Currently, companies’ reluctance to share data for fear
Deliver Consumer Solutions of losing competitive advantage is often a key inhibitor to
ecosystem engagement. This attitude severely constrains the
As digitalization reshapes healthcare, Philips is adapting value that players can gain from a more open approach. Best
from a transactional, product-focused technology company practices for open data sharing include:
to a solutions provider with customer needs at its centre.
–– Define data-sharing agreements that recognize
Established in 2013 and now 20 people strong, Philips
comparative advantage, and optimize total ecosystem
HealthWorks runs 90-day programmes that have worked
value, while protecting individual interests
with over 50 start-ups this past year to help build, test, de-risk
and expand new businesses in health technology. For each –– Outline data governance for appropriate use, including
cohort, Philips looks externally to select seven companies out compliance with local regulations
of around 400 to provide mentoring, access to the expertise
–– Build integrated technology platforms that support data
in the Philips network, and connections to help grow these
interoperability, as well as protect data security.
small businesses. Each cohort is selected based on a singular
theme (e.g. cardiology or neonatal care) and matched to be
non-competitive, allowing them to work easily together on Ecosystems or Platforms?
solutions. Companies are chosen without commitment to
future ownership. Platforms are one type of ecosystem. While every company
will be part of an ecosystem, some may have only peripheral
To extend the ecosystem, Philips started the HealthTech involvement in platforms. Research has identified three types
Ventures investment organization in 2017 to formalize of platforms:
partnerships with select companies in the HealthWorks
1. Marketplace Platforms hosting buyers and sellers
programmes and other early-stage companies. From seed
funding, indirect investing in fund-to-funds, and minority 2. Internal Company Platforms that support multiple business
stakes in select companies, Philips exchanges capital and models
expertise for access to products and exposure to companies 3. Business-to-Business Platforms on which ecosystem
in the direct fund that are agile, flexible and have specific skill partners trade capabilities (e.g. borrowing or monetizing
sets not currently found in the larger Philips organization. another’s existing capabilities and assets, such as
The four-person team starts by assessing 2,000 companies, manufacturing or regulatory management)
then vetting 300 of those to identify 12–15 companies While conventional definitions focus on the first type of
in which to invest. By investing in innovation, creating an platform, all three will play significant roles in the future. What
ecosystem within the healthcare space, and learning from differentiates platforms from the types of exchanges seen in
small companies, this global health-technology player is the past is that platforms are enabled by technology and data,
strengthening its impact in the hospital and the home. and based on network effects that enhance the value of the
platform as the number of participants increases.
Company Affiliates
External workers who have
strong associations and
existing understanding Company Affiliates
and relationships (e.g.
organization’s alumni with
known capabilities and
relationships) Partners
Publicly Available
Consumers
Talent Crowdsourced talent to solve
Partners problems, get ideas, gather
information/data, complete
Talent provided by outsourcing/
“on-the-ground” tasks
managed service providers Consumers
Economic Viability: The Responsibility to As companies move from single to multiple business models,
Generate Lasting Performance and Sustainable go-to-market functions will need to change accordingly – from
Impact standardized central functions to flexible functional support
organized around, and simultaneously managing, each
business model’s distinct objectives, activities and metrics.
Enduring
Functions will become porous, with a rapidly expanding
Operating models of the future will be defined by their ability to ecosystem changing players’ roles, responsibilities and
subsist in a disrupted world. Enduring organizations will establish activities, and with companies borrowing or lending entire
the necessary mindsets (human, living, enhanced) and structures capabilities to other partners. “Co-boting”, the collaboration
(ecosystem, modular, liquid) to ensure that the company has between people and machines, will be commonplace in the
long-term economic viability. Companies will drive financial automation of simple tasks and more so as artificial intelligence
value through sustainable practices and by enabling trust and amplifies truly human capabilities. Technology will help create
transparency, as well as by reflecting stakeholder values. the functions of the future by integrating and redesigning
activities to drive efficiency and create greater consumer value.
14 Operating Models for the Future of Consumption
Case Study: Carbon – Technology Blurs Functional Lines As traditional “back-office” functions change focus by linking
into the extended ecosystem, they will achieve scale and
Carbon, the San Francisco-based 3D technology flexibility with partnerships providing on-demand capabilities.
manufacturer, enables design-to-manufacturing at The nature of these functions will need to shift from
astonishing speed. With ongoing prototyping and iterative, supporting services to actively driving business outcomes.
parallel processes, Carbon reduces design, prototyping and HR will manage both a liquid workforce and fluid processes.
manufacturing processes that usually take 8–12 months to Finance will evolve from a compiler of historic financials to
a matter of days. The company sees opportunities to merge a true strategic partner by exploiting predictive analytics.
manufacturing and distribution and is in discussions with Procurement will enable liquid capabilities, working with both
shipping carriers to house 3D printers in their distribution project teams and central functional areas to identify, secure
centres, which would enable carriers to receive orders, print and integrate external capabilities.
products and ship directly.
