The New Path to Purchase Mary Brett Whitfield Senior Vice President Anne Zybowski Vice President Big Idea March 2013

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The Path to Purchase™ … Was always a simplified model for a complex process BEFORE AFTER DURING NAVIGATE STORE MAKE SELECTION CHOOSE OUTLET INFLUENCE SHOPPER BEHAVIOR Create Demand Choose Outlet Navigate Store Select & Buy User Satisfaction Consumer Shopper Consumer TRUSTED MEDIA RE-PURCHASE Source: Kantar Retail analysis

Shopper Has Gone Digital Digital Shopper = Empowered Shopper Among Primary Household Shoppers … 47% The Digital Shopper Equipped Engaged Active Have a Smartphone 24% 59% Have Made an Online Purchase in Past Six Months Have a Tablet Significant year-to-year increase in participation rates in 13 digital activities … shopping well entrenched in the mix! Source: Kantar Retail analysis, Kantar Retail ShopperScape®,: January 2012, December 2012, January 2013

Engaged … A Lot of Activity Outside the Four Walls of Stores Digital Engagement (past six-month participation rates among all primary household shoppers) All Shoppers Gen Y Gen X Boomers Seniors Sample size 4,011 531 1,225 1,565 690 Online Activities   Purchased a product online 59% 51% 60% 62% Researched a product online before purchasing at a store 42% 40% 44% 35% Signed up to receive emails from a retailer 32% 31% 33% 27% Downloaded, used online coupons for an in-store purchase 24% 29% Used a game or entertainment "app" on mobile device 23% 36% 16% 7% Accessed a retailer Web site on mobile device 17% 30% 11% 5% Social Media Activities Spent time on a social networking site 61% 56% 49% Engaged in social networking conversations online 46% 18% Accessed a social networking site on mobile device 41% Used a social networking "app" on mobile device 26% 45% 37% 8% Gen Y/X digital social butterflies; Gen X most purposeful Note: Shading indicates significantly greater percentage than all shoppers (95% confidence level). Source: Kantar Retail ShopperScape® January 2013

The Shopper Is Omni-Channel ... … which creates new (and evolving) expectations of retailers and shopping experiences Social Shopping Media Information Source: Kantar Retail analysis

New (& Evolving) Expectations of Retailers Personalization Convenience 24/7 Access Conversation Price Transparency Exclusive Promotions Source: Company Websites, Kantar Retail analysis

The New Path to Purchase Information and social media alter research and advocacy Create Demand Choose Trusted Source Navigate Store/Site Select & Buy Choose Channel User Satisfaction Advocate Community Loyalty Trust Source: Kantar Retail analysis

Information Is Critical to Buying Process Trusted Source for information is a new, key area of focus 49% of shoppers researched a product online before making a purchase at a store 41% of shoppers read reviews before making their last online purchase Choose Trusted Source 3rd Party/Social Google/ Search Blogs Communities Facebook Twitter Pinterest Other Social Manufacturer Vendor.com Brand sites Retailer Retailer.com Amazon.com Source: Kantar Retail analysis, Kantar Retail ShopperScape® January 2013

In World of Social and Consumer-Generated Media, Advocacy Is the New PR Moves well beyond “satisfied” customers Engagement Conversation Listen Advocate Community Choose Trusted Source Source: Kantar Retail analysis, Company Websites, Facebook

Meeting Shopper Needs along a New Path in an Omni-Channel World What Has Changed What It Means What To Do Shoppers add “choose trusted source” to shopping routines. Shopper marketing needs to start significantly before shoppers are in front of a shelf or ready to click “add to cart.” Be present wherever and whenever shoppers are Ensure visibility at every potential point of influence Through social media and social networking, shoppers have the ability to share and shape opinions through advocacy. The retailer and brand mindset must shift from an environment where retailers and brands wield control to one where they are but one of myriad influencers. Adopt a test and learn culture Be willing to fail quickly Source: Kantar Retail analysis

Anne Zybowski Vice President anne.zybowski@kantaretail.com Mary Brett Whitfield Senior Vice President marybrett.whitfield@kantarretail.com T +1 614 355 4010