Shopper Marketing News……... 3-8

November 2015 Shrinking, Flexible & Focused: The Future Of Urban Retail Cover Story…………………….…...… 2 Shopper Marketing News……... 3-8 Consumer & Shopper Trends… 9-16 Customer News………………….…. 17-22 Digital News………………………..... 23-27 Best In Class…..……………........... 28-29 Custom Content……………..........

Shopper Marketing News November 2015 Shrinking, Flexible & Focused: The Future Of Urban Retail • October 27, 2015 (Marketing CPG) • More and more retailers are recognizing that a one-size-fits-all approach does not work the same across developed environments. Urban shoppers will have vastly different needs than suburban shoppers and vice versa. Just like individual shoppers, not all stores are created equal and not all geographic locations can receive the same treatment. • Target and Walmart have both made experimenting with smaller-format stores a priority. Walmart is tackling this trend by opening almost 25 smaller stores, many under its Neighborhood Market banner. Target is expanding its number of small-format stores and rebranding its existing smaller stores, CityTarget and TargetExpress, as Targets. Focus your offering: Retailers, like Home Depot, that are already niche in their offering could greatly benefit by utilizing smaller formats and narrowing their focus based on location. CPG brands must focus on new, smaller or single-serve SKUs that play to these formats by partnering with retailers to ensure the brand’s product matches the needs of shoppers and the format. Create an experience: CPG brands can win by creating in-store experiences that immerse the shopper at the retail location. This is a surefire way to demonstrate new ways of fitting your brand’s products into their lives. Brands should also educate retail associates on how their product can be used as part of a larger experience. It helps to have an advocate for your brand at a crucial junction in the purchase journey. Don’t forget e-tailers: Online retailers like Amazon can bridge the online and offline experience by creating spaces to be used as a logistical hub for same-day delivery or pick-up. This opens doors for CPG brands to provide an engaging digital experience tailored to a shopper’s location. Where and how we live is imperative for retailers to think about while setting-up shop. However, the question that CPG retailers and brands need to focus on is not the raw data of where people are moving to, but who is living where and, most importantly, how their behavior varies. 02

Shopper Marketing News November 2015 NPD Highlights The When & Where of Snacking October 27, 2015 (Convenience Store News) Consumers' tastes for sweet and savory snacks is determined by the time of day, while better-for-you snack consumption can be predicted more by place, according to The NPD Group's Snacking in America report. An average day starts out healthy with better-for-you snacks (BFY) that are typically consumed throughout the day depending on location (i.e., carried from home and eaten at school, work or in the car), while savory snack consumption picks up at mid-day, and the desire for sweet snacks is stronger in the evening, NPD found. "All snack foods are not treated equally by consumers depending on the time of day," stated Darren Seifer, food and beverage industry analyst for NPD. "Marketers of snack food products need to communicate with consumers based on daypart, while better-for-you snack marketers need to be more focused on location, as in-home vs. away from home." The seasons also have an effect on snack food preferences. Sweet snack consumption spikes in November when consumers are eating their treats from Halloween; better-for-you snacking decreases in November and December; and savory snacking reaches its peak in December and January. 03

Shopper Marketing News November 2015 Supermarkets Need To Cater More To Guys October 21, 2015 (Grocery Stories) A research study earlier this year revealed that men make up 43 percent of primary grocery shoppers, and they now visit the store as many times each month as women do. This has been the upward trend for a decade. “You can no longer ignore the male shopper,” said one of the study’s authors, Steve Bryant, Director of Food and Beverage at MLSGROUP. The challenge is figuring out how to turn the grocery store into more of a retail Man Cave without scaring away female shoppers, especially if they have small children in tow. Let’s begin by identifying the unique traits of the male grocery shopper. First, they don’t carry a shopping list and frankly don’t need one. Their list is brief and memorized if they are single and only shopping for guy stuff. If they are married and have been corralled into doing the shopping for the entire family – wife, urchins and pets – they still don’t bring a list. They are used to forgetting things and making a return trip to the store with a list that has been forced on them. Men have mastered the “in-and-out quickly” technique of grocery shopping. No browsing for what’s new. There’s nothing new. Men know exactly what they want and just grab stuff without breaking stride. Men rarely shop with small children along for quality time with Dad. It slows him down and he hates questions. What’s more, kids don’t belong on the mandatory visit to the Beer Cave and they can’t belly up to those new wine or beer bars that some truly inspired supermarkets are installing to make shopping more enjoyable. On those forced occasions that children tag along for the trip, men make it a learning opportunity by teaching them new vocabulary words like growler and keg. In recent years, some innovative grocers have created a Man Aisle in their stores. Guys can quickly head to this portion of the store to buy shaving cream, snacks, razors, beer, deodorant, snacks, barbecue sauce and beer. It’s convenient and takes only a few minutes to load up on the essentials of living. The other author of the research study, Laurie Demeritt, President of The Hartman Group, said it best: “To engage with male shoppers, brands and retailers should offer tools and services to help them quickly and effortlessly locate and buy items.” 04

Shopper Marketing News November 2015 How Food Brands Can Win Over Female Shoppers October 12, 2015 (Marketing CPG) According to our recent survey, the number one meal-time challenge faced by women is boredom. Yes, boredom. Not cost or lack of time. Those are lower on the list. Women are bored and their families are bored with their meals. The same survey uncovered some surprising insights about food including snacking, social media and influences on food purchases. These insights reveal opportunities for brands to step up their efforts to engage and win with female shoppers. Boredom (50%) is the #1 meal-time challenge faced by women, followed by varying tastes among family members (43%); cost of ingredients (42%) and lack of ideas for cooking healthy, good-tasting food (41%); conflicting schedules (30%); and lack of meal prep time (27%). Food Opportunities Revealed: Women are willing to make the time to prepare good food, but need tastier recipes (especially for healthy food), more ideas, and suggestions for pleasing different palates in one meal as lack of appeal is a bigger issue than lack of time. Brands can provide customers with recipes in a variety of formats, including video, as well as platforms, including Pinterest. A full 78% of respondents said that they visited food brand’s social pages in order to find recipes and tips. Sample It! Women said that a positive experience with a sample (50%) is most likely to prompt purchase. Brands should consider targeted sampling in order to get tasty samples into the hands of bored consumers “looking for food inspiration." Coupons also inspire sampling. In fact, 83% of surveyed respondents said that they visit food brand social pages in order to get access to coupons and discounts. Social Media: Food is a very popular topic on social: a large majority (74%) of women post or share food-related content on social media. Recipes (61%) are the most heavily shared type of content. Women visit #1 Pinterest and #2 Facebook for meal inspiration i.e., recipe ideas and discovery. Also worth noting is that there are many opportunities for brands to distinguish themselves on social: only 10% of women feel that any particular brand is doing a better job of engaging them than any other. With food continuing to be a popular topic on social for women of all ages, food marketers can distinguish themselves on social by actively engaging, encouraging more sharing and providing more ideas for them to chew on. 05