Intent
provides direction on what the company is trying to achieve,
and what will enable it to be successful in its chosen strategy and business model
What’s Changed?
Purposeful exploration of ecosystems to unlock the power of intra- and
cross-industry external networks across new business models, capabilities and data
Functional groups, managing dependent but Functions merge to deliver outcomes, enabled
separate activities by combinatorial technology
Process
Tradition and excellence; valuing experience and “Disrupt thyself” and learn by doing; risk tolerant;
historical knowledge; focus on preserving and prizes individual intrapreneurship; student
building on legacy; value of leaders is determined leadership; value of leaders is determined by
Culture by size of team and book of business managed impact to the business
New Jobs Within Future Operating Models Soft Skills Hard Skills
76%
Digital-Native Marketers
at younger companies born in the
digital age (e.g. Email Marketing
Manager at VC-backed start-up)
44%
Corporate Marketers
at long-standing corporations
that are transforming in the digital
age (e.g. Brand Manager at CPG)
38%
Non-Marketers
work in functions outside
Marketing (e.g. Sales, IT, HR,
Legal, Creative)
In addition to sourcing talent across several internal and Figure 10: Cost Reduction of Radical Reskilling vs
external workforces, companies need to consider reskilling Traditional Hiring for Software Engineers over Three
rather than expensive recruitment of in-demand talent. Years
General Assembly found that “radical reskilling” is 63% more
cost-effective than recruiting external software engineers.28
Massive Open Online Courses (MOOCs) and virtual learning >$20,000
are tools that scale and flex quickly to enable radical reskilling
and meet changing market conditions.
$5,000 –
It is neither through ‘cheap labour’ nor through attracting $10,000
a narrow set of the ‘best and the brightest’ and winning
a ‘war for talent’ that countries can optimize their long-
term human capital potential, but through building
up deep, diverse and resilient talent pools and skills
ecosystems in their economies that allow for inclusive
participation in good-quality, skilled jobs by the largest
possible number of people. Traditional Radical
Hiring Reskilling
Figure 11: Estimated Impact of Automation on CPG and Retail Industries Workforce in the United States
Share of jobs
Time Time
2015 2020 2025 2030 2035 2015
2040 2020
2045 2025
2050 2030 2035
us
l
ta
to 2015, while share of workers in high-skill jobs increased
io
gi
n
Di
and in low-skill jobs remained relatively stable. As the middle-
|D
n|
skill jobs lost are replaced – 80% by high-skilled work and
igit
Digital Inclusio
20% by low-skilled work36 -- the potential for occupational
a
Future of
l Inclusion
polarization risks becoming a reality as technological changes
yield primarily high-skill jobs.
Learning
People [with] low and middle incomes have seen their
Radical Continual
wages stagnate and the share of middle-skilled jobs Reskilling Evolution
has fallen, contributing to rising inequality and concerns
that top earners are getting a disproportionate share of
the gains from economic growth. n Di
sio git
l u al I
Inc nclu
n | Digital sio
– OECD Employment Outlook 2017
As new jobs form across the industry, stakeholders will Case Study: SkillsFuture Singapore – Offering Incentives
need to support this growth in an inclusive way. CPG to Participate in Reskilling Programmes
manufacturers and Retailers must invest in reskilling their
workforces through targeted learning and skill development to Through the national Work Trial skill-building programme,
ensure that all employees can succeed in the digital age. Singaporean employers offer short-term trials in which
jobseekers can work between 16 hours and 3 months, with
Continuous Learning 30% of wages subsidized by the government. Participants
learn skills “on the job” while employers test candidates
The ever-increasing pace of technology will require all workers for fit and capability. The Ministry of Education has also
to commit to ongoing learning. Today, the process and set up SkillsFuture Singapore to strengthen the country’s
culture of learning is sequential – from primary and secondary adult training infrastructure and provide access to quality
education, through vocational training and higher education programming and educational institutions. Some 126,000
to job-specific training. The underlying assumption is that Singaporeans – 2% of the population – enrolled in the
the resulting formal education will serve individuals for their programme’s first year in 2016.37
entire career. This is no longer the case. Digital inclusion,
developing an overarching digital and technology literacy to According to the World Economic Forum’s Future of Jobs
support market changes, provides access to digital technology report, 30% of consumer industry core skills will change by
for all workers at all stages – not just the few. It must be 2020, accelerated by new business models and technology.
accomplished. Workers are not ready. Almost one in three individuals
is concerned they will not be able to develop the skills
The future of learning involves a continuous cycle in which necessary to succeed in the field they wish to pursue in
digital inclusion is achieved through: ten years.38 The objective of learning needs to shift from
formal certification to ongoing skill development. Educational
–– Skill Building: Preparing individuals for the workforce with providers also need to shift their approach from helping
new skill training, practical courses that combine academic students earn a static diploma to enabling workers to
and real-world experience, and active job placement continually evolve their capabilities both within their current
roles and as they transition to new ones.
