© 2014 Inmar, Inc. Understanding and Engaging the Hispanic Shopper Manager, Shopper Insights Nicole Steward-Streng

© 2014 Inmar, Inc. About Inmar Manages more print and digital retail content than any other company globally Largest digital coupon networks for clip to card digital loyalty, operating in 15 countries 2 Over $40 billion in payments and receivables

© 2014 Inmar, Inc. Across all shoppers… 3

© 2014 Inmar, Inc. 4 I have to be smarter than I used to be… about the products I choose, what I feed my kids, how it was produced, what ingredients are in it… and how I spend my money… “ “

© 2014 Inmar, Inc. 5 Evolving shopper sentiment 65% I shouldn’t have to work so hard to be a smarter shopper. Source: E-Retail Summit, 2012, RAMA “ ”

© 2014 Inmar, Inc. Changing shopper sentiment: From effort to entitlement 6 “If I put in the effort, I can get deals on the brands I buy.” “If I shop a store a lot, I shouldn’t have to work for deals I deserve.”

© 2014 Inmar, Inc. Shoppers more engaged than ever before sources of information sources of information 2014 proj. Source usage, retail purchases, North America Grocery 2.1 Grocery 4.7

© 2014 Inmar, Inc. 8 Hispanic Shoppers

© 2014 Inmar, Inc million million 2060 By 2060, nearly one in three U.S. residents will be Hispanic Hispanic shoppers are a growing demographic 9 Source: 2012 Population Estimates Source: Population Projections Hispanics are the nation's largest ethnic minority. 17% of the nation's total population Number of Hispanics added to the nation's population between July 1, 2011 and July 1, million

© 2014 Inmar, Inc. Diversity under the “Hispanic umbrella”: Cultural origins represented in our sample 10 were born outside of the United States reported their parents were born outside of the United States Source: Inmar Hispanic Study (May 2014) Mexican 43% Puerto Rican 18% Spanish 11% Other 28% (Hispanic Shoppers n=702) 23% 60%

© 2014 Inmar, Inc. Inmar Hispanic Study Online Survey 25 minutes Collected May 2014 Sample Design 1,010 interviews (n=702 Hispanic, n=306 non-Hispanic) Adults 18+ Primary/Shared decision-maker for grocery and household purchases Visited a retail store in the past 7 days 11 Developed acculturation scale for Hispanic shoppers based on measures from Pew Research Hispanic Trends Project, including language preference and generational status.

© 2014 Inmar, Inc. Inmar 2015 Shopper Behavior Study Methodology Online Survey 20 minutes Collected January 2015 Sample Design 1,075 interviews 23% identify as Hispanic/Latino Adults Primary/Shared decision-maker for grocery and household purchases 12

© 2014 Inmar, Inc. Inmar Hispanic Study: Demographics 13 Age HispanicNon-Hispanic High School or less21%25% Associates Degree33%30% Bachelor's Degree33%31% Some post-graduate work or more12%13% Education Marital StatusGeographic Area Income Hispanic Non-Hispanic HispanicNon-Hispanic Single31%23% Living with Partner9%7% Married48%45% Widowed/Divorced/Separated11%25% 51% Hispanic 22% Non-Hispanic Households with children HispanicNon-Hispanic Urban47%27% Rural13%28% Suburban40%45% Source: Inmar 2015 Shopper Behavior Study

© 2014 Inmar, Inc. Inmar Shopper Behavior Study: Demographics 14 HispanicNon-Hispanic High School or less21%25% Associates Degree33%30% Bachelor's Degree33%31% Some post-graduate work or more12%13% Education Marital StatusGeographic Area Income Hispanic Non-Hispanic HispanicNon-Hispanic Single31%23% Living with Partner9%7% Married48%45% Widowed/Divorced/Separated11%25% 58% Hispanic 22% Non-Hispanic Households with children HispanicNon-Hispanic Urban47%27% Rural13%28% Suburban40%45% Age Source: Inmar 2015 Shopper Behavior Study

© 2014 Inmar, Inc. Three facts about Hispanic shoppers They are… 1.Meeting their grocery needs beyond the traditional grocery store but are engaged with loyalty programs to save 2.Tech savvy, engaging with their smartphone across the shopper journey 3.Influenced by promotions and are looking for ease of use 15

© 2014 Inmar, Inc. Meeting their grocery needs beyond the traditional grocery store but are engaged with loyalty programs to save 16 1