Shopper Marketing News November 2015 Millennials Want Loyalty Programs to Be Fun, Rewarding October 20, 2015 (Progressive Grocer) When it comes to loyalty marketing and customer rewards programs, Millennials just want to have fun, so finds results of a nationwide survey of 1,000 U.S. consumers by Cincinnati-based Colloquy, a leading provider of loyalty marketing research, publishing and education. • When asked to define the word that best describes their participation in a customer rewards program, "fun" was deemed to be most important for 34 percent of 18- to 34-year-old Millennials. By comparison, 26 percent of the general population (18 to 65 years and over) chose the word "fun," while 66 percent of the general population cited “economical” as best describing their loyalty program participation versus 56 percent of Millennials • The fun-versus-economical results are just two highlights from a larger set of survey findings that tell marketers that Millennials are a different breed when it comes to their engagement with a brand via a rewards program. • Among other survey results that Colloquy says set Millennials apart when it comes to loyalty programs: • 63 percent of Millennials said they had joined a program within the past year, versus 55 percent of the general population, a 13 percent difference. • 25 percent of Millennials said they joined a program in the past year because it offered access to members-only events, versus 16 percent of the general population, a 36 percent difference. • 40 percent of Millennials said they joined a program for access to members-only sales, products and services, versus 33 percent of the general population, an 18 percent difference. • 63 percent of Millennials said it’s important that their loyalty program participation supports lifestyle preferences such as wellness programs, sustainability efforts or a charity, versus 53 percent of Gen Xers (35-50) and 46 percent of Baby Boomers (51 and over), differences of 16 percent and 27 percent, respectively. • “Millennials aren’t simply you in a time warp," said Colloquy Research Director Jeff Berry. “Yes, you were once their age, but that doesn’t mean you understand their needs. Millennials have dramatically different ideas about consumerism and loyalty than other demographics,” he said. • Berry’s tip for loyalty marketers: “Prioritize experiences over economic gains, because millennials love to try new things. And gamify everything. 06

Shopper Marketing News November 2015 Listen For Your Brand's Authentic Role October 14, 2015 (Marketing CPG) Despite time-shifted TV viewing and digital ad blocking most advertisers continue to hammer on the proverbial front door to pitch their wares. The premium is now placed on true creativity. Just consider the social first example set by these three CPG brands: Dove's Real Beauty: Dove showed us way back in 2004 how a health and beauty brand could trigger a conversation among millions about what real beauty and self-esteem truly is. Dove took a backseat to the issue, and went to the head of the class in the hearts of its target. Always #LikeAGirl : This leader showed us how to take a product promise — confidence — and turn it toward an inquiry about confidence when girls go through puberty. The Always brand knows that it wins by championing the conversation, not grabbing for the headline. Honey Maid This Is Wholesome: How does a graham cracker get noticed and become relevant again? By going "upstream" and getting us to consider a modern perspective of just what wholesome, in the context of family, really means. What are the clear lessons we can take away? Think social first. Are you listening for the conversations your brand can champion? Don't ditch your product-centric equity. Look to link it to a bigger, more engaging issue. Drama requires conflict. There is some form of tension at the heart of each of the conversations that my example brands champion. Without it, there's nothing to talk about. Back off. Done right, your brand will have a natural entry point in a social conversation and it’s not at the opening curtain. 07

Shopper Marketing News November 2015 Overcome Shopper Marketing Challenges October 19, 2015 (Marketing CPG) At the BAA (Brand Activation Association) conference Aaron Newhouse, director of shopper marketing at ACH Food Companies, discussing how challenger brands cut through the clutter with retailers to compete with the big dogs. • Newhouse noted that, many times, innovation comes from the brands that have the smaller budgets, so they have to be creative in their marketing approach, even though they face similar challenges with shopper marketing. The top challenges addressed were: • Retailer interaction and access • Brand awareness • Engagement with your customers • Retailer Access: It can be tough for smaller brands to get in front of big retailers. But those same brands may have an advantage when it comes to working with smaller, but powerful, retailers because larger brands can’t afford to pay close attention to them. The way in is to offer added value. Data is powerful and available. If CPG brands bring new information to their retail partners, this can be their opportunity. Brands can use their own customer data to deliver new insights to the stores; preferably those insights are from the retailers’ own shoppers. • Brand Awareness: Shopper marketers strive to do a better job of driving awareness to their brand before the consumer gets to the store. Advertising noise becomes a challenge while in-store because you do not want to disrupt the shopper experience. Something important to consider when deciding where to spend your shopper marketing media dollars; 71% of consumers said they are more likely to make a purchase on a retail site or in-store based on social media referrals. Social media is a powerful way to spark awareness about brands. • Engagement: There is some amazing technology being developed to better engage consumers during their shopping trip. Beacon technology, and apps like Ibotta, and ShopKick are all gaining traction because they can deliver relevant messages at the times that matter most. Take that one step further and remember well-executed shopper programs are not only thinking of ways to engage the consumer before and during the trip, but also after. What is your next point of contact with that consumer and how are you nurturing them? • This is a tremendous opportunity for the brands to be category innovators. By capturing and using consumer insights and data in a way that helps you engage your most important consumers, you can not only compete with the big dogs, you can win. 08

