Family Codes for Manufacturers Family Codes for Manufacturers Presented by Ken Conrad Pinpoint Data, LLC

Agenda 1.What is a family code and how does it work? 2.Industry Overview a.Benefits for establishing family codes b.Industry update on retailer validation 3.Basic Guidelines 4.The Family Code process 1.Establishing an effective structure 2.Publishing data 3.Considerations 5.What’s next?

Family Code Overview

What are Family Codes? 1.3-digit number that identify a product or “family” of products 2.Only used in couponing 3.Assigned by manufacturers 4.Associated with UPC’s, but are not contained in the item UPC

How do Family Codes Work? 1.The consumer’s order is scanned, followed by the coupon(s). 2.The POS software searches for items with the same Company Prefix and family code (if family code validation is enabled). 3.If a match is found, the discount is given.

How do Family Codes Work? (cont.) 4.If a match is not found, cashier intervention required: a.Incorrect item purchased b.Correct item purchased, but incorrect/incomplete family code data from manufacturer – override required, may result in fees!

Industry Overview

Family Code Benefits 1.Establishes defined guardrails around promotional activities a.Facilitates POS validation of intended products b.Limits unintended redemptions and consumer mal- redemption 2.Increased promotion ROI due to validated sales of promoted items 3.Retailer validation has increased significantly

Industry Update 1.Retailers scanning has tripled in the past 4 years 2.Estimated % of total coupon volume redeeming at family code level has increased considerably: 3 years ago: ~20-25% 1 year ago:~40-50% Next 3-6 months:up to 80%? 3.Retailers requesting manufacturers establish family codes

The Basics

Four Levels of Family Codes 1.The Universal Code – “000”: a.Validates any UPC that contains the corresponding CP b.Must be used if family codes have not been established 2.Super Summary Codes: a.End in two zeros - “x00” (e.g. 100) b.Validates any item with a family code matching the first digit c.Example: Super Summary Code 100 valid on items with family code assignments

Four Levels of Family Codes (cont.) 3.Summary Codes: a.End in only one zero “xx0” b.Validates any item with a family code matching the first two digits c.Example: Summary Code 110 is valid on items with family code assignments Family Codes: a.Do not end in “0” or “00” (e.g. 111) b.Only validates any item assigned with that specific family code

Hierarchy 000 ALL PRODUCTS for CP 000 ALL PRODUCTS for CP Universal Super Summary Summary Family

Establishing a Structure

General Guidelines 1.Set up according to how the manufacturer would like to promote/group products 2.Each Company Prefix has its own structure a.If a CP is shared, so is the structure b.The CP contained in each UPC determines to which structure that product is incorporated – a brand line may fall under multiple CP’s and therefore different structures 3.Consider a.forms, sizes (trial sizes), price point, etc. b.Current/Future strategies c.Future brand extensions/new product releases 4.Keep it simple

General Guidelines (cont.) 5.A product can only have one family code assignment, but a family code can contain multiple UPCs 6.Structure to fit the majority of your coupon promotions – it is difficult to design a structure that fits every possible scenario 7.Clear descriptions: Do not leave room for interpretation 8.Non-couponed items (e.g. trial sizes) a.Previously thought not to need a family code b.At least one new retailer validation process interprets no family code assignment as “wild card” c.If concerned assign to unused/far off number (e.g. 989)

Sample Hierarchy 000 ALL PRODUCTS for CP 000 ALL PRODUCTS for CP 100 Hair Care 200 Lotion & Body Wash 210 Lotion 120 SpaCare Brand 220 Body Wash 110 ProCare Brand oz Lotion oz Lotion oz BdyWsh oz BdyWsh 111 ProCare Shampoo 112 ProCare Conditioner 121 SpaCare Shampoo 122 SpaCare Conditioner

Sample Hierarchy ALL PRODUCTS for CP 000 ALL PRODUCTS for CP 100 Hair Care 200 Lotion & Body Wash 210 Lotion 120 SpaCare Brand 220 Body Wash 110 ProCare Brand oz Lotion oz Lotion oz BdyWsh oz BdyWsh 111 ProCare Shampoo 112 ProCare Conditioner 121 SpaCare Shampoo 122 SpaCare Conditioner 989 Trial/No Cpn

Publishing Family Codes

Distribution Process 1.Manufacturer’s responsibility to notify retailers 2.List should contain UPC, description, and specific family code assignment for each item 3.One central process: a.Handled internally b.Work with 3 rd party vendor 4.Allow ample lead time before coupon drop-date 5.Structure itself should not be published 6.Do not leave interpretations or assignments up to others

Sample List Item UPCDescriptionFamily Code oz. ProCare Shampoo oz. ProCare Shampoo oz. ProCare Shampoo oz. ProCare Conditioner oz. ProCare Conditioner oz. ProCare Conditioner oz. SpaCare Shampoo oz. SpaCare Shampoo oz. SpaCare Shampoo oz. ProCare Lotion oz. SpaCare Lotion211

Complete Structure 000 ALL PRODUCTS for CP 000 ALL PRODUCTS for CP Universal Super Summary Summary Family Products 100 Hair Care 200 Lotion & Body Wash 210 Lotion 120 SpaCare Brand 220 Body Wash 110 ProCare Brand oz Lotion oz Lotion oz BdyWsh oz BdyWsh 111 ProCare Shampoo 112 ProCare Conditioner 121 SpaCare Shampoo 122 SpaCare Conditioner UPC

Considerations & Best Practices

1.Ongoing Communication is critical a.Make sure everyone internally has up-to-date structure(s) b.Ongoing immediate notification of new item releases 2.Discontinued items - product shelf life usually determines timeframe for removal. When in doubt include. 3.Modifying family codes a.Can be done but not recommended frequently b.Most retailers store immediate “previous” family code, but some may only validate the current 4.Consider DataBar flexibility – up to 3 family codes can be used 5.Keep in mind retailer validation levels still vary

The 992 Family Code is an industry standard Family Code designed to bypass the purchase validation process 2.Coupons containing 992 can be used on any item in the store – regardless of associated Company Prefix 3.May or may not still validate the purchase quantity 4.DataBar capabilities limit need, but still used for specific scenarios: a.Random weight items b.Generic/non-branded purchase qualifier (e.g. “Buy any bread”) c.Offers for items that cross more than 3 CP’s 5.Should not be used to identify free items

What’s Next

1.Industry groups and leading manufacturers continue to request retailer adoption of Family Code validation 2.ACP is conducting a retailer-focused webinar in September 3.Continued education and implementation of proper Family Code use and process for manufacturers 4.Ensure all parties are poised to benefit from Family Code adoption

Questions?