1. AS CONSUMERS EVOLVE, RETAIL ANALYTICS ADVANCE

2. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 2 TODAY’S PANEL Jon Quinn Vice President, Marketing Strategy, Safeway Adam Holyk Group Vice President, Insights and Analytics, Walgreens Ravi Dhar George Rogers Clark Professor of Management and Marketing, Yale School of Management & Director, Center for Customer Insights

3. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 3 COMPLEX DYNAMICS IMPACT RETAIL ANALYTICS TECHNOLOGY CHANGING SHOPPERS RETAILER ECONOMICS INTENSIFYING COMPETITION

4. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 4 RETAILERS ARE PROVIDING SHOPPERS MORE ACCESS

5. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 5 TECHNOLOGY IS CREATING PRICE TRANSPARENCY

6. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 6 TECHNOLOGICAL CHERRY PICKING

7. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 7 SHOPPERS MIGHT KNOW MORE THAN YOU DO

8. PRICING

9. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 9 SIMPLE OUTCOMES, COMPLEX ANALYTICS In which stores? At What Price? How much Promo Support? Which items to carry?

10. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 10 THE WINNING ANALYTIC STRATEGY GET THE RIGHT INSIGHTSORGANIZE TO WINEXECUTE WITH GREATER PRECISION

11. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 11 THE RIGHT SHOPPER INSIGHTS PERCEPTION OF VALUE DRIVES RESPONSE TO PRICING Prof. Michael Porter – Competitive Advantage Buyers will not pay for value that they do not perceive, no matter how real it may be. REQUIRED INSIGHTS: What they do, inside & outside the box What they perceive & believe

12. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 12 INSIGHTS TO BOTH BEHAVIOR AND BELIEFS of your shoppers are “core”… 25% ….they drive most of your dollars 59% your share of their All Outlet spend 36% … but they aren’t very loyal WHAT SHOPPERS SAID: Everyday low prices Fresh produce Well stocked Prices well labeled Grocery selection Clean store Fresh meat & seafood Nearby location 1 2 3 4 5 6 7 8 WHAT SHOPPERS DID: Fresh produce Grocery selection Fresh meat & seafood Prepared foods Store brand One-stop shopping Well stocked

13. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 13 THE RIGHT COMPETITIVE INSIGHTS Yoplait 6 ounce Client 3: $0.75 ACTUAL VS. ASSUMED COMPETITORS STRATEGY PRICE POSITIONING

14. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 14 10% Also Highly Elastic 8MM Elasticity Estimates 80MM Competitive Price Points EYES ON THE PRIZE, SIZE OF THE PRIZE 25% “Overpriced” OPPORTUNITY $900M

15. DISCUSSION

16. ASSORTMENT

17. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 17 Average # of unique UPCs per household purchased in Grocery Channel in a year WHY ASSORTMENT ISN’T EASY 328 Items selling in Grocery weekly average Items selling in Drug weekly average 16,897 4,932 Can’t profitably be all things to all people Hyper-local assortment impacts supply chain efficiency Assortment is “slower” than pricing, just as important

18. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 18 Water Growing MTA’s: 3,519 Infant Nutrition Growing MTA’s: 2,414 Frozen Pizza Growing MTA’s: 659 ALL DEMAND IS LOCAL Growing: > 2% $ growth; Stable >-2% and -2% Source: Nielsen Scan and Panel Data, Nielsen Analysis CHANGE IN DOLLARS DECLININGGROWINGSTABLE

19. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 19 NURTURE Review Slow movers for de-listment AVG SALES RATE DEVELOP Increase Items RATIONALIZE Make sure you have the best items in distribution SQUEEZE De-list worst performers DISTRIBUTION (# ITEMS) FAST SLOW NEGATIVEPOSITIVECONSUMER RESPONSE TO ASSORTMENT (INCREMENTALITY) SIMPLE FRAMEWORKS ENCOURAGE ACTION

20. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 20 LOCALLY RELEVANT DECISIONS, AT ENTERPRISE SCALE Super- Premium Segment Value Segment Assortment Response: Total Category

21. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 21 RIGHT PRODUCTS, RIGHT PLACES Source: Nielsen AssortMan, TUS Mass, 52 weeks ending 10/13/12 Laundry Sales ($MM) Laundry 4.9% 0.3% 4.5%

22. DISCUSSION

23. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 23 TABLE TALK QUESTIONS What are the industry challenges for analytic strategy and capacity keeping up with the rate of change in the industry, e.g. personalization and dynamic pricing? As a Manufacturer or a retailer, what would you change about collaboration to address these analytical needs? With the evolution of smart phones and information access, how do you see your analytical needs changing?

24. THANK YOU