1. Consumer Engagement in the Connected Age Richard Cantwell Chairman – Board of Governors, EPCglobal

2. Marketing A typical scenario I am an executive at Acme Enterprises. I am an executive at Acme Enterprises. Acme launches a new allergy-free detergent. Acme launches a new allergy-free detergent. We need consumers to know about this product. We need consumers to know about this product. How do I reach them? How do I reach them? (This talk will get to technology… eventually) (This talk will get to technology… eventually)

3. A history of marketing The “Old Days” (100-150 years ago)  Word of Mouth The “Old Days” (100-150 years ago)  Word of Mouth Targeted Targeted Credible Credible 20 th Century  Mass Media 20 th Century  Mass Media TV, Radio, Syndicated Print TV, Radio, Syndicated Print Everyone received the same message Everyone received the same message Built big Brands Built big Brands Today  Product offerings & target audiences are both more segmented Today  Product offerings & target audiences are both more segmented Reaching today’s consumer is a marketing challenge Reaching today’s consumer is a marketing challenge

4. A history of marketing 3000 BC, Babylon: Bill-boards/Displays 1472, Europe:Print advertisement 1884, US:Coupons make appearance 1920, US: Radio advertisement 1930’s, US: Radio soap operas 1950’s, US: TV advertisements 1984, US: “Guerilla marketing” introduced 1999, Worldwide:Internet ads reach $2 Billion 2004, US:Product placement in films reaches $1 Billion

5. The problem The battle for eyeballs: TV viewer-ship fragmented TV viewer-ship fragmented Big companies shifting dollars out of traditional media Big companies shifting dollars out of traditional media Internet advertising lacks meaningful metrics & adequate capabilities (McKinsey, 8/07) Internet advertising lacks meaningful metrics & adequate capabilities (McKinsey, 8/07) Other forms of digital media little understood Other forms of digital media little understood Billboards? Billboards? Marketing is at a cross-roads An answer: Reach consumers in the store Reach consumers in the store Pizza Hut ad on the side of a Russian Proton rocket!

6. The possibilities Interaction/ context No interaction Location(RFID)Identity (Loyalty cards) Video Fixed Fixed Cart-video Cart-video Cycling advertisements Video attracting you to items related to your cart? Video showing product related to previous purchases? Audio Fixed Fixed Beamed iPod? Beamed iPod? Store announcements Music in exchange for location- related ads? Music related to previous purchases? Value-Offer Promotional announcements Offer related to your purchases? Promotional prices & special offers on above?

7. This is already happening Wal-Mart TV http://www.wirespring.com/dynamic_digital_signage_and_interactive_kiosks_journal/articles/Is_Wa l_Mart_s_in_store_TV_network_really_more_effective_than_TV_-255.htmlhttp://www.wirespring.com/dynamic_digital_signage_and_interactive_kiosks_journal/articles/Is_Wa l_Mart_s_in_store_TV_network_really_more_effective_than_TV_-255.html: http://www.wirespring.com/dynamic_digital_signage_and_interactive_kiosks_journal/articles/Is_Wa l_Mart_s_in_store_TV_network_really_more_effective_than_TV_-255.html The results from [marketing research partner] TNS's 2005 study, conducted with over 5,500 Wal- Mart shoppers, highlight that customers who have viewed advertising for specific brands on Wal- Mart TV are significantly more likely to: The results from [marketing research partner] TNS's 2005 study, conducted with over 5,500 Wal- Mart shoppers, highlight that customers who have viewed advertising for specific brands on Wal- Mart TV are significantly more likely to: Agree with positive statements about those brands (61% agreement) vs. customers who did not see those same advertisements (40% agreement). Agree with positive statements about those brands (61% agreement) vs. customers who did not see those same advertisements (40% agreement). Purchase the advertised product "today" (15% vs. 4%) Purchase the advertised product "today" (15% vs. 4%) Plan on purchasing the product "in the future" (85% vs. 62%). Plan on purchasing the product "in the future" (85% vs. 62%). The study also demonstrated that advertising on Wal-Mart TV drives significantly higher motivation levels than advertising for similar brands on in-home TV. The study also demonstrated that advertising on Wal-Mart TV drives significantly higher motivation levels than advertising for similar brands on in-home TV. Research commissioned by Premier Retail Networks (PRN) and conducted by AC Nielsen shows “… the average recall of a brand advertised on Wal-Mart television is 66%, compared with 24% for brands advertised on in-home television.” [source: “Wal-Mart Adds In-Store TV Sets, Lifts Advertising, Wall Street Journal (Sep 22, 2004)] Research commissioned by Premier Retail Networks (PRN) and conducted by AC Nielsen shows “… the average recall of a brand advertised on Wal-Mart television is 66%, compared with 24% for brands advertised on in-home television.” [source: “Wal-Mart Adds In-Store TV Sets, Lifts Advertising, Wall Street Journal (Sep 22, 2004)]Premier Retail NetworksPremier Retail Networks

