Shoppers in stores

1. Shoppers in stores What wins their wallets?

2. Presentation speakers Nikhil SharmaVP, Consumer & Shopper Analytics, Nielsen Daniel JenskiAssociate Director of Consumer Analytics, Mondelēz International #Consumer360

3. Shopper quiz 96% • % of CPG sales that occur in brick & mortar stores? 67% • % of brand decisions that are made in-store? #Consumer360

4. Shopping is becoming more complex EXPONENTIALGROWTH of product advertisement 24,000 NEW retail stores since 2009 50% INCREASE in SKUs in 7 years #Consumer360 4

5. All marketers WANT TO DRIVE GROWTH BY optimally serving the shopper However, the manufacturer and retailers mindset can be different EXCESSIVE CHANGE MAY DISRUPT SHOPPERS DRIVE GROWTH RETAILER More Shoppers More Trips More Items SHOPPERS GOAL Optimally serve shoppers Grow sales Maximize profitability DRIVE GROWTH MORE INNOVATION TO ENGAGE & RETAIN SHOPPERS MANUFACTURER #Consumer360

6. TECHNOLOGY CAN help drive greater ALIGNMENT IN SHOPPER MARKETING MEASURED CHANGE RETAILER GOAL Optimally serve shoppers Grow sales Maximize profitability RAPID CHANGE TECHNOLOGY = a KEY enabler! MANUFACTURER #Consumer360

7. In fact, Technology is already being used extensively in shopper marketing geo-location based advertising PLACE virtual store technology, shelf imaging PURCHASE prior lists & recommendation servicesPLAN smartphone payment methods digital ethnography Path to Purchase BUY DEMAND ENGAGE social advertising CONSUME technology enabled consumption tracking EVALUATE social listening

8. today we will demonstrate how two technologies are helping to win in-store 1 2 Image Recognition Virtual Store What is it used for? Easier Testing Better Execution “Understand what to do in-store” “Ensure it actually gets done” What benefit does it drive? • Shelf layout • Pack and Price Architecture • Merchandising • Compliance • Availability • Visibility #Consumer360

9. 1 Virtual Store Easier Testing “Understand what to do in-store” #Consumer360

10. Virtual store technology Online platform to measure in-store shopping behavior Consumers can navigate virtually Can customize any retail environment from big box to small format – traditional to Modern trade Can help optimize: price, promotion, assortment packaging, new product impact and more! Virtual Store

11. mondelēz wanted to leverage virtual store testing The multipack business for Biscuits had been decreasing for years while the multipack business for Salty Snacks had been growing There were many hypotheses about the cause and the possible solutions: Alternative pricing & promotion strategies? New Pack counts or varieties? • Alternative shelf layout? How do we test these ideas in an efficient & cost-effective way without alienating shoppers?

12. Virtual store gives mondelēz a ‘safe’ testing environment • Study Design • 21 shelf sets • 400 monadic (stand-alone) reads • Screened for primary grocery shoppers 18-65 who purchased cookies, crackers or salty snacks in the last 6 months • MDLZ Multi-pack buyers • MDLZ Multi-pack non-buyers • Salty Snack multi-pack buyers • Moms/Dads w/kids ages 2-5, 6-12, 13-17 • Included post-survey questionnaire Virtual Store Demo #Consumer360

13. 1 We were able to test various scenarios…

14. … and quantify the expected impact Reduce unit count in an existing multi-pack product Mondelez would lose 2.6 Million Unitsto competing brands! Our Retail Partner would sell 1.4 Million fewer Units of the category! • Brand Impact • Category Impact We tested 27such ideas … in only 12 weeks!

15. mondelēz developed tangible ideas to reverse the downward business trend • Larger sizes can work • on bottom shelf, but smaller sizes tend to perform better at eye level • Do not include constant consumables in a multipack shelf Don’t be too aggressive withnew size promo Maintain key flavors in line Considerdownsizecarefully Launch new sizes

16. We improved our retail partnerships & realized several other benefits Quicker Relative To In-Market Testing No Need To Manufacture Test Products No Inconvenience To Our Retail Partners Cheaper Relative To In-Market Testing Able To Test Results In Mass and Grocery Formats Tested More Ideas Compared To In-Market Testing #Consumer360

17. The Virtual store technology is a powerful solution to drive impact at retail The Benefits: Confidential and secure Does not disrupt retailers Comprehensive and powerful management tool Less expensive and faster Flexible Global solution #Consumer360

18. 2 Image Recognition Better Execution “Ensure it actually gets done” #Consumer360

19. Execution at retail is critically important As an industry, we invest significantly here… … but often fall short here EXECUTION INNOVATION MARKETING #Consumer360

20. What is really happening in store? ? “What you think is happening” vs. “What is actually happening” #Consumer360

21. Image recognition technology Smartphone based technology to help improve in-store execution Revolutionary technology that applies automatic image recognition to the tracking of in-store implementations Transforms digital photographs taken at the point of sale into planograms Allows you to track and evaluate the status of planogram compliance & key KPI’s such as ‘share-of-shelf’ Shelf Imaging

22. Shelf imaging allows you to fix issues at retail in a nearly real time manner Picture of Actual Shelf Planogram of Actual Shelf “How Well Are We Doing?” “What Should We Fix?” Real Agreed Differences

23. A health & beauty manufacturer used image recognition to execute better at retail BUT Had significant opportunities to improve how they tracked & executed in-store Long history of being a leading innovator in the skin care category Current methods of tracking execution were sub-optimal Manually collected self reported data + Time consuming consolidation process = Long timeframe for shelf changes

24. Execution improved significantly resulting in substantially lower opportunity cost Food For Thought… Stores Meeting Minimum ‘Share of Shelf’ Requirement (Indexed to 100) February • What are your sales from promotions? • How well are your promotions executed at retail? • What could an 11% increase in promotional sales mean for your business? 35 For a brand with nearly $45MM in sales from promotions… 39 May $4.5 Million Incremental Sales Opportunity! +11% Improvement in Execution!

25. Image recognition technology can deliver other substantial benefits Granular Data Quick Turnaround Lower ‘opportunity cost’ for retailers High Accuracy Improved shopper satisfaction More effective sales force deployment

26. Technology can drive tangible outcomes and more effective shopper marketing! 1 2 Image Recognition Virtual Store Easier Testing Better Execution “Understand what to do in-store” “Ensure it actually gets done” #Consumer360

27. in-store technologies can provide a myriad of benefits Scalability Deploy at scale compared to some traditional methods Cycle Time Significantly improve ‘time to market’ Privacy Offer privacy against competitors Shopper Disruption Result in limited to no disruption to the shopper #Consumer360

28. An issue-focused approach remains key to appropriate use of technology Clearly identify the issue you’re looking to solve Set clear objectives/ measures of success Think through various approaches and tools Determine whether and what part technology can play in the full solution #Consumer360