Skillful connects people to middle-skill jobs by supporting Andela is a technical talent company that trains software
employers to shift from certification-dependent to skills-based developers from the African continent and places them as full-
hiring practices. The organization provides access to local time distributed team members with Fortune 500 companies
talent pools, encourages the teaching of in-demand skills ranging from Viacom and Mastercard to dozens of high-
and prepares workers for new jobs with the help of their growth disruptors such as GitHub and Gusto. Currently
career coaches. Skillful has defined and piloted, and is now working with 500 developers, Andela has invested in an
promoting, tools and practices to accelerate the shift to a advanced training infrastructure and offers support services to
skills-based labour market, working across the network of help its developers achieve success in their careers.
employers, educators, government and non-profit support
organizations. Launched in 2016 by the State of Colorado,
Microsoft, LinkedIn and local partners, 375 businesses have
engaged with Skillful’s network, and 20 companies are now Case Study: Chattanooga – Providing Universal Access
working to fully embrace skills-based hiring practices. As of to Stimulate New Growth
June 2017, more than 60,000 people have engaged with
Skillful, and more than 1,400 people have actively engaged The City of Chattanooga built a government-owned,
with Skillful’s career coaches. fibre-optic cable network to provide a high-speed internet
service, while simultaneously increasing electricity reliability
Workers do not only need to acquire job-specific skills, they in rural parts of the city. Based on an independent study
must also have the ability to navigate career changes through conducted by the University of Tennessee, the Electric Power
transitional education. These programmes help people Board (EPB) of Chattanooga’s network has directly created
better identify their skills, develop and use networks, and use 2,800–5,200 new jobs for the city and generated $1 billion in
support services effectively. More broadly, such efforts will economic benefit over the past five years.40
help unlock the potential of underused talent. Global human
capital is developed to 62% of its potential,39 which indicates Securing employment in the digital age will require
that the world is wasting or neglecting 38% of its talent. stakeholder groups to collaborate to support professionals
mastering new skills, embracing new ways of working and
Figure 13: Gap in Human Development40 building both intrapreneurial and entrepreneurial capabilities.
North America 26%
While public discourse has focused on minimum guaranteed Flexicurity is vital for workers and employers alike, enabling
wages, other benefits to consider include health insurance, agility and access to vastly expanded pools of talent.
unemployment insurance and pensions. In addition to Companies have their own part to play in helping employees
traditional benefits, stakeholders will need to consider navigate a non-linear career path. To do this, businesses
alternatives for filling skills gaps, with easily accessible training need to shift their focus towards radical reskilling – especially
and learning opportunities. A small number of governments when it comes to helping steer workers through periods of
have introduced individual learning accounts, which give digital disruption. Some business leaders have even raised
employees the financial assistance to invest in their own the idea of a “carbon tax” model whereby companies that are
continuous training, independent of employers.45 more effective at skilling workers would lower their required
contribution to state-administered unemployment benefits.
Flexicurity provides highly skilled workers with the portability
to meet professional needs, a safety net for those low-skilled
Case Study: The Portable Benefits for Independent workers most vulnerable to market disruption, and freedom
Workers Pilot Program Act (Proposed) for employers to use the best available talent.
Case Study: Portfolium – Enabling Digital Portfolios –– Communicating consumer data collection and usage
procedures in a simple, understandable way
As employers increasingly value competencies that extend
beyond the standard skills and experience reported on a –– Outlining consumer data ownership and acceptable
traditional curriculum vitae, Portfolium provides individuals sharing practices
with the opportunity to build their own digital portfolio, –– Agreeing on data monetization protocols
capturing and curating examples of their academic and
extracurricular work. Portfolium also serves as a social –– Understanding the necessary infrastructure and activities
network, linking potential workers with academic institutions required to support consumer data security.
and employers.48
STAKEHOLDERS
THEME CALL TO ACTION
Individual Academic Enabling
Industry Government
Workers Institutions Disruptors
Transform academic curricula
and culture from focus on
X X X X X
knowledge and four-year degree
to lifelong learning
Use data to drive right-skilling
that recurrently identifies and
X X
builds newly required skills;
measure the ROI of programmes
Advancing technology • Foundational use-cases: Self-driving commercial trucks; Last mile delivery;
Self-driving drones
continues to open
• Emerging use-cases: Self-driving personal automobiles; Self-driving public
Autonomous possibilities in transportation (buses, etc..)
