1. Driving Engagement thru Social Media & Loyalty Programs
Mary Brett Whitfield
Senior Vice President
Jahnia Sandford
Analyst
Apparel Retailing Webinar Series
May 2, 2013

2. Copyright Notice and Disclaimer
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The analyses and conclusions presented here represent the opinions of Kantar Retail LLC. The views expressed do not necessarily reflect the views of the management of the retailer(s) under discussion.
This content is not endorsed, or otherwise supported, by the management of any of the companies covered during the course of the presentation or within the following slides. 2

3. Today’s Presenters and Agenda
Loyalty Program Participation Drivers
Getting Social
Emerging Growth Trends Around the Landscape
Presenters Mary Brett Whitfield Senior Vice President Jahnia Sandford Analyst

4. Kantar Retail ShopperScape®
4,000 primary household shoppers per month
CORE SAMPLE: Representative sample of ~50, unique primary household U.S. shoppers annually
ALSO: Oversample of men for representative sample of males HOH (n = 800/month)
Who?
How?
Fielded online the third week of every month
Survey fielded through LSR access panel of more than 3 million individuals
What?
Monthly and quarterly tracking questions on retailers and venues shopped, products purchased, where spent, near-term spending outlook, and household financial health
Questions on timely and topical issues (including key holiday periods) affecting shopping behavior
Coverage
200+ retailers across all sectors of retail
75+ product categories (e.g., over-the-counter medications)
7 major merchandise groups (e.g., health and beauty care products) 4 4

5. Spring Spending Headwinds
More plan to spend more…but more also plan to spend less
Plans for Spending this Spring Compared with Last Year
Updating Wardrobe for Myself
Updating Wardrobe for Kids*
Home Improvement Projects
Gardening/Landscaping
*Among shoppers with children 18 or younger in the household
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

6. Agenda Loyalty Program Participation Drivers Getting Social
Which Shoppers Participate and Where
Shoppers’ Ideal Reward Program Benefits
Benefits Frequent Shoppers Currently Receive
Gap Analysis: How Retailer Programs Align with Shopper Wants
Getting Social
Emerging Growth Trends Around the Landscape

7. Loyalty Programs: Who Participates?
Majority do not
Membership in Any Frequent Shopper/Rewards Programs Offered by Clothing Specialty Retailers, Department Stores or Shoe Retailers
Female Primary Household Shoppers
Male Heads of Households
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

8. Shoppers Most Likely to Cite Department Stores as Most Frequently Used
Channel’s Share of Most Frequently Used Apparel-Related Loyalty Program
(among female primary household shoppers)
Most Frequently Used Apparel-Related Loyalty Program
(among female primary household shoppers)
Shoe Stores
Apparel Specialty Stores
Department Stores
*Read as 26% of all female primary household shoppers cite Kohl’s as the apparel-related loyalty program they use most often
Among female primary household shoppers
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

9. Boomers Even More Likely to Most Use Department Store Programs
Note: Arrows indicate significant difference vs. all shoppers (90% confidence level)
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

10. Seniors and Boomers Drive Department Store Program Participation
Most Frequently Used Apparel-Related Loyalty Program
(among female primary household shoppers)
Generation
All Shoppers
Gen Y
Gen X
Boomers
Seniors
Sample
1264
247
457
440
121
Department stores (net)
61%
52%
58%
66%
76%*
Kohl's
26%
22%
27%
25%
31%
Macy's
10%
12%
Other Department Stores 8% 9% 7%
11%
JCPenney 2% 5%
Sears
Nordstrom 1%
Belk 0%
Dillard's
Apparel specialty retailers (net)
30%
39%
32%
24%
18%
Victoria's Secret 6% 3%
Old Navy 4%
TJMaxx/Marshalls
Gap
Other Apparel Specialty Stores
17%
21%
16%
14%
Shoe retailers (net)
DSW
Other Shoe Stores
Boomers
Seniors
Gen Y
Gen X
As buying power shifts to younger gens department stores especially need to rework or fine tune loyalty offerings
Boomers-
Seniors- regional, store atmosphere
Gen Y-
Gen X- Participating at retailers with more family focus/ value
Gen Y (born 1982 to 2002)
Gen X (born 1965 to 1981)
Boomers (born 1946 to 1964)
Seniors (born before 1946)
Read as: 76% Senior female primary household shoppers cite a department store loyalty/rewards programs as the apparel-related rewards program they use most often
Shading indicates significantly greater percentage vs.all shoppers; border indicates significantly lower percentage (90% confidence level)
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

