WHAT WINS THEIR WALLETS?SHOPPERS IN STORES

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PRESENTATION SPEAKERS

Nikhil SharmaVP, Consumer & Shopper Analytics,

Nielsen

Daniel JenskiAssociate Director of Consumer Analytics,

Mondelēz International

#Consumer360

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SHOPPER QUIZ

• % of CPG sales that occur in brick & mortar stores? 96%

• % of brand decisions that are made in-store? 67%#Consumer360

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SHOPPING IS BECOMING MORE COMPLEX

24,000 NEWretail stores since 2009

50% INCREASEin SKUs in 7 years

EXPONENTIAL GROWTHof product advertisement

#Consumer360

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ALL MARKETERS WANT TO DRIVE GROWTH BY OPTIMALLY SERVING THE SHOPPERHowever, the manufacturer and retailers mindset can be different

RETAILER

MANUFACTURER

DRIVE GROWTH

DRIVE GROWTH

MORE INNOVATION TO ENGAGE &

RETAIN SHOPPERS

EXCESSIVE CHANGE MAY DISRUPT

SHOPPERS

SHOPPERS GOALOptimally serve shoppers

Grow salesMaximize profitability

More ShoppersMore TripsMore Items

#Consumer360

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TECHNOLOGY CAN HELP DRIVE GREATER ALIGNMENT IN SHOPPER MARKETING

GOALOptimally serve shoppers

Grow salesMaximize profitability

RAPID CHANGE

MEASURED CHANGE

TECHNOLOGY = a KEY enabler!

RETAILER

MANUFACTURER

#Consumer360

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ENGAGEsocial advertising EVALUATE

social listening

CONSUMEtechnology enabled consumption tracking

geo-location based advertisingPLACE

virtual store technology, shelf imagingPURCHASE

IN FACT, TECHNOLOGY IS ALREADY BEING USED EXTENSIVELY IN SHOPPER MARKETING

DEMAND BUYPath to Purchase

digital ethnography smartphone payment methods

prior lists & recommendation servicesPLAN

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TODAY WE WILL DEMONSTRATE HOW TWO TECHNOLOGIES ARE HELPING TO WIN IN-STORE

Virtual Store Image Recognition

Easier Testing Better ExecutionWhat is it used for?

What benefit does it drive?

• Shelf layout• Pack and Price Architecture• Merchandising

• Compliance• Availability• Visibility

“Understand what to do in-store” “Ensure it actually gets done”

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#Consumer360

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Virtual Store

“Understand what to do in-store”

Easier Testing

#Consumer360

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VIRTUAL STORE TECHNOLOGY Online platform to measure in-store shopping behavior

Consumers cannavigate 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

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MONDELĒZ WANTED TO LEVERAGE VIRTUAL STORE TESTING

There were many hypotheses about the cause and the possible solutions:

How do we test these ideas in an efficient & cost-effective way without alienating shoppers?

The multipack business for Biscuits had been decreasing for years while the multipack business for Salty Snacks had been growing

Alternative pricing & promotion strategies? New Pack counts or varieties?

Alternative shelf layout?

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VIRTUAL STORE GIVES MONDELĒZ A ‘SAFE’ TESTING ENVIRONMENTStudy 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

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WE WERE ABLE TO TEST VARIOUS SCENARIOS… 1

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… AND QUANTIFY THE EXPECTED IMPACTReduce unit count in an existing multi-pack product

Brand Impact Category Impact

Mondelez would lose 2.6 Million Units to competing brands!

Our Retail Partner

would sell 1.4 Million

fewer Units of the

category!

We tested 27 such ideas … in only 12 weeks!

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MONDELĒZ DEVELOPED TANGIBLE IDEAS TO REVERSE THE DOWNWARD BUSINESS TREND

Considerdownsizecarefully

Launch new sizes

Don’t be too aggressive withnew size promo

Maintain key flavors in line

Larger sizes can work on bottom shelf,

but smaller sizes tend to perform better

at eye levelDo not include

constant consumables in a multipack shelf

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WE IMPROVED OUR RETAIL PARTNERSHIPS & REALIZED SEVERAL OTHER BENEFITS

Quicker Relative To In-Market

Testing

Cheaper Relative To In-Market Testing

No Need To Manufacture Test Products

Able To Test Results In Mass

and Grocery Formats

No Inconvenience To Our Retail

Partners

Tested More Ideas Compared

To In-Market Testing

#Consumer360

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THE VIRTUAL STORE TECHNOLOGY IS A POWERFUL SOLUTION TO DRIVE IMPACT AT RETAILThe Benefits:

Confidential and secure

Global solution

Comprehensive and powerful management tool

Flexible

Does not disrupt retailers

Less expensive and faster

#Consumer360

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Image Recognition

“Ensure it actually gets done”

Better Execution

#Consumer360

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EXECUTION AT RETAIL IS CRITICALLY IMPORTANT

EXECUTION

As an industry, we invest significantly here…

… but often fall short here

INNOVATION MARKETING

#Consumer360

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WHAT IS REALLY HAPPENING IN STORE?

?“What you think is happening” “What is actually happening”vs.

#Consumer360

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IMAGE RECOGNITION TECHNOLOGYSmartphone 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

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SHELF IMAGING ALLOWS YOU TO FIX ISSUES AT RETAIL IN A NEARLY REAL TIME MANNER

“What Should We Fix?”

Real Agreed Differences

“How Well Are We Doing?”

Picture of Actual Shelf Planogram of Actual Shelf

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A HEALTH & BEAUTY MANUFACTURER USED IMAGE RECOGNITION TO EXECUTE BETTER AT RETAIL

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-optimalManually collected self reported data + Time consuming consolidation process = Long timeframe for shelf changes

BUT

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EXECUTION IMPROVED SIGNIFICANTLY RESULTING IN SUBSTANTIALLY LOWER OPPORTUNITY COST

February

May

Stores Meeting Minimum ