The future of grocery E-Commerce and The New Retail Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014 Nielsen Global Retail Landscape Report, 2015 Copyright © 2015 The Nielsen Company. Confidential and proprietary.

IMAGINE A GROCERY STORE WHERE… Pay without taking out your wallet Personal recommendations and offers Checking out takes seconds In the CPG industry, change has been more evolutionary than revolutionary, but digital is redefining what it means to “go” shopping

GLOBALLY SAY THEY USE ELECTRONIC DEVICES TO… MORE THAN SIX-IN-10 GLOBALLY SAY THEY USE ELECTRONIC DEVICES TO… Source: Nielsen Global Digital Landscape Survey, Q3 2014 – The Battle for Eye Space in a TV-Everywhere World

TAKE PICTURES/VIDEOS: 61% …CONNECT WITH FAMILY AND FRIENDS: 65% GET NEWS: 63% LISTEN TO MUSIC: 63% TAKE PICTURES/VIDEOS: 61% Source: Nielsen Global Digital Landscape Survey, Q3 2014 – The Battle for Eye Space in a TV-Everywhere World

HOW DO WE PLAN TO USE ELECTRONIC DEVICES IN THE FUTURE? SHARE MEDICAL INFORMATION GET AN EDUCATION GET A JOB BUY GROCERIES Source: Nielsen Global Digital Landscape Survey, Q3 2014 – The Battle for Eye Space in a TV-Everywhere World

HOW DO WE PLAN TO USE ELECTRONIC DEVICES IN THE FUTURE? 52% 52% 48% 46% ALL OF THE ABOVE Source: Nielsen Global Digital Landscape Survey, Q3 2014 – The Battle for Eye Space in a TV-Everywhere World

TOP DIGITAL OPPORTUNITIES BY REGION PERCENTAGE WHO ARE DEFINITELY/SOMEWHAT WILLING TO USE AN ELECTRONIC DEVICE FOR SELECTED ACTIVITIES Source: Nielsen Global Digital Landscape Survey, Q3 2014 – The Battle for Eye Space in a TV-Everywhere World Source: Nielsen Global Digital Landscape Survey, Q3 2014

THE CONNECTED COMMERCE ERA HAS ARRIVED Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

CONSUMERS ARE USING A BLENDED APPROACH + Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

ONE-QUARTER OF GLOBAL ONLINE RESPONDENTS SAY THEY ORDER GROCERY PRODUCTS ONLINE Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

MORE THAN HALF 55% ARE WILLING TO DO SO IN THE FUTURE Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

WORLDWIDE, WHAT PERCENTAGE SAY THEY USE AN ONLINE SUBSCRIPTION SERVICE FOR GROCERY SHOPPING? 7% 14% 28% 49% Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

WORLDWIDE, WHAT PERCENTAGE SAY THEY USE AN ONLINE SUBSCRIPTION SERVICE FOR GROCERY SHOPPING? 14% GLOBALLY, 14% SAY THEY USE AN AUTOMATIC ONLINE SUBSCRIPTION SERVICE. Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

MORE THAN HALF 54% ARE WILLING TO USE AN AUTOMATIC ONLINE SUBSCRIPTION SERVICE IN THE FUTURE Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

GLOBALLY, 13% ARE ALREADY USING A VIRTUAL STORE FOR GROCERY. NEARLY SIX-IN-10 ARE WILLING TO USE IT WHEN IT BECOMES AVAILABLE. Source: Nielsen Global Digital Landscape Survey, Q3 2014 – The Battle for Eye Space in a TV-Everywhere World

ONE-IN-10 SAY THEY ORDER GROCERIES ONLINE AND PICK THEM UP IN-STORE OR USING A DRIVE-THRU Source: Nielsen Global Digital Landscape Survey, Q3 2014 – The Battle for Eye Space in a TV-Everywhere World

DIGITAL NATIVES ARE DRIVING ONLINE CONSUMER PRODUCT GOODS SALES 30% OF MILLENNIAL AND 28% OF GENERATION Z RESPONDENTS SAY THEY’RE ORDERING GROCERIES ONLINE FOR HOME DELIVERY MILLENNIALS 21 - 34 GENERATION Z 15 - 20 Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

WHICH REGION BOASTS THE HIGHEST ADOPTION RATE OF ONLINE RETAILING OPTIONS FOR GROCERY? EUROPE LATIN AMERICA NORTH AMERICA ASIA-PACIFIC Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

WHICH REGION BOASTS THE HIGHEST ADOPTION RATE OF ONLINE RETAILING OPTIONS FOR GROCERY? REGIONALLY, ASIA-PACIFIC CONSISTENTLY EXCEEDS THE GLOBAL AVERAGE FOR ADOPTION OF ONLINE RETAILING OPTIONS. ASIA - PACIFIC Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

