1. © Kantar Retail 2015 Strategies to Drive Competitive Advantage REconfigure REtail

2. © Kantar Retail 2015 2 ‒ The Disruptive Retail Landscape ‒ Overview of REconfigure REtail ‒ Open Q&A Agenda

3. © Kantar Retail 2015 3 Disruption Abounds

4. © Kantar Retail 2015 4 ‒ Omni-channel ‒ Demanding ‒ Social & Connected ‒ Convenience-oriented

5. © Kantar Retail 2015 5 Retailer Rationalization Accelerates Now shopping fewer than 10 retailers a month Source: Kantar Retail ShopperScape ®, January–September 2007, 2013, and 2014 *Inclusive of visits to stores and online shopping Web sites 2014 2013 2007 12.4 5.8 10.7 9.7 5.0 4.6 Green: Total Retailer Portfolio; all retailers shopped in any given month Yellow: Core Retailer Portfolio; retailers shopped every month, at least once a month, on an ongoing basis Average Number of Retailers in Shoppers’ Portfolio*

6. © Kantar Retail 2015 6 New Definitions of Value Are Emerging Sources: http://www.lowesinnovationlabs.com/innovation-holoroom/, http://press.burberry.com/regentstreet/#/index, and http://www.walgreens.com/topic/pharmacy/healthcare-clinic.jsphttp://www.lowesinnovationlabs.com/innovation-holoroom/http://press.burberry.com/regentstreet/#/indexhttp://www.walgreens.com/topic/pharmacy/healthcare-clinic.jsp

7. © Kantar Retail 2015 7 Growth is Coming from a Diversity of Formats

8. © Kantar Retail 2015 8 Online is a major threat Amazon is winning and attracting more new shoppers Source: Kantar Retail ShopperScape ®, August 2007–August 2014 * Inclusive of visits to stores/websites and use of catalogs Past 4-Week Shoppers, by Retailers* (among all primary household shoppers) 66% 59% 42% 25% 17% 69% 57% 47% 27% 70% 50% 47% 31%

9. © Kantar Retail 2015 REconfigure REtail Strategies to drive competitive advantage 9

10. © Kantar Retail 2015 10 ‒ Disruption abounds ‒ Competitive advantage has shifted ‒ As digital disintermediates retail, only those retailers and suppliers who REconfigure REtail strategies, and REengage shoppers, REimagine value, REinvent formats, and REtool commerce, will thrive. REconfigure REtail Strategies to drive competitive advantage

11. © Kantar Retail 2015 11 ‒ Disruptive technologies are fragmenting shoppers’ relationships with retailers and brands. ‒ Competition for shopper mindshare is chaotic and intensifying ‒ REengaging shoppers means driving personalization without sacrificing scalable operations. ‒ Retailers and suppliers must develop a robust understanding of their targeted shoppers across all touch points to drive distinctive offers, curated shopper experiences, and contextual engagement. Pillar I: REengage Shoppers

12. © Kantar Retail 2015 12 ‒ Track the OmniShopper path across the entire ecosystem of touchpoints. ‒ Understand the blurring line between “message” and “medium.” ‒ Develop sophisticated analytics capabilities to understand shopper attributes and motivations. ‒ Develop suites of analytic tools to cluster and predict shopper response to individual messages and holistic campaigns. ‒ Leverage the intersections of multiple data assets and capabilities to foster deeper shopper understanding. To Achieve Continuous Engagement, Successful Retailers and Suppliers will…

13. © Kantar Retail 2015 13 ‒ As the mechanics of value become more personal, dynamic, contextual, and volatile, retailers and suppliers need to REimagine Value ‒ Rather than a definition based almost solely on price, shopper value in the future will be defined by those who master the artful science of REimagining value by also delivering quality and service ‒ Retailers and suppliers must invest in capabilities that deliver more personalized pricing, packaging, and assortment, and focus on delivering superior shopper experiences Pillar II: REimagine Value

14. © Kantar Retail 2015 14 To Deliver New Value, Successful Retailers and Suppliers Will… ‒ Turn predominantly price-based value discussions into strategic dialogue on larger, more transparent notions of shopper value. ‒ Master the mechanics of a more algorithmic and dynamic pricing environment ‒ Invest in capabilities that deliver more personalized pricing, packaging, and assortment ‒ Leverage more holistic notions of value ‒ Focus on delivering superior shopper experiences across the path.