© 2014 Inmar, Inc. Hispanic shoppers shop for groceries in more channels than non-Hispanic shoppers 17 (Hispanic Shoppers n=702; Non-Hispanic Shoppers n=306) Statistically significant differences between Hispanic and non-Hispanic shoppers at a 95% level of confidence Source: Inmar Hispanic Study (May 2014) GroceryWarehouse Club Mass Merchandisers & Supercenters DrugDollar & Discount Convenience Specialty Ethnic Salvage Stores & Flea Markets

© 2014 Inmar, Inc. Ethnic foods are being purchased across channels 18 (Hispanic Shoppers N=702) Source: Inmar Hispanic Study (May 2014)

© 2014 Inmar, Inc. 1977% say they participate in a grocery store loyalty program plan their weekly meals around what products are on sale through their grocery store loyalty program26% believe the brands that they love are more affordable because they use a grocery store loyalty card37% say they load digital coupons to their grocery store loyalty card because they believe it is easier than clipping coupons27% Hispanics are highly engaged with grocery store loyalty programs Source: Inmar 2015 Shopper Behavior Study

© 2014 Inmar, Inc. 2071% say they shop at stores where they are loyalty program members more than at stores where they are not say they often buy more than they would otherwise because of the discounts/rewards they get as a loyalty program member62% say they try products that they may not otherwise try because of the discounts/rewards they get as a loyalty program member60% Participating in loyalty programs changes purchase behavior Source: Inmar 2015 Shopper Behavior Study

© 2014 Inmar, Inc. Rewards programs are important to Hispanic shoppers 21 (Hispanic Shoppers n=702) 45% Source: Inmar Hispanic Study (May 2014) How important is it to you for a pharmacy to have a rewards program linked to in-store savings? 34% Somewhat 23% Very 4% Not at All 8% Not Very 26% Neither would switch pharmacies for a store discount

© 2014 Inmar, Inc. Tech savvy, engaging with their smartphone across the shopper journey 22 2

© 2014 Inmar, Inc. Hispanic shoppers who shop online for groceries buy 40% of their total groceries online 23 (Hispanic Shoppers N=702) Source: Inmar Hispanic Study (May 2014) 20% Shop online for groceries

© 2014 Inmar, Inc. “Would you use order groceries online?” 24 Non-Hispanic Shoppers (Hispanic Shoppers n=702; Non-Hispanic Shoppers n=306) Source: Inmar Hispanic Study (May 2014) 58% Yes Hispanic Shoppers 33% Yes

© 2014 Inmar, Inc. More than three-quarters of Hispanic shoppers use smartphones 25 (Hispanic Shoppers N=702) Source: Inmar Hispanic Study (May 2014) 29% 67%

© 2014 Inmar, Inc. Top 10 ways Hispanic shoppers are using their smartphones during the shopper journey 26 (Hispanic Shoppers N=702) Source: Inmar Hispanic Study (May 2014) 56% 55% 54% 53% 51% 49% 50% 49% 48% 46% Find store locations Compare features against other products Look at newspaper inserts online Look for online coupons to use in-store Plan which retail store to purchase product Look for information on upcoming sales Compare prices across different websites Look at images of the product Check availability of the item in the store Digitally “clip” a coupon online

© 2014 Inmar, Inc. Top 10 ways Hispanic shoppers are using their smartphones during the shopper journey 27 (Hispanic Shoppers N=702) Source: Inmar Hispanic Study (May 2014) 56% 55% 54% 53% 51% 49% 50% 49% 48% 46% Find store locations Compare features against other products Look at newspaper inserts online Look for online coupons to use in-store Plan which retail store to purchase product Look for information on upcoming sales Compare prices across different websites Look at images of the product Check availability of the item in the store Digitally “clip” a coupon online

© 2014 Inmar, Inc. Hispanic Shoppers’ Mobile Promotion Wish List 28 48% want coupons sent to their mobile phone for products that they normally buy (+) 50% would like to be able to present coupons to the cashier using their mobile phone (+) 63% want stores to remind them via that they have coupons that they can redeem Source: Inmar 2015 Shopper Behavior Study

© 2014 Inmar, Inc. Influenced by promotions and looking for ease of use 29 3

© 2014 Inmar, Inc. 30 Hispanics regularly use, on average, 5.0 methods to discover/acquire coupons – compared to non-Hispanic shoppers who report regularly using 3.1 methods. of Hispanics regularly use coupons 44% Source: Inmar 2015 Shopper Behavior Study