Consumer & Shopper Trends November 2015 Cleaning Up in the Snack Aisle • October 16, 2015 (Progressive Grocer) • Makers of healthy clean-label snacks have seen significant sales gains in the segment as shoppers seek out healthier foods to satisfy their appetites. Mintel, whose recent "Free-from Food Trends US 2015" report finds that foods bearing "free-from" claims are increasingly relevant to Americans, with 43 percent of consumers agreeing that free-from foods are healthier than foods without a free-from claim, while another three in five believe the fewer ingredients a product has, the healthier it is (59 percent). • "We have experienced strong financial performance over the past several years," affirms Tom Ennis, CEO of Austin, Texas-based Amplify Snack Brands, maker of SkinnyPop popcorn and Paqui tortilla chips. "Net sales increased … 137.6 percent. We believe our sales growth reflects consumers’ growing preference for [better-for-you] snacks." • "Bare sales have grown dramatically over the past year, with 70 percent year-over-year growth in the grocery and natural channels," notes Dana Ginsburg, director of marketing at Manteca, Calif.-based Bare Snacks. "This growth has been driven by both consumer and retailer demand for better-for-you snacks that truly deliver on taste. More and more consumers are reading labels and looking for simple, real ingredients." • "Performance has been exceptional," says Joe Lupica, marketing manager for the East Haven, Conn.-based SuperSeedz gourmet flavored pumpkin seed line. "We are now one of the fastest-growing snack companies in the category. … [O]ur volume has increased more than 120 percent versus last year." • For many consumers, the decision to eschew certain ingredients is voluntary, others, with celiac disease or severe allergies, are obliged to avoid some items. Australian-owned Freedom Foods and Schiller Park, Ill.-based Enjoy Life Foods cater to both types of shopper. "What sets our brand apart from our competitors is that every batch is tested for gluten, wheat, peanuts, tree nuts, egg, dairy and sesame," notes Freedom Foods CEO Michael Bracka. "All foods are 100 percent natural and totally GMO-free. We work hard to ensure we also deliver foods that are nutritious – using • whole grains and good sources of fiber [and] protein, with low salt and sugar levels." 09

Consumer & Shopper Trends November 2015 Millennials' Top 10 Go-To Food Brands • October 24, 2015 (Engage: Millenials) • A monthly survey of Millennials and teens recently found that 84% of 18-32-year-olds grocery shop, and 56% of those who shop say they do most or all of the grocery shopping for their household. Four in ten tell us they are grocery shopping about once a week, and over 20% are going more than once a week. 31% of teens say they have say in at least half of the groceries that are purchased in their household, and 60% say they have some say—so their favorite brands matter too. • So what did we learn? Millennials are crazy for store brands. "Store brand" or "generic brand" were the top mentioned responses, and three store brands (Walmart/Great Value, Trader Joe's, and Kroger) also made the top ten list. Their reasons for going with store brands is pretty clear: less cost for what they feel is the same quality. One 21-year-old male told us store brands are his favorite because “it is the cheapest and in many cases of equal quality.” A 27-year-old female said, “Store brands are cheaper and taste almost the same,” and a 32-year-old male shopper said he finds store brands better at times than name brands. • Kraft and Kellogg took the number two and three spots on the list respectively, and with both Kellogg and General Mills on the top ten list, we can hypothesize that Millennials are loyal to their cereals. However, "not brand loyal" responses were fourth most-mentioned. Top 10 Brands Store brand Kraft Kellogg Not brand loyal Walmart/Great Value Lay’s/Frito Lay General Mills Trader Joe’s Tyson Kroger Those who are not loyal to brands have a few reasons. Some said that they don't have a favorite food brand because they mostly buy produce or proteins when they grocery shop. Others aren't as aware of brand name as they are of health. A 28-year-old male told us, “I don't really shop based on brand, unless a brand makes terrible or very unhealthy food. Then I say no to that.” When looking at all of the responses, not just the top ten, we see some other interesting trends. Brands that included words like "organic," "nature," "fresh," "garden," and "farm," were not hard to find. In fact, 12% named brands with those words in the name. While not a huge percentage, we can see this verbiage continuing to appeal to them. When we asked which labels make them more likely to buy a product when grocery shopping, 35% said "all natural," and 34% said "organic." 10

Consumer & Shopper Trends November 2015 Gen Z Is Already Misunderstood! • October 15, 2015 (Engage: Teens) • Companies are excited to start talking and selling to Gen Z, who are generally hailed as a realistic, conscientious, hardworking group. While these characterizations are true, Gen Z, like every generation, also displays traits that worry their elders and will challenge marketers afresh. • Buy, Buy Social Media • While Millennials felt compelled to share their lives on social media, Zs are living their lives online. They have friendships that begin (and remain) on Instagram, and they livestream events to feel a part of the crowd. Social media is central to their lives, and as true digital natives, they feel an inherent need to stare at their screens. This has taken on new implications for businesses that must find compelling ways, beyond simply advertising, to inhabit these spaces in order to reach teen consumers. To Zs, if a company doesn’t conduct business on social media, it’s like it doesn’t exist.. • Beyond Words • Millennials are notorious for using abbreviations and emoticons in their communication. Zs aren’t exactly big fans of formal writing either, particularly with the number of emojis, animated gifs, and digital stickers at their disposal. Whereas 4 in 10 Millennials prefer to communicate with pictures rather than words, that number jumps to 53% of Zs. To capture their attention and get their point across, marketers need to adopt the same casual attitude and consider, when relevant, forgoing words when a picture or symbol will convey their meaning and add to the conversation. • Digital Distractions • As the number of devices at their fingertips has grown and the number of apps on those devices continues to multiply, young consumers’ attention is constantly divided. This trend started with Millennials, but Zs are taking it to a new level. They are multitasking wizards, seamlessly shifting their attention from one app to another and even learning to look someone in the eye while texting someone else on their phone. This not only makes it difficult to get and keep their attention, but it also affects their sense of story and humor. Zs have an affinity for incongruity and quirkiness, which, like their constantly shifting focus, keeps things feeling fresh and interesting. Marketing messages must reflect this same unique unexpectedness and provide a wow factor if brands hope to interest today’s kids and teens. 11