15. © Kantar Retail 2015 15 ‒ The physical and virtual space in which the retailer engages the shopper is in flux. ‒ We are witness to a tremendous reallocation of capital deployment, a revenge of physical retail space, and a complete reboot of how store formats serve a more convenience-oriented, efficiency-motivated, and experience- craving shopper. ‒ Categories that were once bought in stores are now often not, and the nature of sales and service in-store has been permanently altered. ‒ The confluence of these changes demands a baseline REinvention of store formats and their purpose. Pillar III: REinvent Format

16. © Kantar Retail 2015 16 To REinvent Format, Successful Retailers and Suppliers Will… ‒ Blend digital and brick & mortar models ‒ Master the dynamics of both in-store and online merchandising. ‒ Repurpose the store and how it will deliver reimagined value ‒ Use mobile as a location-based contextualized engagement tool ‒ REinvent physical spaces as true “community stores.”

17. © Kantar Retail 2015 17 ‒ Shoppers demand a seamless omni- channel experience, and most retailers and suppliers are underprepared to deliver truly multichannel commerce. ‒ There is enormous pressure at the intersection of retailer and supplier commerce models that is based on item at a price margins. ‒ Suppliers must fight to maintain mindshare in this more holistic profit equation. ‒ Only those retailers and suppliers who REtool their commerce models will thrive Pillar IV: REtool Commerce

18. © Kantar Retail 2015 18 To REtool Commerce Models, Successful Retailers and Suppliers will… ‒ Revamp financial, brand, and operational models ‒ Build new connections to shoppers ‒ Relentlessly innovate core processes ‒ Determine the next generation of integrated retailer/supplier business planning ‒ Reinvent the infrastructure of distribution

19. © Kantar Retail 2015 www.kantarretailiq.com © Kantar Retail 2015 19

20. © Kantar Retail 2015 20 Follow REconfigure REtail on Social Channels! Follow us on LinkedIn Follow us on Twitter Join WeChat Updates on KRiQ.com #REconfigureREtail

21. © Kantar Retail 2015 21 Kantar Retail Subscription Webinar Series *US market focused. We conduct timely and actionable webinars led by Kantar Retail Knowledge Experts providing relevant market insight and actionable recommendations. Slides are available for download and easy-to-share within your organization. Webinar Subscription Packages: ‒ Signature Series ‒ Digital Retailing Series ‒ Shopper Series* ‒ Channel Series* (Food, Drug, Mass, Club, Value Discounter) ‒ Home Improvement* ‒ Apparel* For more information visit us online http://www.kantarretailiq.com/ http://www.kantarretailiq.com/ or email maura.howley@kantarretail.com.maura.howley@kantarretail.com

22. © Kantar Retail 2015 22 Coming soon: An all new REimagined Kantar Retail iQ! All new design More intuitive navigation Improved Report Builder Mobile-friendly Experience it for yourself on May 29!

23. © Kantar Retail 2015 2015 Mid Year Forum REconfigure Your REtail Planning June 3–4, 2015: Boston | June 17–18, 2015: Chicago Join Kantar Retail’s thought leaders for a two-day event aimed at ensuring your 2016 plans are strategically vital, predictively accurate, and closely aligned against your most important customers.

24. © Kantar Retail 2015 24 Q&A

25. © Kantar Retail 2015 For further information please refer to www.kantarretailiq.com Contact: Andrew Stockwell, Chief Research Officer T:+1 (617) 912 2867 M:+1 (617) 999 2502 andrew.stockwell@kantarretail.com kantarretail #REconfigureREtail