11. (among female primary household shoppers)
Give More Discounts, Free Shipping, and Rewards Coupons in Exchange for Loyalty
Potential Loyalty Program Benefits Shoppers Indicated as Ideal
(among female primary household shoppers)
*Read as 62% of all female primary household shoppers indicate getting discounts on all purchases as an ideal benefit of an apparel-related frequent shopper/rewards program
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

12. Increase Appeal among Men by Marketing Fewer Fees and Exclusive Events
Top 10 Most Appealing Loyalty Program Attributes:
Men vs. Women
Men
Women 1.
No annual fee
Discount on all purchases 2.
Free shipping for online purchases 3.
Reward certificates at specific spending/points levels 4.
Members-only coupon offers 5.
Exclusive sales events
 42%+
 55%+ 6.
Bonuses/discounts during your birthday month 7.
Free shipping on returns 8.
0% financing
Double/triple points days 9.
10.
Early access to sales events
 30%+
 40%+
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

13. 365 Discounting Less Important to Macy’s Participants, More to Belk and Other Specialty
May be less important to Macy’s customers due to the fact that Macy’s has frequent promotions very often to general customer base but additional incentives to cardholders, whereas belk and other spec such as Ann Taylor or Jcrew do not
*Read as 50% of shoppers who use Macy’s rewards program most often indicate getting discounts on all purchases as an ideal benefit of a rewards program
Note: Arrows indicate significant difference vs. all shoppers, 90% confidence level
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

14. Free Shipping Has Strongest Appeal among Old Navy and DSW Loyalty Program Shoppers
*Read as 69% of shoppers who use DSW’s rewards program most often indicate having free shipping on online purchases as an ideal benefit of a rewards program
Note: Arrows indicate significant difference vs. all shoppers, 90% confidence level
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

15. What’s Ideal Across Cohorts
No Annual Fee Likely to Resonate More with Boomers and Seniors than Younger Shoppers
What’s Ideal Across Cohorts
Where the largest and lowest percentage of shoppers noted a potential apparel retailing loyalty program benefits as ideal
(among female primary household shoppers)
Top Ideal
Least Important
Seniors
No annual fee
Discount on all purchases
Free shipping for online purchases
Allow family members credit line access
Personal stylist orconcierge service
Phone alerts about store events
Boomers
Reward certs when reached specific spending/points levels
Personal stylist or concierge service
Gen X
Members-only coupon offers
Gen Y
Bonuses/discounts during birthday month
Previews of new collections via
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

16. Other Key Areas Where Cohorts Differ
Largest Differences Between Gen Y and Senior Interests, Including In-store Events
Other Key Areas Where Cohorts Differ
Where the largest and lowest percentage of shoppers noted a potential apparel retailing loyalty program benefits as ideal
(among female primary household shoppers)
0% Financing
Birthday Bonuses & Discounts
No Annual Fee
Free Alterations
Free Shipping on Returns
Special In store Parties & Events
Highest Among
Gen X (29%*)
Gen Y (59%)
Seniors
(69%)
(31%)
Boomers
(55%)
Gen Y
(20%)
Lowest Among
(46%)
(48%)
Gen X
(18%)
Gen X &Y
(49%)
(10%)
*Read as 29% of Gen X shoppers indicated 0% financing as an ideal potential benefit from an apparel-related frequent shopper/rewards program
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

17. Members-only Coupons and Reward Certificates Popular Retailer Benefits
Actual Loyalty Program Benefits Received from Apparel-Related Program Used Most Often
(among female primary household shoppers)
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

18. Kohl’s Loyalty Program Members Most Likely to Receive Members-only Coupons
*Read as 49% of shoppers who use Kohl’s rewards program most often indicate having members-only coupons issued as an actual benefit they receive.
Note: Arrows indicate significant difference vs. all shoppers, 90% confidence level
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

19. Gap, Belk & DSW Program Shoppers Likely to Get Rewards Certs for Spending
*Read as 71% of shoppers who use DSWs rewards program most often indicate having certificates issued when reached spending or points levels as an actual benefit they receive.
Note: Arrows indicate significant difference vs. to all shoppers, 90% confidence level
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

20. Female primary household shoppers
Gap Analysis: Retailers Most Aligned with Shoppers on Members-only Coupons
Which of these potential benefits of an apparel-related rewards program would you consider to be part of an 'ideal' rewards program?
vs.
For the apparel-related rewards program you use most often, which of these benefits do you receive as a member of that program?
Female primary household shoppers
Ideal
Received 1
Discount on all purchases
62%
21% 2
Free shipping for online purchases
59%
16% 3
Reward certificates at specific spending/points levels
39% 4
No annual fee
57%
34% 5
Members-only coupon offers
40% 6
Bonuses/discounts during your birthday month
53% 7
Free shipping on returns
51%
11% 8
Double/triple points days
42%
13% 9
Exclusive sales events
41%
23% 10
Early access to sales events
19%
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