WILLINGNESS TO USE DIGITAL RETAILING OPTIONS IS HIGHEST IN DEVELOPED OR DEVELOPING REGIONS? ASIA-PACIFIC LATIN AMERICA AFRICA/MIDDLE EAST DEVELOPED REGIONS EUROPE NORTH AMERICA Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

WILLINGNESS TO USE DIGITAL RETAILING OPTIONS IS HIGHEST IN DEVELOPED OR DEVELOPING REGIONS? WILLINGNESS TO USE DIGITAL RETAILING OPTIONS IS 60% IN ASIA-PACIFIC AND LATIN AMERICA, 59% IN AFRICA/MIDDLE EAST REGIONS. TRAILING BEHIND ARE EUROPE AT 45% AND NORTH AMERICA AT 52%. DEVELOPING REGIONS ASIA-PACIFIC LATIN AMERICA AFRICA/MIDDLE EAST Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

WHICH ITEMS HAVE SHOWN THE MOST POTENTIAL FOR DIGITAL SUCCESS? PERSONAL CARE BEVERAGES FRESH FOODS FROZEN FOODS Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

WHICH ITEMS HAVE SHOWN THE MOST POTENTIAL FOR DIGITAL SUCCESS? STOCK-UP CATEGORIES LIKE PERSONAL CARE AND HOUSEHOLD PRODUCTS ARE PRIME SELECTIONS FOR E-COMMERCE INVENTORY. PERSONAL CARE WHILE IMMEDIATE-USE ITEMS LIKE FRESH AND FROZEN FOODS, CONDIMENTS AND BEVERAGES ARE SLOWER IN ADOPTION. Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

STOCK-UP AND PRICE-SENSITIVE CATEGORIES ARE BEST POISED FOR E-COMMERCE SUCCESS Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014 Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

ENJOYABLE AND ENGAGING EXPERIENCE 61% BELIEVE GOING TO THE GROCERY STORE IS AN ENJOYABLE AND ENGAGING EXPERIENCE Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

ONLINE OR MOBILE COUPONS (18%) AND MOBILE SHOPPING LISTS (15%) ARE THE MOST CITED FORMS OF IN-STORE DIGITAL ENGAGEMENT AMONG GLOBAL RESPONDENTS Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

GLOBALLY, WHICH GREW AT A FASTER RATE OVER THE PAST 12 MONTHS, LARGE OR SMALL FORMAT STORES? LARGE FORMAT LARGE SUPER MARKETS HYPERMARKETS SMALL FORMAT TRADITIONAL DRUG CONVENIENCE Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

GLOBALLY, WHICH GREW AT A FASTER RATE OVER THE PAST 12 MONTHS, LARGE OR SMALL FORMAT STORES? SMALLER FORMATS SUCH AS TRADITIONAL, DRUG AND CONVENIENCE GREW AT A FASTER RATE OVER THE PAST 12 MONTHS. SMALL FORMAT TRADITIONAL DRUG CONVENIENCE Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

GLOBALLY, WHICH GREW AT A FASTER RATE OVER THE PAST 12 MONTHS, LARGE OR SMALL FORMAT STORES? YEAR-OVER-YEAR SALES GROWTH IN SMALL FORMAT STORES, DOUBLED, OR MORE, THAN THAT OF LARGE SUPERMARKETS AND HYPERMARKETS. SMALL FORMAT TRADITIONAL DRUG CONVENIENCE Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

OF CATEGORY SALES COME FROM TRADITIONAL STORES IN DEVELOPING COUNTRIES 45% OF CATEGORY SALES COME FROM TRADITIONAL STORES Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

WHAT MOTIVATES GLOBAL CONSUMERS TO SWITCH STORES THE MOST? QUALITY PRICE CONVENIENCE SPECIAL PROMOTIONS Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

WHAT MOTIVATES GLOBAL CONSUMERS TO SWITCH STORES THE MOST? PRICE 68% SAY PRICE, FOLLOWED BY QUALITY (55%) ARE STORE-SWITCHING MOTIVATORS. Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014

PRICE AND QUALITY ARE MOST IMPORTANT GROCERY STORE SWITCHING DRIVERS PERCENT WHO SAY ATTRIBUTE DRIVES THEM TO SWITCH STORES Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014 Source: Nielsen Global Survey of E-commerce, Q1 2014

What is your level of willingness to utilize the following digital options for your grocery shopping if they are available? Base : All Respondents (n: 517)

preferred order placement method for ONLINE GROCERY shopping preferred order placement method for ONLINE GROCERY shopping? AME average Base : All Respondents willing to utilize digital option for grocery shopping (n: 2139)

Which of the following food, grocery or personal care items do you intend to buy ONLINE in the next 6 months? Base : All Respondents (n: 517)

Which of the following food, grocery or personal care items do you intend to buy ONLINE in the next 6 months? Base : All Respondents (n: 517)

Which of the following food, grocery or personal care items do you intend to buy ONLINE in the next 6 months? Base : All Respondents (n: 517)

AROUND THE WORLD Source: Nielsen Global E-Commerce and The New Retail Survey, Q3 2014