8. This is really happening I will talk about 3 examples Wal-Mart TV Wal-Mart TV Smart Shopping Carts Smart Shopping Carts Promotions Promotions

9. Wal-Mart TV “… the average recall of a brand advertised on Wal-Mart television is 66%, compared with 24% for brands advertised on in-home television.” “… the average recall of a brand advertised on Wal-Mart television is 66%, compared with 24% for brands advertised on in-home television.” Customers 15% more likely to buy product today and 25% more likely to buy product in future Customers 15% more likely to buy product today and 25% more likely to buy product in futureSources: “Wal-Mart Adds In-Store TV Sets, Lifts Advertising, Wall Street Journal (Sep 22, 2004) “Wal-Mart Adds In-Store TV Sets, Lifts Advertising, Wall Street Journal (Sep 22, 2004) Research commissioned by Premier Retail Networks (PRN) and conducted by AC Nielsen Research commissioned by Premier Retail Networks (PRN) and conducted by AC NielsenPremier Retail NetworksPremier Retail Networks

10. Displays on the Cart Displays on the Cart: Example Modstream Displays on the Cart: Example Modstream Displays ads on the handle Displays ads on the handle 5-year life 5-year life RF update of messages from one central location RF update of messages from one central location

11. Interaction and display Media Cart Media Cart seekscannavigate

12. RFID in Promotions RFID is already being used for promotions Promotions displays are RFID tagged Promotions displays are RFID tagged Store doors have readers Store doors have readers Display movements are monitored Display movements are monitored Lack of movement is detected/corrected Lack of movement is detected/corrected 22% improvement in sales 22% improvement in sales

13. Now add consumer context Imagine if the Cart knew: Location from RFID/WiFi Location from RFID/WiFi Identity from RFID Identity from RFID Bluetooth/WiFi to download audio/video on the fly Bluetooth/WiFi to download audio/video on the fly Imagine if the display could signal: Rate of sale using RFID/WiFi Rate of sale using RFID/WiFi Now you could: Introduce customers to new products, product categories Offer up promotional pricing & special offers Measure efficacy of various promotions & displays Do dynamic pricing to avoid overstocks Provide consumer services like food allergy notification

14. Further possibilities Interaction/ context No interaction Location(RFID)Identity (Loyalty cards) Consumer Blogging? Video Fixed Fixed Cart-video Cart-video Cycling advertisements Video attracting you to items related to your cart? Video showing product related to previous purchases? Testimonials? Audio Fixed Fixed Beamed iPod? Beamed iPod? Store announcements Music in exchange for location- related ads? Music related to previous purchases? Commentaries? Value-Offer Promotional announcements Offer related to your purchases? Promotional prices & special offers on above?

15. In-store Consumer Engagement This is an key direction for marketing This is an key direction for marketing RFID will play a key role RFID will play a key role So will other technologies: So will other technologies: WiFi WiFi Bluetooth Bluetooth GPS? GPS? How this works is for technologists to figure out How this works is for technologists to figure out The benefits are huge for everyone! The benefits are huge for everyone!

16. Thank You! dcantwell@epcglobalinc.org