21. among shoppers who use Specialty Apparel Rewards program most often
Points Programs and Exclusive Sales where Specialty Wins with Loyalty Program Shoppers
Which of these potential benefits of an apparel-related rewards program would you consider to be part of an 'ideal' rewards program? vs. For the apparel-related rewards program you use most often, which of these benefits do you receive as a member of that program?
Ideal
Received
among shoppers who use Specialty Apparel Rewards program most often
Sample
373 1
Discount on all purchases
67%
18% 2
Free shipping for online purchases
63%
19% 3
No annual fee
61%
36% 4
Reward certificates when you reach specific spending/points levels
46% 5
Members-only coupon offers
60%
39% 6
Bonuses/discounts during your birthday month
56%
29% 7
Free shipping on returns
52%
12% 8
Double/triple points days
16% 9
Exclusive sales events
40%
24% 10
Early access to sales events
35%
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

22. among shoppers who use Shoe Store Rewards program most often
Shoe Stores Best Aligned with Shopper Interests on Reward Points and Double/Triple Point Days
Which of these potential benefits of an apparel-related rewards program would you consider to be part of an 'ideal' rewards program? vs. For the apparel-related rewards program you use most often, which of these benefits do you receive as a member of that program?
Ideal
Received
among shoppers who use Shoe Store Rewards program most often
Sample
115 1
Reward certificates when you reach specific spending/points levels
69%
50% 2
Discount on all purchases
68%
11% 3
Free shipping for online purchases
16% 4
Members-only coupon offers
64%
31% 5
Bonuses/discounts during your birthday month
58%
30% 6
Free shipping on returns
15% 7
No annual fee
53%
29% 8
Early access to sales events 9
Double/triple points days
43%
22% 10
Exclusive sales events
42%
21%
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

23. among shoppers who use Department Rewards program most often
Department Stores Matching Up on Double/ Triple Points Days and Free Shipping
Which of these potential benefits of an apparel-related rewards program would you consider to be part of an 'ideal' rewards program? vs. For the apparel-related rewards program you use most often, which of these benefits do you receive as a member of that program?
Ideal
Received
among shoppers who use Department Rewards program most often
Sample
776 1
Discount on all purchases
59%
24% 2
Previews of new collections via
56%
34% 3
Pick your own sales day 4
Reward certificates when you reach specific spending/points levels
55%
15% 5
Double/triple points days
54%
42% 6
Free shipping on returns
51%
16% 7
Special in-store parties and private events
50% 9% 8
Free shipping for online purchases
41%
22% 9
Receipt not required for returns
10% 10
Members-only coupon offers
40%
19%
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

24. among shoppers who use JCP's Rewards program most often
JCP Most Aligned with Shoppers on Points/Spending Plan to Earn Rewards Certs
Which of these potential benefits of an apparel-related rewards program would you consider to be part of an 'ideal' rewards program? vs. For the apparel-related rewards program you use most often, which of these benefits do you receive as a member of that program?
Ideal
Received
among shoppers who use JCP's Rewards program most often
Sample 90 1
No annual fee
56%
27% 2
Discount on all purchases
55% 9% 3
Reward certificates when you reach specific spending/points levels
51% 4
Members-only coupon offers
52% 5
Bonuses/discounts during your birthday month
14% 6
Free shipping for online purchases
12% 7
Free shipping on returns
42% 7% 8
Exclusive sales events
16% 9
Early access to sales events
40%
20% 10
Receipt not required for returns
37% 8%
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

25. Loyalty Programs: Issues and Implications
Leverage loyalty data in acquisition and retention efforts
Position insights gained from loyalty data with other integral selling efforts
Evolve approach to loyalty and what it means to/for growth

26. Agenda Loyalty Program Participation Drivers Getting Social
Who’s Connected and on Which Platforms
What’s Driving Shoppers to Connect
What’s Keeping Shoppers Connected
Emerging Growth Trends Around the Landscape

27. (among shoppers who connected with a retailer or brand in past year)
Majority of Shoppers Have Not Connected Socially with Apparel Retailers/Brands
The Socially Engaged
(among shoppers who connected with a retailer or brand in past year)
*Read as 27% of all shoppers indicated they have connected to an apparel retailer or brand thru Facebook in the past year
**Read as 11% of shoppers who connected with an apparel related Facebook, Pinterest, Instagram or Twitter in the past year, connected with Twitter
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

