THE DIGITAL DISCONNECT An Assessment of Where We Are and Where We Need to go in “Digital Coupons”

Your moderator: Mark heckman, principal of mhc…. Over 25 years of supermarket retailing experience as VP of Marketing at Marsh, Randalls-Tom Thumb and Food Industry Service Providers such as VRMS, Sorensen Research, and MARC Advertising

Barriers to Digital Couponing Lack of Technology Integration (In-store) –Load to Account –QR Codes –Locational Targeting Competing Value Propositions –Brands and Retailer still Vested in Paper Coupons and Traditional Promotions Dearth of Digital Content –Too few Digital Offers –Low Household Penetration Categories

Recent Developments More Retailers Adopting Digital Load to Account Technology More and Better Offers Populate Offer Banks Retailers Beginning to Integrate Digital Promotions into the Mainstream of their Marketing Mix

Let’s Define Some Terms Print at Home (PAH), Digital FSI, NET: – Coupons delivered digitally to the consumer on website for selection, but are printed on home printers to bring to store. Load to Card, Save2Card, Load to Account, Direct to Card, eWallet, eCoupon: –Coupons that are delivered digitally to the consumer on website or mobile device that are either selected or directly placed in the shopper’s account. These digital coupons are activated when shopper purchases the associated item and identifies themselves as the account holder at the point of sale. Clips: A digital coupon that is either loaded to card or printed at home

Where We Are Today* Approximately 1.35 billion PAH offers were printed in 2012 with 137 million redemptions Average redemption rates for PAH campaigns ranged broadly dependent upon category, trade activity, and face- value, but the average redemption rate was over 17%. *Inmar Shopper Behavior Study, April 2013

Where We Are Today* Approximately 27.5 million eCoupons redeemed through “open” digital media from 250 million digital “clips” Average redemption rate of eCoupons was 11.20% with an average face value of $1.23 Both PAH and eCoupons are increasing their presence at very strong rate year over year. *Inmar Shopper Behavior Study, April 2013

Retailer Support Active vs. Passive

Daytona Themed Event with Digital Coupons

Kroger Cart Buster – Select a Digital Coupon Just for You

ShopRite Targeted Clipped Digital Coupons

Commissary’s Provided In-store Support

INTRODUCTION TO THE PANEL

Today’s Panel Cheryl Black, COO, YOU Technology

Today’s Panel Brian Brinkley, CTO

John Caron, VP Marketing

Today’s Panel Bill Catania, VP Digital Solutions

Today’s Panel Henri Lellouche: GM Smartsource iGroup

Our Discussion Are We Truly Entering the Age of Dominant Digital Content? What Remain the Biggest Inhibitors to Digital Couponing Growth? Going Forward, How Do Our Panelist See the Future of the Coexistence of Paper and Digital? As Coupon Professionals, How Will our Skill Sets and Professional Activities Change with the Emergence of Digital?