1. THE CONTINUING IMPACT OF DIGITAL ON SHOPPERS AND STORES

2. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 2 PANEL INTRODUCTION Jodi Kahn Chief Consumer Officer FreshDirect Deepika Pandey Group VP, Digital Marketing Walgreens Mike Brennan Chief Operating Officer Peapod

3. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 3 THE SHOPPER DRIVEN RETAIL FUTURE Always On, Seamless, Personalized Dynamic, Transparent, Endless Any Category, All Devices, Borderless

4. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 4 CPG ONLINE MARKET Source: Nielsen US Online CPG Sales ($ Billions) Online Penetration % of shoppers who claimed to purchase a CPG product online in past 3 months 6.5% 9.2% 201020112012201320142015

5. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 5 FRAGMENTING BEHAVIOR…CONTRADICTING FACTS CPG shoppers do not engage digitally Of total retail sales digitally influenced or sold by 2017 “I frequently shop for and purchase pet supplies, vitamins, cleaning products and frozen foods on line for the variety” 68% Feel the grocery store is more convenient 74% 60% FROM THE CONSUMER

6. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 6 Low value seeking, low shopping enjoyment Research driven, tech savvy Low trust, low tech savvy Enjoy shopping PATH FORWARD IS FOCUSED ON SHOPPER TYPES… Of the 32% of digital shoppers, 7 shopper segments Source: Nielsen Digital Shopping Information Survey; Updated Jan 2014 Digital Reluctants Tech Averse Digital Advocates Non Planners Tech Savvy Grab & Go Researchers

7. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 7 PERSONALIZE SHOPPER COMMUNICATIONS… Source: Nielsen 2014 Print to Digital Survey Opportunity to reach shoppers through many touchpoints Source: Nielsen 2014 Print to Digital Survey Communication Vehicle # of touchpoints used by shoppers: % by shopper segment ■ 0–3 ■ 4–7 ■ 8–11 Communication Enabler % of shoppers who own device Easier to reach younger shoppers through Smartphone/Tablet Smartphone Tablet 80% 71% 52% 30% 61% 51% 39% 26% ■ Millennials ■ Generation X ■ Boomers ■ Greatest Generation

8. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 8 INVESTING FURTHER IN DIGITAL TOUCH-POINTS Source: 2014 Retailer & Manufacturer partner survey; Q6 – In 5 years, do you envision spending more, the same, or less than you do today on each of the following marketing vehicles? Apps for phones/tablets Social media sites Emails to shoppers Text messages to shoppers Store website Money-saving apps Money-saving websites/blogs In-store kiosks Mailed circular Newspaper circular In-store circular 93% 90% 86% 79% 74% 57% 48% 14% 7% 2% RetailersManufacturers

9. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 9 RETAILERS WIN WITH MORE DIGITALLY ENGAGED SHOPPERS Average Equity Score Number of Retailer Touchpoints Share of Wallet Index Number of Retailer Touchpoints Source: 2014 Print to Digital Survey; Sources = Emails to shoppers, Store website, Apps for smartphones/tablets, Social media sites, Money-saving websites/blogs, Money-saving apps, Text messages to shoppers, In-store kiosks, Circulars – In-store, Circulars – Mailed, Circulars – Newspaper; Equity Score: a quantitative value that describes the level of affinity shoppers have for a retailer (taking into account a variety of factors including awareness, shopping behavior, and store preferences) Mass Grocer Drug Grocer Online Share of Wallet Equity Score

10. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 10 OPTIMIZE CHANNEL AND FORMAT Source: Q2 2013 Digital Shopping Information Survey Shopper Segments Shopper Needs Retailer Models Manufacturer Collaboration Small Format E-Commerce Home Delivery Pricing Form, Size, Content Supply Chain Non-Digital Grab & Go Non Planners Tech Savvy Researchers Digital Advocates Tech Averse Digital Reluctants Convenience Price/Value Service Shopability Assortment

11. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 11 $7,003 $5,850 THESE ARE VALUABLE SHOPPERS Digital Advocates Lowest household spend across all channelsHighest household spend across all channels Source: Digital Shopping Information Survey – Updated Jan 2014 Non Digital Yearly spend

12. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 12 WHAT THIS MEANS FOR YOU… Find Your Shopper Types Personalize Communication Optimize Channel & Format

14. ASK PANELIST QUESTIONS Walgreens: How does Drugstore.com fit into your e-commerce strategy? Given your large store footprint, how do you define Omnichannel to leverage that? What are the key initiatives you are pursuing? You have invested a lot in mobile, much driven by the RX, how is that redefining convenience and engagement both online and in your stores. Peapod: You have been at the game of convincing consumers to shift their everyday grocery to online. What do you think draws people in? What remain as barriers? Josh shared our digital segmentation, it is clear the consumer is changing – how are you adapting to who the online customer is? How did you work the model to leverage the Ahold stores with Peapod? FreshDirect You have a clear focus on younger urbanites and fresh / prepared foods has been a clear focus for you, how do you think about the key consumer segments and trips you are targeting? Being a pure play E-commerce retailer your store is you website and your app. How do you create a compelling user experience? What do you see as the challenges in scaling your model beyond the New York City metro area? General questions: What innovations do you see in the market that catch your attention? Retailers? Mobile apps? For Internal use only

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16. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 16 POLLING QUESTIONS Are these Yes/No questions or can there be multiple choice? Today e-commerce represents approximately 4% of FMCG sales. By 2020 do you think e-commerce’s percentage of FMCG sales will be: -10% -15% -20% -25% For your company how big of a priority is E-Commerce: –High priority: We have leader dedicated to growing this area –Medium priority: We want to meet shoppers needs who want to shop online, but don’t see this as a growth area. –Low priority: While we are monitoring the growth of E- Commerce, we think it represents a low percentage of how customers want to shop Currently, how much do you buy via e-commerce of your total purchases (includes digital goods): -Less than 10% -10%–30% -30%–50% -Over 50%

17. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 17 YOUR OPPORTUNITY TO SHARE AND CONNECT! What do you think shoppers want in a digital shopping experience, and what role does a physical store presence play. What impacts do you see mobile having in shopper engagement, on advertising and path to purchase?

18. AUDIENCE Q&A WITH PANELIST

19. Copyright ©2014 The Nielsen Company. Confidential and proprietary. 19 IN CLOSING… Let’s continue the dialogue Email Transcript FactPack Community