28. Deals and Promotions Biggest Drivers for Social Engagement
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

29. Boomers and Lower-Income Shoppers not as Concerned with Getting Deals
Generational Cohort
Income Market
*Read as 28% of Boomers engage socially to stay aware of future deals and promotions
Note: Arrows indicate significant difference vs. all shoppers, 90% confidence level
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

30. Curiosity Drives Lower-Income Shoppers
While contests attract Gen X and Middle-Income Shoppers
 What Prompted Shoppers to Connect with a Retailer or Brand via Social Media (among all shoppers)
Generation
Income Market
All Shoppers
Gen Y
Gen X
Boomers
Seniors
Down
Middle Up
Sample
1188
319
488
315 66
324
542
321
To stay aware of future deals and promotions
35%
39%
40%
28%
18%
24%
To get a specific deal that was being offered
30%
32%
31%
29%
22%
21%
Curiosity
23%
25%
27%
20%
Ability to participate in contests
14%
16%
Stay up to date on brand/retailer news and events
11%
19%
26%
No real reason
13% 9%
Get fashion advice/stay current on trends
12%
Express my taste/show others I like a retailer
15%
17%
Entertainment 7% 5%
10%
Connect with others who share my interests/fashion 8%
Access to customer service
Able to share/show recent purchases/styles/outfits 6% 0%
Other 1% 2% 3%
Shading/bolding indicates significantly greater percentage compared with all shoppers; outline/bolding indicates significantly lower percentage (90% confidence level)
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

31. Use Facebook to Market New Deals and Promotions and Twitter for Reminders
Note: Arrows indicate significant difference when compared to all shoppers, 90% confidence level
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

32. Instagram Garnering Most Interest out of Curiosity and for Trends and Style Advice
In the Past Year what Prompted Shoppers to Connect
with any Apparel Retailers or Brands, by Site
(among all shoppers)
All Shoppers
Twitter
Facebook
Pinterest
Instagram
Sample
1188
183
1102
277 96
To stay aware of future deals and promotions
35%
40%
36%
39%
29%
To get a specific deal that was being offered
30%
37%
31%
34%
Curiosity
23%
Ability to participate in contests
22%
32%
27%
Stay up to date on brand/retailer news and current events
No real reason
14%
13%
15% 7%
12%
Get fashion advice/stay current on trends
24%
25%
38%
To express my taste/show others I like a particular retailer
20%
19%
Entertainment
16%
Connect with others who share my interests/fashion
11%
Access to customer service 8%
10%
Ability to share/show off recent purchases/styles/outfits 9%
Other 1%
Shading/bolding indicate significantly greater percentage compared with all shoppers; outline/bolding indicate significantly lower percentage (90% confidence level)
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

33. Deals and Promotions Keep Shoppers Following, Pinning, and Posting … Especially Moms
Seniors 27%
*Read as 50% of shoppers stay connected with apparel retailers or brands because of access to deals and promotions
Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

34. Social Media Key Take Aways
Understand opportunities in social media are as unpredictable as they are predictable, robust nonetheless
Use social platforms more precisely, e.g., Facebook vs. Instagram, to add better value/ ROI
Support key marketing and merchandising efforts with social with a more tactical approach
Source: Kantar Retail analysis

35. Agenda Loyalty Program Participation Drivers Getting Social
Emerging Growth Trends Around the Landscape

36. Are You Accepting PayPal?
Amazon isn’t so why aren’t you?
JCPenney joins Walmart, eBay, and Nordstrom (in-store only) as one of the few large-scale apparel-related retailers that accept PayPal, in early April
Why is this important?
Macy’s, Gap, Kohl’s, Target and many other top apparel retailers do not accept at this time, key because:
Limits accessibility, in increasingly accessible world
Stifles ability to differentiate from Amazon in a very relevant way
Many smaller online-only retailers are accepting PayPal, broader competitive set
PayPal accepted in more than 20,000 retail outlets across U.S. with user base of 128 million
Sephora slated to accept in stores at EOY
Source: Kantar Retail Analysis and company reports

37. luluemon Boots Trusted Advisory Status
Launches “om finder” Yogi-centric mobile app
Source: Kantar Retail Analysis and company media

38. See & Share Your Brand in Motion
Using Vine to strengthen brand connection
Glamour: advertising trendy footwear & wearability from Clover Canyon Boutique
Uniqlo: promoting pop-up truck features, locations and experience
6 sec looping video to engage social followers
Urban Outfitters: leveraging as contest in support of partnership with Converse, tie to key lifestyle interests
Walgreens: promoting availability of healthy eating assortment
Source: Kantar Retail Analysis and company media

