THE CONTINUING IMPACT OF DIGITAL ON SHOPPERS AND STORES

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PANEL INTRODUCTION

Jodi KahnChief Consumer Officer

FreshDirect

Deepika PandeyGroup VP, Digital Marketing

Walgreens

Mike BrennanChief Operating Officer

Peapod

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THE SHOPPER DRIVEN RETAIL FUTURE

Always On, Seamless, Personalized

Dynamic, Transparent, Endless

Any Category, All Devices, Borderless

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4

1214

1620

25

32

CPG ONLINE MARKET

Source: Nielsen

US Online CPG Sales($ Billions)

Online Penetration% of shoppers who claimed to purchase a CPG product online in past 3 months

2012 2013

6.5%

9.2%

2010 2011 2012 2013 2014 2015

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FRAGMENTING BEHAVIOR…CONTRADICTING FACTS

CPG shoppers do not engage digitally

Of total retail sales digitally influenced or sold by 2017

“I frequently shop for and purchase pet supplies, vitamins, cleaning products and frozen foods on line for the variety”

68%

Feel the grocery store is more convenient

74%60%

FROM THE CONSUMER

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9%

15%

12%

14%14%

13%

22%

Low value seeking, low shopping enjoyment

Research driven, tech savvy

Low trust, low tech savvy

Enjoy shopping

PATH FORWARD IS FOCUSED ON SHOPPER TYPES…Of the 32% of digital shoppers, 7 shopper segments

Source: Nielsen Digital Shopping Information Survey; Updated Jan 2014

Digital Reluctants

Tech Averse

Digital Advocates

Non Planners

Tech Savvy

Grab & Go

Researchers

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PERSONALIZE SHOPPER COMMUNICATIONS…

Source: Nielsen 2014 Print to Digital Survey

Opportunity to reach shoppers through many touchpoints

Source: Nielsen 2014 Print to Digital Survey

Communication Vehicle# of touchpoints used by shoppers: % by shopper segment

■0–3■4–7■8–11

Communication Enabler% of shoppers who own device

Easier to reach younger shoppers through Smartphone/Tablet

Smartphone Tablet

80%

71%

52%

30% 61%

51% 39%

26%

■Millennials■Generation X■Boomers■Greatest Generation

Tech Averse Digital Advocates

14% 9%

57%47%

29%43%

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13%

0%

0%

56%

56%

69%

69%

56%

44%

94%

94%

INVESTING FURTHER IN DIGITAL TOUCH-POINTS

Source: 2014 Retailer & Manufacturer partner survey; Q6 – In 5 years, do you envision spending more, the same, or less than you do today on each of the following marketing vehicles?

Apps for phones/tablets

Social media sites

Emails to shoppers

Text messages to shoppers

Store website

Money-saving apps

Money-saving websites/blogs

In-store kiosks

Mailed circular

Newspaper circular

In-store circular

93%

90%

86%

86%

79%

74%

57%

48%

14%

7%

2%

Retailers Manufacturers

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RETAILERS WIN WITH MORE DIGITALLY ENGAGED SHOPPERS

0 1 2 3 (+) 4 (+) 5 (+) 6 (+)

Aver

age

Equi

ty S

core

Number of Retailer Touchpoints

0 1 2 3 (+) 4 (+) 5 (+) 6 (+)

Shar

e of

Wal

let I

ndex

Number of Retailer Touchpoints

Source: 2014 Print to Digital Survey; Sources = Emails to shoppers, Store website, Apps for smartphones/tablets, Social media sites, Money-saving websites/blogs, Money-saving apps, Text messages to shoppers, In-store kiosks, Circulars – In-store, Circulars – Mailed, Circulars – Newspaper; Equity Score: a quantitative value that describes the level of affinity shoppers have for a retailer (taking into account a variety of factors including awareness, shopping behavior, and store preferences)

Mass

Mass

Grocer

Drug

Drug

Grocer

Online

Online

Share of Wallet Equity Score

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OPTIMIZE CHANNEL AND FORMAT

Source: Q2 2013 Digital Shopping Information Survey

Shopper Segments Shopper Needs Retailer ModelsManufacturer Collaboration

Small Format

E-Commerce

Home Delivery

Pricing

Form, Size, Content

Supply Chain

Non-Digital

Grab & Go

Non Planners

Tech Savvy

Researchers

Digital Advocates

Tech Averse

Digital Reluctants

Convenience

Price/Value

Service

Shopability

Assortment

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$7,003$5,850

THESE ARE VALUABLE SHOPPERS

Digital Advocates

Lowest household spend across all channels Highest household spend across all channels

Source: Digital Shopping Information Survey – Updated Jan 2014

Non Digital Yearly spend

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WHAT THIS MEANS FOR YOU…

Find Your Shopper Types

Personalize Communication

Optimize Channel & Format

c360.cnf.io

Choose Your Session From the List

Click / Tap on Each Poll to Respond

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POLLING QUESTIONSAre these Yes/No questions or can there be multiple choice?

Today e-commerce represents approximately 4% of FMCG sales. By 2020 do you think e-commerce’s percentage of FMCG sales will be:- 10%

- 15%

- 20%

- 25%

For your company how big of a priority is E-Commerce:– High priority: We have leader

dedicated to growing this area

– Medium priority: We want to meet shoppers needs who want to shop online, but don’t see this as a growth area.

– Low priority: While we are monitoring the growth of E-Commerce, we think it represents a low percentage of how customers want to shop

Currently, how much do you buy via e-commerce of your total purchases (includes digital goods):- Less than 10%- 10%–30%- 30%–50%- Over 50%

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YOUR OPPORTUNITY TO SHARE AND CONNECT!

What do you think shoppers want in a digital shopping experience, and what role does a physical store presence play.

What impacts do you see mobile having in shopper engagement, on advertising and path to purchase?

AUDIENCE Q&A WITH PANELIST

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IN CLOSING…

Let’s continue the dialogue

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