Consumer & Shopper Trends November 2015 Millennials Are Driving An $18 Billion Food Revolution • October 13, 2015 (Fortune) • Smolyansky said the future of the food industry is entirely in the hands of smaller companies and that big companies are just not as nimble. Lifeway Foods, the largest U.S. manufacturer of the dairy drink kefir, has annual revenues of about $130 million. • So what is the next big thing? Expect even further fragmentation in the food industry. The panelists said that health is being redefined—it’s not about fat and calories anymore. It’s about supplementing your diet and not making cuts. • “Low-fat was big a few years ago, and that’s gone away now,” said Tracy Massey, president of Mars Chocolate North America. “We need to make sure we label our products and be very transparent about what’s in them. You can’t dictate what people eat, but you can make sure they’re very clear on what they’re putting into their bodies.” A panel of experts at Fortune’s Most Powerful Women summit say millennials are turning the food industry on its head. $18 billion. That’s the market share lost by the top 25 U.S. food and beverage companies in the last five years. So what (or who) is responsible for this radical shift? Millennials with a desire for transparency, said Lifeway Foods CEO Julie Smolyansky. “Millennials are driving a disruption in the food industry,” she said. “I think we’ll see the food industry turned on its head.” But while consumers now have access to more information than ever before, they still need a better understanding of what they’re eating. Denise Morrison, president and CEO of Campbell Soup Co. , said the food industry is responsible for leading the education effort. “I believe consumers have a right to know what’s in their food, how it’s made, and where it’s grown,” she said. “As a company, we’re working on it, and we have a lot more work to do.” Smolyansky said consumers are shopping with their smartphones and have a wealth of information available about the food they buy: “You can now make smarter choices on the spot.” 12

Consumer & Shopper Trends November 2015 How To Be A Successful Food Retail Social Media Manager • October 23, 2015 (Food Marketing Institute) • Located in Terre Haute, Indiana, is one of three Baesler’s Markets, an independent operator with 115 years of history. The social media manager overseeing content on Twitter and Facebook for the store is Kristine O’Hare. We • We first noticed Baesler’s Market’s social media posts during National Family Meals Month, when they shared a Facebook photo of employees raising their oven mitts. • From sharing employees trying wheat grass shots to fun photos of in-store promotions on Twitter, Baesler’s Market is a great example of how you can use social media to share the story of your store’s brand and the unique offerings you have no matter your size. • How did you get started in the food retail industry? • Kristine: I began working in the food retail industry during my junior year of high school. During an internship in college, I developed an interest working in the field of public relations. After completing my internship, I helped my company establish a social media strategy and have continued developing our online presence ever since. • What’s your organization’s social media goal and target audience? • Kristine: Our social media goal is to provide our customers and community with useful information and a medium that they can connect with us beyond their experience in the store. • What’s been your organization’s biggest social media win? • Kristine: Our biggest social media win has been being able to share the products and services that we offer that set us apart. For example, we use social media to showcase our vegan menu, capitalized on the popularity of shark week with related posts, and have friendly service posts to help inform our customers. • What advice do you have for food retail social media managers? • Kristine: I try to utilize our greatest asset as much as possible, which are our employees. By including them it keeps them engaged and excited in the process. Above all, my greatest piece of advice is to have fun and be creative! 13

Consumer & Shopper Trends November 2015 Why Moms Can't Make Quick Health & Wellness Decisions • October 23, 2015 (Engage: Moms) • In a recent nationwide study of 423 moms, we discovered that it takes moms three times longer to choose health-and-wellness products in comparison to products with non-health benefits. Her decision-making process is much slower and more deliberate. She’ll flip over the package, read the details and compare and contrast all her product choices. At times she’ll even ask hard questions from people she trusts. • Uncovering Six Universal Need States on Vulnerability • The study unlocked moms’ innermost fears, anxieties and insecurities about motherhood. Despite the seemingly endless feelings of vulnerability that these moms reported, the study was able to condense their emotional exposure into six “need states,” the complex web of emotional, social, environmental, rational and personal triggers that lead individuals to choosing specific brands. They are: • Dreading the Unknown which primarily centers on whether the choices moms make are the “right” ones • Cutting the Cord, whether it’s leaving children in someone else’s care or sending them off to school, moms experience a high degree of fear and anxiety • Losing the Reins, which is often associated with a child’s unpredictable behavior and leaving moms feeling at a loss and judged • Trying Transitions, those time periods in motherhood that can throw life into chaos, like potty training or starting school • Stressing the “Firsts” are those first-time experiences moms encounter, which raise their fears and anxieties to significant heights • Feeling Their Pain causes extreme angst when mothers feel they are not able to take their child’s pain away • Helping Moms Resolve Their Vulnerabilities • Marketers seeking to build brand loyalty with moms should consider positioning their product through the lens of her vulnerabilities. Marketers who apply this approach would discover what our team discovered in the study—57% say they would be more likely to prefer and purchase products that would resolve her feelings of vulnerability. 14

Consumer & Shopper Trends November 2015 Consumers to Retailers: Tell Us If You Have a Deal October 13, 2015 (eMarketer) Two-thirds of internet users will unsubscribe if retailers spam them Most internet users in the US are happy to hear from retailers—if the message is worth their while, at least. According to September 2015 polling by emarsys, 81% of US internet users ages 18 and older want to hear from retailers sometimes. But most of them only want to know if there’s a sale. Nearly six in 10 internet users wanted to know when there was a sale or promotion going on, and 47% wanted to know if something they had specifically been looking at got marked down. It was also important to internet users to find out if an item was about to disappear from shelves: 26% wanted to know if something was about to sell out. Holidays were also decent reasons for retailers to make contact. One in four internet users said they wanted an alert about upcoming holidays. Hearing from retailers at other times can be a real turn-off. More than eight in 10 internet users said they took action if they felt a retailer was “constantly” spamming them with unwanted promotional emails. Nearly two-thirds said such heavy email activity would make them unsubscribe from all messages from the company. 15

