Magnet—Unilever: Winning together with new technologies in Health and Beauty

Content

Unilever is an expert in Health & Beauty categories

deodorants hair care shower gels soap

UL #1 UL #3 UL #2 UL #2

OTHER

AIST

RECKITT BENCKISER

EVYAP

NEVSKAYA KOSM.

KALINA

COTY

HENKEL - SCHWARZKOPF

P&G

L'OREAL

COL. PALMOLIVE

BEIERSDORF

UNILEVER

13% 14%16%

16%29%

15%

1%

3% 4%

15%14% 11%

27%

7%

10%

4%1%

18%

11% 7%

13%

11%

9%

34% 31%9%

8%5%1%

41%

Unilever Health & Beauty strategy is based on Macro Category Growth Drivers

Regime & Routine

Trading Up, Reaching down

Life Stage

Fashion & Trends

Male Grooming

Endorsement & Expertise

Relevant Innovation

Retail Execution

Health & Beauty Category drivers – implications in store

Growth Driver Implications in store

Trading Up,

Reaching Down

Fashion

& Trends

Endorsement

& Expertise

Retail Execution

Innovation

Male Grooming

Life Stage

Regime

& Routine

How to drive Health and Beauty categories?

More users

More benefit

More usage

How to grow Health & Beauty?

Get Shoppers down the aisle

Drive basket sizeGet Shoppers to slow down

Magnet is one of the key modern trade Customers in Russia

Magnet fast and swift development on Russian market is impressive

1994–1998 1998–1999 2001–2005 2006–2009 crisis 2010–2011

Foundation of wholesale business by Mr. Galitskiy Tander becomes one of the major distributors of household products and cosmetics in Russia Decision to expand into food-retail market

First convenience store opened in Krasnodar Experiments with format Stores merged into Magnit discounter retail chain

Rapid regional roll-out: 1’500 stores by the end of 2005 Adoption of IFRS Strict financial control Performance-linked compensation

Leading food retailer in Russia by number of stores IPO in 2006 Independent director elected to the Board Audit Committee established Corporate govern-ance rules estab-lished to comply with best practice SPO – 2008, 2009 24 hypermarkets opened in 2007-2009 636 convenience stores opened in 2009 (the total store base is 3’228 as of December 31’2009)

Acceleration of growth – 800 conveni-ence stores and 27 hypermarkets added in 2010 Large investment programme for 2011: plan to make Capital expenditures of about $1.8 bn Plan to open up to 800 convenience stores and up to 50 hypermarkets during 2011 Ongoing efficiency improvement

Source: http://magnit-info.ru/investors/press/

Extensive growth is one of key sources of development for Magnet

Number of opened stores, NET 1254

2011

5309

1970.16

827

2010

4055

1422.38

Total number of opened stores

Total trade area, thousand square metres

Key operational indicators

Source: http://magnit-info.ru/investors/press/

Opportunities for Magnet and Unilever cooperation in Health & Beauty are significant and impactful

Unilever Health & Beauty expertise and knowledge using CiiC technology

Magnet – Reinventing Hypermarkets & Perfumeries, intensive growth of Health & Beauty categories

Implement Health & Beauty project through collaboration in test stores

Sales increase in Health & Beauty categories by +10 +15 %

CIIC – what does it mean?

CIIC — CUSTOMER INSIGHT AND INNOVATION

CENTRE OF UNILEVER

N. America

Sao PaoloSept 2010

LondonParis Shanghai

Singapore-Nov 2010

Global CIIC mission

Knowledge Centre in CIIC

Virtual Laboratory in CIIC

Retail Laboratory — physical simulation of opportunities

Planograms & Category Management

Department «Look & Feel»

POSM Testing & Research

Call to Action

Retail Laboratory — physical simulation of opportunities

CIIC backgroundMagnet Health & Beauty opportunities in Hypermarket

Beauty Care

Personal Care

HealthCare / Specialist

Male grooming

Magnet and Unilever used Global Health & Beauty expertise in lay-out organization

Benefits: Key insights

1

2

*1

Magnet confirmed Unilever Health & Beauty lay-out in Hypermarket test store

New accepted lay-out based on:- Level of penetration

- Top 3 key categories that bring value to Magnet

- Number of racks for category placement

Male Shopper research that was held especially for Magnet confirmed the necessity to create Male Grooming area

Male Grooming key insights*:

1

5

2

6

3

7

4

Male Grooming categories should be together in Health & Beauty department and stands separately from female and unisex categories

Male Shopper research that was held especially for Magnet confirmed the necessity to create Male Grooming area

Magnet male shoppers desires and wishes*:

Separate Male Grooming area was created in Magnet

Male products can now be easily found and navigated inside the store

Before

After

Navigation proposal for Magnet Hypermarkets in Virtual Reality

We agreed on Health & Beauty design and navigation elements in Hypermarkets

New category navigation attracts shoppers to Health & Beauty area

Navigation elements are visible from any point in the store and attract shoppers into Health and Beauty department

Stoppers

All H&B area is clearly segmented and helps shoppers to find product on the shelves easily and spend more time in the department

Floor stickers

Shelf strips

Shelf dividers

Toppers with category segmentation

TG decoration attract shoppers attention to promo offers

Before

Before

After After

Dividers make category well organized and fix planogramms

After

Before

Shoppers like new Health and Beauty area in Magnet

WELLDONE

Magnet – Unilever: future plans for collaboration

1

2

3

Thank you!Nadezhda Butrimova

Mariya Troshina