1. Presented by: NEW WORK AND CAPABILITIES IN 2013 AND BEYOND Leon Nicholas Senior Vice President February 2013 Big Idea

2. © Copyright 2013 Kantar Retail Drivers of Marketplace Change Can Be Separated Into 3 Families 2 Source: Kantar Retail analysis …And Each One Can Be Distilled to One Word

3. © Copyright 2013 Kantar Retail …& Five Core Trends Source: Kantar Retail analysis 3 Urbanization Retail Outlet Personalization Localization Online Smaller boxes

4. © Copyright 2013 Kantar Retail Scale of the New Work and Capabilities Three realms Source: Kantar Retail analysis 4 Info/analytics People/skills Product

5. © Copyright 2013 Kantar Retail 1. Product –New formats suggest varied product configurations— Is marketing on board? –Speed to innovation becomes critical –Online “shelf appeal” must be considered –Production agility to enable bounded customization is lacking for scale-driven firms… Are you nimble + fast enough? 5 Supplier Actions: Elevate packaging decisions; cut new product timelines in half; experiment with customization Source: Kantar Retail analysis

6. © Copyright 2013 Kantar Retail 2. Information and Analytics –Inputs increase dramatically—structured and unstructured –Methods need to account for non-traditional sources –Partners need to be evaluated to assess capabilities Layered, multi-stage scenarios Data distributions vs. averages Clustering on behaviors and outcomes –“Big data” less of a threat than useless insights It gets complicated… 6 Supplier Actions: Re-assess your company’s “filtering” and analytics gaps vs. market activities; scrutinize 3 rd parties… Source: Kantar Retail analysis

7. © Copyright 2013 Kantar Retail Algorithmic Tactics –Who you are, where you are, what you’ve done, in your “social genome”…mediated through an algorithmic layer  personalized –Automating the most effective price/promotion to the shopper –Driving store/cluster assortment automation and triggers 7 “In the age of the Internet, fixed prices are a thing of the past.” Oren Etzioni, University of WA, September 2012 algorithm Source: Kantar Retail analysis

8. © Copyright 2013 Kantar Retail Supply and Demand Indicators –Points of influence fragment along new PTP Promotional opportunities diversify…and punctuate Old signals can now mislead! –Multiple formats and media enable transactions –Interconnected domains increase Online promotion…but pickup in store Large stores serve as DCs Number, speed, and complexity increase 8 Supplier Actions: Audit your “receptivity” to demand signals…and assess your capacity to flex with retailer logistics. Source: Kantar Retail analysis

9. © Copyright 2013 Kantar Retail Holistic Logistics 9 Manufacturer Warehouse Stores Home Source: Kantar Retail analysis

10. © Copyright 2013 Kantar Retail 3. People and Skills –Generation and ethnicity matter –Skills matter Synthesis Multiple disciplines Emotional and cognitive intelligence Innovation and execution –Does our industry appeal to Generation Y? The biggest issue 10 Supplier Actions: Candidly assess 3 gaps: generational and ethnic representation, talent, and appeal. Source: Kantar Retail analysis

11. © Copyright 2013 Kantar Retail Core Work for Suppliers Invest in supply chain skills, analytics, and software Shift new resources to small box, urban, & online retailing Retool market research to focus on multi-channel shopper insights as a competitive advantage; pattern recognition Balance talent mix: Technology/analytics and verbal/ narrative/synthesis skills Re-deploy talent horizontally to enable greater cross-fertilization-- marketing, analytics, and operations Getting started today 11 Source: Kantar Retail analysis; RSR Research, Internet Retailer, Sept 2012. Info/analytics People/skills Product

12. © Copyright 2013 Kantar Retail www.KantarRetailiq.com Leon Nicholas T: +617-588-4146 Senior Vice President leon.nicholas@KantarRetail.com M: +603-770-9687