Consumer & Shopper Trends November 2015 Replacing The Acculturation Model With Cross Culturalism • October 1, 2015 (Engage: Hispanics) • In the late 1980s, as the multicultural marketing industry shifted from focusing on language to culture, acculturation became the new paradigm. Acculturation describes the process in which members of one cultural group — namely Hispanic and Asian immigrants — adopt the beliefs and behaviors of another group. • The acculturation model has started to show some cracks in the last 15 years. It was designed to address immigrant-driven diversity. With most Hispanic population growth now coming from native-born Hispanics, the relevance of a framework designed to explain an immigrant experience has increasingly become irrelevant. Societal norms have also changed among ethnic minorities, particularly among Hispanic Millennials, who now evince different attitudes and beliefs towards culture. Namely they are proud of their cultural heritage and look to embrace it vs. assimilating into “mainstream” culture. • Most importantly, acculturation assumes that culture is tightly tied to ethnicity. For example, that Hispanic culture was something only ethnic Hispanics lived within and embraced. • A New Model: Cross-culturalism • What happens when consumers of different ethnic backgrounds, who are not immigrants, not only acculturate, but also embrace multiple cultures, including those outside their ethnic background? This is what we’re starting to see with Millennials and their younger generational cohort Gen Z. The Futures Company has started to define a new model as polyculturalism – the extent to which consumers balance multiple cultures. • Cross-culturalism has been shaping trends in music and food for years (think Kogi tacos and reggaeton). It’s what’s starting to happen with language. I believe that this new model – cross-culturalism – can provide a much more effective framework to culturally understand and segment younger diverse Millennial and Gen Z consumers, and replace acculturation as the dominant strategic framework for multicultural marketing for the next 20 years. 16

Customer News November 2015 Amazon Grows While Wal-Mart Declines October 23, 2015 (Investors Business Daily) Amazon's North American gross merchandise volume has captured 36% of all retail growth this year through September, estimates Wells Fargo analyst Matt Nemer, excluding vehicles, fuel and food/beverages. That's up from 29% in Q4 2014. Growth is accelerating as historically, it’s been in the 20% range. Amazon's continued wallet-share gain, likely as a result of increasing Prime membership count. • About 40% of Amazon.com customers, some 60-80 million, might be Prime members, said an RBC survey last month. In the survey, 75% of Prime members said they bought more from Amazon after joining Prime. About half the Prime members said that they spend $800 or more a year at Amazon, vs. 16% for non-Prime customers. Prime Day alone accounted for 2 percentage points of Amazon's Q3 revenue growth. • This month, the U.S. Census Bureau pegged U.S. retail trade sales growth at 1.7% for September vs. a year earlier. • Some of the largest conventional names are in trouble. No. 1 retailer Wal-Mart this month warned of flat sales in its fiscal year ending March 31 and said EPS next year would fall 6% to 12% — and its stock had its worst one-day drop in a quarter-century. Sears (NASDAQ:SHLD) has closed 235 locations and sold its half interest in another 31, while Macy's (NYSE:M)closed 14 stores this year and will close another 35 to 40 — more than 5% of its total — in early 2016. • Amazon, meanwhile, posted its highest operating profit margins in five years, beating views, Mahaney said in a research note. • "Amazon's continued wallet-share gain, likely as a result of increasing Prime membership count," sparked the strong quarter, Benchmark analyst Daniel Kurnos said in a research report. 17

Customer News November 2015 Walgreens, Rite Aid Unite to Create Drugstore Giant October 27, 2015 (Wall Street Journal) Walgreens Boots Alliance Inc. agreed to buy Rite Aid Corp. for about $9.4 billion, in a move that would create a drugstore giant as companies across the U.S. health-care industry look for ways to bulk up. Including assumed debt, the transaction is valued at $17.2 billion. Rite Aid’s debt totaled $7.4 billion in August. The deal, which would unite two of the country’s three biggest drugstore owners, would be likely to draw scrutiny from antitrust regulators, who could demand divestitures in exchange for their approval. By combining their drugstore networks, which together include roughly 13,000 U.S. stores, Walgreens and Rite Aid, which have both been pinched by drug-price inflation, could reap considerable savings. Rite Aid, based in Camp Hill, Pa., has about 4,600 drugstores in 31 states. Walgreens has roughly 8,200 U.S. stores, while CVS Health Corp. has more than 7,800. After the acquisition closes in the second half of calendar 2016, Walgreens plans to further transform Rite Aid's stores to better meet consumer needs. "Today's announcement is another step in Walgreens Boots Alliance's global development and continues our profitable growth strategy," Walgreens' Executive Vice Chairman and CEO Stefano Pessina said in a statement. Noting that the combination "will further strengthen our commitment to making quality healthcare accessible to more customers and patients," Pessina noted the competing drug chain's "complementary retail pharmacy footprints in the U.S. [will] create an even better network, with more health and wellness solutions available in stores and online." 18

Customer News November 2015 Kroger Tests ‘Smart Shelf’ Technology October 2, 2015 (Cincinnati Enquirer) Kroger is deep into experimenting with “smart shelf” technology at a store in Cold Spring. Company officials are ramping up the project and plan to test several additional applications. Right now, the shelves are programmed to display video images of outsize price tags that can be altered with a few key strokes at a computer. But Kroger says they are eyeing other future capabilities. Kroger’s test is expanding from a few shelves to most of its Cold Spring store. The company is completing the installation 2,200 Edge shelves throughout the center of the supermarket, including most aisles with dry goods. Kroger officials won’t discuss the cost of the technology, which was developed in house. Future applications could include providing on-demand nutritional info when shoppers touch the shelf below an item. Kroger officials can easily see a day when the shelves can talk to shoppers’ smart phones; the retailer’s mobile app already allows customers to create digital shopping lists and pulls relevant coupons. “It has the potential to reinvent brick-and-mortar retailing,” said Brett Bonner, the vice president of Kroger’s research and development. “It brings the info-richness of the Internet to the sight, sounds, smells and touching of in-store shopping.” Kroger officials say they’ve already tested video and no-motion ads that have boosted sales results. During testing in the diaper aisle, the store sold more wet wipes when the shelves flashed “don’t forget baby wipes” reminders. Kroger says it continues to study customers’ response to the technology. While the company has tested audio with the shelves, some customers found it jarring to listen to a sales pitch from a store fixture. 19 The front edge of shelves show digital price tags and have the ability to show ads. (Photo: The Enquirer/Carrie Cochran)