distribution efficiency • Pioneering use-cases: Drone consumer intelligence; Dronevertising
Vehicles/Drones
New models for • Foundational use-cases: Trend and volume forecasting; Descriptive analytics;
‘Human+Machine’ Chatbots; After-sales service; Robotics Process Automation; Development
augmentation are Operations Automation
• Emerging use-cases: Predictive recommendations; Smart Search
Artificial emerging, extending Assistance; Intelligent S&OP planning; Stock allocation forecasting; AI-assisted
Intelligence/ from supply chain merchandising; Dynamic pricing
operations to customer- • Pioneering use-cases: Scenario-driven prescriptive analytics; Brain-simulation
Machine Learning
facing applications ideation; DNA workforce profiling
Robotic-enabled
manufacturing lowers • Foundational use-cases: Robotics-enabled prototyping; Robotic manufacturing;
operational costs, Robotic picking
• Emerging use-cases: Automated warehouse; Automated sales assistants;
enabling repatriation of Automated customer support
manufacturing to bring
Robotics • Pioneering use-cases: Co-bots; Cognitive robotics; Dark manufacturing;
production closer to the Robotic shopping carts
end-consumer
Consumer demand for • Foundational use-cases: Product source tracking; inventory replenishment;
trust and transparency Supply chain product traceability; Merchandise tracking; Product authenticity
continue to increase mapping; Product warranty
Digital Traceability
Application of AR/
VR growing to include • Foundational use-cases: Virtual planogramming; Product design;
training the workforce Virtual retail locations; AR/VR engagement
• Emerging use-cases: Virtual changing rooms; Immersive campaigns;
and facilitating Virtual training environments
Augmented Reality/ Human+Machine • Pioneering use-cases: Virtual market research, Virtual sourcing;
Virtual Reality collaboration in Virtual customer service; Virtual hiring
manufacturing
Methodology:
This insight report leveraged extensive quantitative and The World Economic Forum would like to acknowledge
qualitative primary research to arrive at key findings, and extend its sincere gratitude to, first and foremost, the
contributing to the perspective presented. From a project steering committee. We also wish to thank the
qualitative perspective, over 75 individuals across the broad community of contributors across partner companies,
globe, including industry leaders, disruptors, educators, technology start-ups, academicians and experts.
and policymakers, were interviewed to understand
their views on future operating models. Quantitative
research included the use of five global surveys -- four Project Steering Committee
executive surveys and one consumer survey -- and a
comprehensive econometric model to assess the impact –– Wouter Kolk, Chief Executive Officer of Albert Heijn, Ahold
of automation (See appendix B). Secondary research Delhaize, Netherlands
was also performed to gather additional data and analyse
–– Henk Mahieu, Head of International Relations and
perspectives written in other reports issued by academic
Economic Policy, Office of the Deputy Prime Minister of
institutions, governments, private businesses, and other
Belgium, Belgium
global organizations.
–– Brian Kean, Chief International Officer, CJSC Ulmart,
Russia
–– Jamie Murray Wells, Industry Head of Retail, Google,
United Kingdom
–– Blanca Juti, Chief Corporate Relations Officer, Heineken
NV, Netherlands
–– Mutlu Erturan, Chief Business Officer, Hepsiburada, Turkey
–– Carrie Ask, Global Head of Retail, Levi Strauss &
Company, United States
–– Joe Abi Akl, Head of Strategy and Business Development,
Majid Al Futtaim, United Arab Emirates
–– Mara Swan, Executive Vice-President of Global Strategy
and Talent, Manpower, United States
–– Chris Johnson, Executive Vice-President- Head of
Business Excellence, Nestle SA, Switzerland
–– Arun Sundararajan, Head of Social Cities Initiative, New
York University Stern School of Business, United States
–– Lars Olav Olaussen, Senior Vice-President of Global
Strategy and Talent, Orkla ASA, Norway
–– Gary Coombe, President of Europe, Procter & Gamble,
Switzerland
–– Stefan Pryor, Secretary of Commerce, State of Rhode
Island, United States
–– Philippe Gillet, Chief Innovation Officer, SICPA SA,
Switzerland
–– Vincent Ambrosino, Chief Operating Officer, Global
Business Development, Suntory Holdings Limited, Japan
–– Sean Flaherty, Senior Director of Global Retail Strategy,
UPS, United States
–– Jack Forestell, Global Head of Product, Visa, United
States
–– Lori Flees, Senior Vice-President of Corporate Strategy,
Walmart Stores Inc., United States
1. Accenture Analysis of Nielsen, 2017. 27. General Assembly, 2017 Digital Marketing Skills Report, 2017.
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