39. New Approaches to Gen Y Sephora and Nordstrom’s latest efforts
No slowing down in targeting younger shoppers, increasing threat to department stores:
Merchandising in ‘discovery format’ not by brands
Testing more interactive in-store features, e.g., Fragrance Sensorium
Leveraging online: online-only deals, exclusive products and Beauty Talk blog and community forum with mobile app
New “department store” brands arriving, e.g., Clinique and Bobbie Brown
Source: Kantar Retail Analysis and company media

40. Adding High-end Cosmetics to Value Offer
On mall and traditional department store implications as Century 21 debuts MAC
Off-pricers usually, sell discontinued, slow selling, RTV beauty products at moderate to deep discount, inconsistent mix and availability
Nordstrom Rack model – High penetration in single brands, i.e., Neutrogena and Origins
Source: Kantar Retail Analysis, Store Visits and company reports

41. What to Watch For New initiatives and strategies on the horizon
H&M U.S. eCommerce launch, set for late summer 2013
TJX expected to launch within year, but no confirmed date
Ecommerce
JCPenney completion of new home department, featuring shops from various designers including Martha Stewart, slated for late May 2013
Macy’s partnership with Finish Line (FL) began April 13 to complete 188 shops in Macys stores by year end, FL will assume control over macys.com athletic shoe sales on May 5. Over next 18 months, 472 additional shops will debut
Shop in Shops
Gap Inc., continuing to shave off U.S. square footage (Gap, BR and Old Navy) to focus on International and ramping up expansion of Intermix, Athleta and Piperlime banners
Macy’s recently opened four new 150K sq. ft. stores, 100k smaller than the typical Macy’s. Plans continue in response to spending shifts and flexibility in fill-in markets. Even consider 70K sq. ft. lifestyle format in more urban markets… ongoing over next many years
Right Sizing
Source: Kantar Retail Analysis, and company reports

42. Growth Trends: Key Implications
Working and refining relevant loyalty and social initiatives into growth strategies, essential
New users and uses of/for online and bricks and mortar, mobile and social continuing to evolve, fast
Anticipate push for back-to-school (and other “holiday” seasons) to be earlier, more dynamic … consider unique needs
Expect more growth from categorical, geographical, and target shopper leverage
Challenges on mall and for department stores not easing
Source: Kantar Retail analysis

43. Mid-Year Forum / Chicago & New York City
Build an integrated, strategic and “thought-tested” plan for 2014
Day 1 - “Where to Play,” addresses 3 business questions:
Which changes in the marketplace matter to retail growth & how do I find meaning?  
How, should I be changing my 2014 plans/objectives based on the change drivers?
What are winning retailers doing to outpace the market? 
Featured speakers:
Bryan Gildenberg / Chief Knowledge Officer
Leon Nicholas / Senior Vice President
John Rand / Senior Vice President
David Marcotte / Senior Vice President
Mary Brett Whitfield / Senior Vice President
Frank Badillo / Chief Economist
Anne Zybowski / Vice President
Day 2 “How To Win” - breakout sessions that take a look at specific retailers, channels, and topics. 
Organized around “customer/channel,” “digital/shopper,” and “planning,” and designed to explain the change dynamics outlined on Day 1 are shaping marketplace strategies and plans. 
Attend 4 focused 100-minute “power sessions”
Two Locations:
Chicago / June 12-13
Hyatt Regency Chicago
New York City / June 19-20
Intercontinental Times Square
Breakout Schedule
Track 1 / Customer/Channel
Walmart’s Momentum: Supercenter Fights for its Spark / Staying on Target: Planning in the Midst of a Shifting Landscape / Chain Drug: Keeping Up with the Channel Evolution
Track 2 / Customer/Channel
Chain Grocery: The Big Picture / Supermarket Transformation / Value Discounters: The Who , Where, What To Do About It / Winning with the Warehouses: Keeping Club Relevant
Track 3 / Digital/Shopper
Winning with Amazon / The New Shopping Cohort: New Requirements, Different Expectations / Navigating Life in the Amazon / The Real Story of Mobile Shopping
Track 4 / Topical
Canada the Emerging Market / Omni-retailing: Integrating eCommerce into Retail Strategy / Walmart’s Next Directions: New Avenues for Growth / Small Box Retailing
Pricing for either location:
$2,795 for 2 full days

44. QUESTIONS? Loyalty Program Participation Drivers Getting Social
Submit questions on Q&A panel on right side of screen
Loyalty Program Participation Drivers
Getting Social
Emerging Growth Trends Around the Landscape

45. Jahnia Sandford
Analyst P
Mary Brett Whitfield
Senior Vice President P