Customer News November 2015 Winn-Dixie Bets On Lower Prices To Draw Shoppers October 28, 2015 (Drug Store News) Southeastern Grocers announced a significant pricing initiative that addresses exactly what customers need: a $40 million investment into permanent lower prices on the products Winn-Dixie customers buy the most. Customers stated in a recent survey that “affordable prices” was the most important requirement from a grocery store, so Winn-Dixie is introducing a New Regular Pricing Program that will permanently reduce the prices on more than 1,500 grocery items at all 518 Winn-Dixie stores. “Research consistently tells us that customers are seeking lower prices, wherever they shop, particularly hardworking families shopping on a budget,” said Ian McLeod, president and CEO of Southeastern Grocers. “We are listening to our customers and helping them reduce the cost of their weekly shop by lowering the prices on over 1,500 of our customers’ favorites.” Prices will be reduced on these items by almost 20%, on average, with savings as high as 53%, the grocer reported. Target Looking To Spruce Up Stores For The Holidays • October 28, 2015 (Drug Store News) • Target is looking to add some visual oomph to its stores just in time for the retailer's busiest shopping days of the year. According to the Minneapolis/St. Paul Business Journal and a job posting on the retailer's website, Target plans to hire 1,400 new employees for the newly created position of “visual merchandising leaders.” According to Target, some of the duties for the new position include: • Maintain and remerchandise Home and Apparel, including filling out of stocks and remerchandising product in empty spaces • Stay current on Target's omnichannel innovations, in order to deliver the right product from the right place for the guest quickly • CEO Brian Cornell said the addition of mannequins at 1,400 stores and the roll-out of new vignettes at hundreds more have led to large sales increases for the products on display. 20

Customer News November 2015 Walmart News Wal-Mart holds the line on free shipping October 29 , 2015 (CNBC) Wal-Mart said that it will maintain its $50 minimum spending threshold for free delivery of online orders, which encourages shoppers who want to avoid shipping fees for less expensive purchases to pick up their items in the stores. That's in contrast to Best Buy, which is offering free shipping to shoppers with no minimum purchase required. To help streamline the in-store pickup process, Wal-Mart is rolling out a new feature on its mobile app that allows customers to check in via smartphone when they arrive to collect their online orders. The technology, which has been tested at its Sam's Club stores, is expected to speed up the pick-up process for time-crunched shoppers. And on Nov. 1, Wal-Mart will add a new capability to its digital wish lists, which enables shoppers to add items by scanning them in-store and makes them searchable for friends and family. Last year, shoppers created 1.5 million wish lists on Walmart.com. In addition to these initiatives, Wal-Mart reiterated its promise to once again be the leader on price this season. That means offering thousands of discounts across categories starting Nov. 1. These deals will extend throughout the holiday season, and the retail giant will continue to match competitors' prices. "We want to have the best prices all season long," said Steve Bratspies, chief merchandise officer at Walmart U.S. "If we need to react, we will react." A&P Brands for Sale October 26, 2015 (Progressive Grocer) As the newly hired intellectual property disposition and sales agent of the Great Atlantic & Pacific Tea Co. (A&P), Hilco Streambank is offering interested buyers all intellectual property associated with the A&P, Pathmark, Waldbaum's, Super Fresh, Food Basics and Best Cellars retail banners, as well as private label product brands like America's Choice, Woodson & James, Green Way, Jane Parker, Via Roma, and Live Better. The bid deadline for the sale, which is being conducted as part of A&P's Chapter 11 bankruptcy protection process, is Nov. 19 at 5:00 p.m. A&P previously operated 297 stores under its various banners throughout New Jersey (103), New York (135), Pennsylvania (34), Connecticut (14), Delaware (nine), and Maryland (two). Many of these locations have been sold in recent auctions to such competing regional operators as Stop & Shop, Acme Markets and Key Food, while unsold stores are slated to close by Thanksgiving. 21

Customer News July 2015 Snyder's-Lance Signs $1.91B Deal for Diamond Foods June 23, 2015 (Supermarket News) Snyder's-Lance Inc. signed an agreement with Diamond Foods Inc. through which it will acquire all of Diamond's outstanding shares through an approximately $1.91-billion cash and stock merger transaction. This includes the assumption of approximately $640 million of debt. • The acquisition expands Snyder's-Lance's better-for-you snacking footprint and increases its existing natural food channel presence. Snyder's-Lance expects the transaction to expand and strengthen its direct-store delivery network in the United States and provide it with a platform for growth in the United Kingdom and across Europe. • "Additionally, we will have an opportunity to grow internationally with Diamond's existing European platform, bringing unique products to consumers in that market," Lee added. "By combining the resources and expertise of Snyder's-Lance and Diamond, we expect to see widening profit margins with additional scale and an expanding line of our better-for-you products. We welcome the Diamond team to the Snyder's-Lance family and look forward to winning together." • The acquisition is expected to close in early 2016, subject to stockholder and regulatory approvals, as well as other customary closing conditions. Diamond Foods President and CEO Brian J. Driscoll will join the Snyder's-Lance board of direction following the closing. • "The combination of Diamond and Snyder's-Lance provides the opportunity to create significant value for our stockholders and offers immediate benefits for consumers," Driscoll said. "This transaction will create a diversified, branded snacking portfolio with greater operating scale. In addition, we expect the transaction will provide us with greater resources to further develop new product innovation and broaden our geographic reach and route to market across complementary customer bases. We are excited about the opportunities this combination will create for consumers and our stockholders." 22