© 2014 Inmar, Inc. Hispanic shoppers are more likely to use rebates 31 54% have used rebates in the prior three months 56% say they would try a new product if they have a rebate 54% say they would switch brands if they had a rebate that makes another brand cheaper Source: Inmar 2015 Shopper Behavior Study

© 2014 Inmar, Inc. Half of Hispanic shoppers report that promotions are very or extremely influential in their decision to try a product 32 (Hispanic Shoppers n=702) Source: Inmar Hispanic Study (May 2014)

© 2014 Inmar, Inc. 89% of Hispanic shoppers regularly use the following types of special offers 33 (Hispanic Shoppers n=702) Source: Inmar Hispanic Study (May 2014)

© 2014 Inmar, Inc. Coupons are influencing these shoppers’ lists 34 (Hispanic Shoppers n=702) Source: Inmar Hispanic Study (May 2014) of Hispanic shoppers make their shopping list and then search for coupons… Over 50% …but if they find the right offer many will adjust their list accordingly 58% Sometimes 17% Most of the time 4%Always 6% Never 16% Rarely

© 2014 Inmar, Inc. Digital coupons are helping in the search for deals 35 (Hispanic Shoppers n=702) Source: Inmar Hispanic Study (May 2014) 33% “I wish all coupons were digital.” 46% “I often use paper coupons and digital coupons together.” 37% “I actively delay purchases to wait for coupons/special offers.”

© 2014 Inmar, Inc. But shoppers want it to be easy! 36 (Hispanic Shoppers n=702) Source: Inmar Hispanic Study (May 2014) "There are too many rules / exclusions for using coupons." 39%24% "It takes too much time to find coupons." 37%20% "I would use coupons more if they were available in Spanish." 17%6% Those without smartphones

© 2014 Inmar, Inc. But shoppers want it to be easy! 37 29% of Hispanic shoppers who scored low on the acculturation scale would use more coupons if they were available in Spanish (Hispanic Shoppers n=702)) Source: Inmar Hispanic Study (May 2014) "There are too many rules / exclusions for using coupons." 39%24% "It takes too much time to find coupons." 37%20% "I would use coupons more if they were available in Spanish." 17%6% Those without smartphones

© 2014 Inmar, Inc. Conclusion 38

© 2014 Inmar, Inc. Hispanic shoppers use technology 39 compare product prices compare product features read independent reviews 66% 60% 56% “I have to be smarter than I used to be… about the products I choose, what I feed my kids, how it was produced, what ingredients are in it… and how I spend my money…” Source: 2015 Shopper Behavior Study

© 2014 Inmar, Inc. Evolving shopper sentiment 40 45% of Hispanics want a website that allows them to shop online 68% of Hispanics want stores to them with coupons for products they normally buy 81% of Hispanics want coupons automatically applied to their purchases 63% of Hispanics want stores to remind them via that they have coupons they can redeem 65% “I shouldn’t have to work so hard to be a smarter shopper.” Sources: Inmar Hispanic Study (May 2014) & 2015 Shopper Behavior Study

© 2014 Inmar, Inc. Changing shopper sentiment: From effort to entitlement 41 Source: 2013 Inmar Shopper Study “If I put in the effort, I can get deals on the brands I buy.” “If I shop a store a lot, I shouldn’t have to work for deals I deserve.”

© 2014 Inmar, Inc. About needing to save: “I am young, trying to finish school, my husband is trying to finish school, I have a one year old, and money is tight. My mom taught me everything I know about saving. She handed this down to me. Who wouldn’t want cheaper stuff?” How she plans for shopping: “Unless its a really good deal, we know exactly what we are going to buy and exactly what we’re going to pay. If its one penny off we let the cashier know.” What the future holds: Meet Itzel, age 19, a third generation Mexican-American living in NC Concerned about health: Buys organic foods primarily, even if she “eats from coupons” … if I can give him the best, I will do so.” 42 About technology: “My phone is always with me if its not I freak out, I use Facebook, Instagram, Yahoo News, s from retailers though I do not give all marketers my .” Wishes: More promotions were available for milk and more organic products were available.

© 2014 Inmar, Inc. 43 Keys to connecting with the Hispanic shopper: 1.Provide opportunities for reward to build loyalty 2.Provide the content shoppers are looking for at their fingertips 3.Make sure coupons meet shoppers where they are

© 2014 Inmar, Inc. Thank you! Questions? Contact Nicole at 44