Mobile Marketing

Mobile Marketing Will Shuckburgh, Business Development Director, Nectar 3rd March 2011

Agenda • Nectar • Why mobile, why now? • Customer Insight • The Nectar App • Results • Some things we have learned Private and confidential

Groupe Aeroplan is the global leader in loyalty management • Global leader in loyalty • C$2bn turnover • Over 3,000 employees • Presence in over 16 countries in North America, Europe, Middle East and Asia • Loyalty Marketing Services Provider • Presence in North America, EMEA and Asia Pacific • Miles-based coalition in Canada • 5 million members • 75 earn partners and 188 burn partners • Points-based coalition in UK and Italy • 12m 12-week active UK households • 14 earn partners and 30 burn partners • Nectar Italia launched March 2010 • Nectar Chile launched August 2010 • Customer-centric retailing business • Tools and SKU analytics platform • 100+ Consumer Packaged Goods partners • Present in 7 markets in the Middle East • 130 partners • HSBC principal partner and 40% shareholder Private and confidential

Nectar is the UK’s largest loyalty programme with over 50% of UK households Points Issuing Partners Collectors Rewards Partners 15.1M Households active in the last 12 months Nectar Business Database Plus over 450 online retailers on eStores including: Source: Nectar Stats, January 2011 Private and confidential

In the beginning there was paper… • Very, very personalised paper • 5m+ unique offer combinations in a Points Update Mailing • Award winning trigger campaigns: Home Mover’s Kit etc Private and confidential

And then there was digital... • www.nectar.com receives circa 2m unique visitors per month • Most visited areas: eStores, offers, account management, rewards • C. 1million collectors have transacted through Nectar eStores across Nectar and Nectar Business • 45% of registrations are online Private and confidential

We developed a paper-less offer engine Private and confidential

Mobile – Why now? • Mobile phone internet access developments: • Screen size and clarity • Flat rate monthly data charge • Mobile network speed • Demise of walled gardens • By 2013, more people will access the web from a mobile than a PC (Gartner) • Member appetite – Facebook comments + collector survey • Critical mass of smartphones Private and confidential

“Nectar Everywhere” - Customer Value Proposition Value ₤ NectarEverywhere Inspiration ♥ Convenience Data will drive relevance in all three areas Private and confidential

Key Market Research findings • Nectar smartphone survey, June 2010, 201,258 respondents • 36% own smartphone • 58% have had a smartphone for less than 1 year • 59% find out about new apps via App store or friends • Distribution of the best known types • iPhone • Blackberry • Android • Android is expected to overtake iPhone in 2011 Private and confidential

Over 40% of all smartphone users download an app at least once a month How often, on average, do you download apps to your phone? All smartphone users. 40% n=73,897 Private and confidential

iPhone users download apps more often than other smartphone users How often, on average, do you download apps to your phone? iPhone users 80% n=20,005 Private and confidential

Customers told us that they want… Convenience and value • Access to Nectar point offers on the go and in their own time • To see their points balance and manage their account 24/7 • Store finders to easily locate where they can collect and spend points • To receive communications when new offers are available through the app (70% are happy to receive alerts from Nectar) • Attainable and worthwhile offers that are updated frequently (weekly or monthly) Nectar iPhone App survey, June 2010, 201,258 accounts participated in the survey Private and confidential

Nectar app functionality Points balance One-to-one bonus points offers Store locator Programme information Private and confidential

The business model • Mobile Offers • One-to-one offers wherever members go • No paper or point of sale interaction • Very cost efficient channel • Combines our Insight and Currency • Clear monetisation model • App is free for customers • CPG’s and partners charged for offers • Bonus Points revenue Private and confidential

Opting in Private and confidential

We’ve also built Sainsbury’s iPhone app One-to-one bonus points offers Sainsbury’s news Store locator In store offers Private and confidential

With a distinctive Sainsbury’s look and feel Private and confidential

iPhone app launch results • Nectar and Sainsbury’s apps launched on 16th August 2010 • 0.5M downloads of the Nectar app so far • Over half a million user sessions • Nectar app #3 in the UK free app chart within four days Private and confidential

Collectors love our new app Private and confidential

App reaction – our partners “The Sainsbury’s App is more than meeting expectations in terms of customer demand and we are excited that, working together with Groupe Aeroplan, our app will evolve through a solid development pipeline” • “I really like the site locator and the personalised offers. So much easier, friendly and accessible than to have to use a website when you are ‘on the go’ as our customers are!” Private and confidential

Initial results for partners have been outstanding • Results to date of targeted offers for Nectar’s 3 biggest retail partners: • 23%-57% offer opt-in • 4% -48% of targeted customers completing the right purchase • £Multi-million incremental spend • High ROI, which will guide channel pricing • Collectors responding to the offers have benefitted from hundreds of thousands of pounds worth of rewards Private and confidential

Very good CPG results as well Private and confidential

Mobile – where next? • “Nectar Everywhere” strategy: right offer, right people, right place, right time • Mobile website • Roadmap of new functionality for the apps • Further platforms • Integration of website and mobile data into our warehouse Private and confidential

Key Considerations • Prioritise your app platforms by download volumes & demographic fit • Engage staff and customers early in the design cycle, limited ability to trial • How to drive repeat usage? • Does your web analytics tool allow you to track the interactions through your app? • Customers expect new releases and features – set out a roadmap • Feedback is instant through the app store and other social media – be ready to respond • You have to ask for good reviews - in app prompting • Many retail environments have limited or no mobile coverage – make it work off line • Many retail scanners won’t scan a barcode image on a mobile phone – remember that a bad customer experience can damage overall brand perception • Strike up a relationship with Apple – proves very handy at times Private and confidential

Thank you Private and confidential

Mobile Marketing