Digital News November 2015 Competing on Customer Journeys David C. EdelmanMarc Singer From the November 2015 Issue November, 2015 (Harvard Business Review) Digital technology has created consumers so expert in their use of tools and information that they can hunting down what they want when they want it and get it delivered to their doorsteps. In response, retailers have scrambled to develop big data and analytics capabilities in order to understand their customers. Companies have been reacting to customers, trying to anticipate their next moves and position themselves in shoppers’ paths as they navigate the decision journey from consideration to purchase. Now, leveraging emerging technologies, processes, and organizational structures, companies are restoring the balance of power and creating new value for brands and buyers alike. Central to this shift is a fresh way of thinking: Rather than merely reacting to the journeys that consumers themselves devise, companies are shaping their paths. Marketers are increasingly managing journeys as they would any product. Journeys are thus becoming central to the customer’s experience of a brand—and as important as the products themselves in providing competitive advantage. Marketers have been studying consumers’ decision journeys. The term broadly describes how people move from initially considering a product to purchasing it and then bonding with the brand. More narrowly, the term can refer to the sequence of interactions consumers have before they achieve a certain aim—for instance, discovering and buying the right mascara. Some retailers have become competent at understanding the journeys their customers take and optimizing their experience with individual touchpoints along the way. We’re now seeing a significant shift in strategy, from primarily reactive to aggressively proactive. Companies are designing and refining journeys to attract shoppers and keep them, creating customized experiences so finely tuned that once consumers get on the path, they are irresistibly and permanently engaged. Unlike the coercive strategies companies used a decade ago to lock in customers (think cellular service contracts), cutting-edge journeys succeed because they create new value for customers: Customers stay because they benefit from the journey itself. 23

Digital News November 2015 Consumers Skeptical of Retailers’ Data Privacy Initiatives October 28, 2015 (Progressive Grocer) Consumers worldwide are strongly negative about retailers’ privacy initiatives, says a new study that uncovers the drivers of this sentiment. The study from Capgemini Consulting points to the need for retailers to balance personalization and privacy infringement. The report is based on a social media sentiment analysis of more than 220,000 conversations over six months and covering 65 large global retailers that collectively generate revenues of over a trillion dollars • Key findings from the report include: • Consumers worldwide are strongly dubious of retailers’ privacy initiatives: 93 percent of all consumer sentiment on this subject was negative. • Security and invasion of privacy are key data issues: The main factors driving negative sentiment are data security (76 percent) and intrusive behavior by the retailer (51 percent). • Data collection slips into intrusion: Technology perceived as intrusive was met with high suspicion, including in-store traffic monitoring (84 percent negative) and facial recognition (81 percent negative), • Personalization initiatives have been received largely positively across the globe: 80 percent of all consumer sentiment on personalization was positive globally. But there are some discrepancies across regions – North America is positive about retailers’ personalized offers, while Europe displays a mixed sentiment. • Striking the balance between privacy and personalization eludes most: Only 14 percent of retailers are perceived positively by consumers on both personalization and privacy initiatives. A significant number of brands actively antagonized consumers, with nearly 29 percent of retailers leaving consumers dissatisfied with both their personalization and privacy initiatives, largely due to intrusive loyalty programs, excessive promotional mails, poor in-store service, or confusing opt-in/opt-out instructions. • The report urged retailers to address associated privacy and personalization challenges, including the importance of being transparent with how and when they will use customer data. What is needed is a blend of trust, transparency and consumer control over data. 24

Digital News November 2015 Retailers Ready and Waiting For The Internet of Things October 23, 2015 (Screen Media Mag) Retailers are leading the pack when it comes to awareness of the Internet of Things (IoT), according to new research. An IDC survey of global decision-makers found that 56% in retail were “familiar” with the IoT, against 53% in manufacturing, 45% in professional services, and less in other sectors – with healthcare, a prime potential application area for IoT, scoring surprisingly low. • Retail’s pre-eminence in the emerging field is confirmed as tech heavyweights reiterate the importance of customer experience and the role it will play in implementation of IoT, as well as IoT’s potential for effecting sweeping changes in business. • “It’s the customer experience” that matters most, Gartner executive partner Carl Deal said at a recent conference in Ohio. “Who is the easiest to do business with? The reason Amazon Prime is so cheap is so you come back. We have to be able to generate a customer experience that will make our customers want to come back to us.” • Alexis Ohanian, CEO of social media service Reddit, seemed to concur. For example, success for wearable devices would be based on making “the experience seamless and valuable”, he said at a recent event hosted by PC maker Dell. • “No matter what the future holds it’s going to be based around these three components: It’s going to be data-intensive; it’s going to be security-intensive; it’s going to be network-intensive,” said Gartner’s Deal, forecasting that there by 2020 there will be 30bn IoT-connected devices, against 7.3bn personal devices. • “I believe this is bigger than the first wave of the Internet,” agreed Chuck Robbins, CEO of Cisco, speaking to international journalists at the networking giant’s California headquarters. “It has to be. We’re on the front end of something that is big.” • And the big tech firms are not just paying lip service to IoT. For example, Amazon’s cloud business Amazon Web Services has already launched a system to help firms build IoT applications. Called AWS IoT, it is now available in beta form. 25

Digital News November 2015 Digital Engagement Strategies To Grab Millennial Market Share October 5, 2015 (Media Post) How do today’s businesses differentiate themselves in a competitive media landscape to capture millennial market share? Here are three key digital engagement strategies : Build Evangelists Via Mobile. CreditCards.com states over 88% of millennials use a smartphone and 52% use it for online purchases. Embracing mobile engagement must be a strategic pillar of your greater digital strategy, not just to entertain this always-on market segment but also to build a community of brand evangelists. Converting a single, well-networked social group of millennials to become brand ambassadors can dramatically increase your brand message’s reach. Digital content can be used across mobile channels including heavy video usage with first-person perspectives, easy-to-find and easy-to-share user reviews of products or services and incentive models with no strings attached. Be Authentic. According to a 2015 Forbes survey, a compelling advertisement builds brand trust with only 1% of millennials it reaches. Millennials genuinely interested will engage your brand and exchange personal information for relevant content. But if this trust is broken, they may never return -- and they will tell their friends. The ideal platform for trust-building with millennials is social media. A recent Edelman survey found 82% of millennials would have more faith in a company if it was involved in social media. Brands like Mattel’s American Girl Doll build trust with millennials exceptionally well by embracing Twitter, Facebook and Instagram to engage in active two-way communication with their customers. • Embrace the In-Venue Experience. In-venue or in-store experiences can drive substantial millennial engagement, increase brand interest and create new opportunities for revenue generation. Digital technologies allow customers to engage and have fun with your brand. Another means of engagement is one you can’t see: Wi-Fi. Providing this connectivity enables customers to make a point-of-sale purchase or to broadcast their experience. In a recent survey by IHL Group, 28% of retailers reported that offering customers WiFi has a positive impact on customer loyalty and report a 2% sales lift thanks to the service. Consider also that over 60% of small business retailers report that the average visit duration increases after Wi-Fi is made available, according to iGR Research. And, if the Wi-Fi is strong and reliable enough, millennials will engender so much “FOMO” (fear of missing out) that their friends may just want to see what all the fun is about; thus, creating future engagement. 26

Digital News November 2015 7-Eleven Makes Bills Convenient October 26, 2015 (Path2Purchase) 7-Eleven recently began heavily promoting a mobile bill pay application it launched over the summer with Sunnyvale, CA-based PayNearMe. 7-Eleven- and PayNearMe-branded app aims to serve consumers who have limited or no access to bank accounts. The retailer also hopes it will increase foot traffic and attract new shoppers, according to a media release. The "7-Eleven Bill Pay” app lets shoppers pay their bills with cash in most 7-Eleven stores, as well as track payments and set due date reminders. Shoppers enter their billing information into the app to create a barcode that can be scanned while checking out, when they can pay the bill using cash. Fees range from $0 to $5.99 per bill depending on the biller and size of payment. Window clings and a video on the retailer’s YouTube channel first spotlighted the app in July. The retailer reignited support in September with Facebook and Twitter updates and a home page carousel ad on 7-eleven.com. “[The] 7‑Eleven Bill Pay app builds on 7‑Eleven’s portfolio of products and services that are affordable and convenient for financially underserved customers,” said Raja Doddala, 7‑Eleven’s vice president of innovation and omnichannel strategy,. “This app is one in a series of innovations that will take 7‑Eleven stores from being convenience stores to ‘convenient’ stores.” PayNearMe also operates its own bill pay app, allowing consumers to pay their bills in cash at 7-Eleven, Family Dollar and Ace Cash Express locations. 7‑Eleven is the first retailer to partner with the financial services company to use PayNearMe’s existing technology for a co-branded app. 7-Eleven shoppers can use either of the two apps. “There is a lot of buzz around the potential of digital payments, but you can’t push cash into a smartphone or a computer,” said Danny Shader, PayNearMe’s founder and chief executive officer, in the release. “We are digitizing cash transactions to make it easier for consumers to pay, for billers to accept and for retail partners like 7‑Eleven to process.” 27

Best In Class November 2015 Bye-Bye, Black Friday? REI Proves It's Already Happening • October 28, 2015 (Marketing: Daily) • Outdoor retailer REI says it is shuttering the shop this Black Friday, the biggest shopping day of the year, and urging its customers to #OptOutside. It’s even extending the holiday to e-commerce, and says it intends to feature a black takeover screen on its site, encouraging customers to get outdoors with friends and family. Experts say that it’s just the latest example of Americans growing increasingly blasé about retailers’ relentless hype leading up to Thanksgiving weekend. • REI, which is the nation’s largest co-op, says it sent a letter to its 5.5 million members, explaining that it intends to pay all 12,000 of its employees to skip the mall and head to the mountains instead, using a social media campaign to encourage them to share their outdoor adventures. (A dedicated Web site offers recommended hikes.) • The letter from the Seattle-based company, which has $2.2 billion in annual revenues, quotes outdoor visionary John Muir, circa 1901: “Thousands of tired, nerve-shaken, over-civilized people are beginning to find out that going to the mountains is going home.” • That is bound to strike a chord with consumers who have become increasingly doubtful about all those Midnight Madness and overblown doorbuster events, and REI’s move is a whole new point of differentiation. 28

Best In Class November 2015 Lean Cuisine's Installation Makes Weighty Statements • October 29, 2015 (Marketing Daily) • Continuing its new push to reposition from diet brand to healthy lifestyle brand, Nestle's Lean Cuisine this week staged what might be described as commercial performance art (to coin an oxymoron) in New York's Grand Central Terminal. • The interactive installation, running nearly the entire width of the station's Vanderbilt Hall, displayed 244 bathroom scales painted with inspirational messages by Brooklyn-based artist Annica Lydenberg. • Some of the messages, celebrating "all the things that women value more than their weight," were submitted by women to the brand in advance, via social media; others were offered by women who stopped to view the installation, which was in place Oct. 26 and 27. • The messages spotlighted a wide variety of accomplishments, including "a combat veteran," "finishing med school," "raising three kids," "becoming a dentist," "being a paramedic," "graduating magna cum laude at 50," "feeding people in need," "getting along with my ex" and "being proud of myself." • The Grand Central event was an extension of the social media strategy within the brand's repositioning campaign. Dubbed #WeighThis, from the 360i agency, the social push kicked off in late June. That was followed in early July by a new broadcast campaign, "Feed Your Phenomenal," from Grey. The social media efforts commenced with a 2:25-minute #WeighThis video, showing uncomfortable reactions from "real women" (not actresses) as they were asked to approach a scale, contrasted with their subsequent confidence when asked to describe some of their achievements. That video, filmed in a closed shoot, was designed to "start a conversation about valuing women's accomplishments instead of their weight on a scale," Julie Lehman, Lean Cuisine’s director of marketing, tells Marketing Daily. With support from paid digital media and several social "influencers," the video has racked up more than 6.35 million views since being released on June 23, according to the brand. The social media video created from the Grand Central event will also have paid digital media support. 29

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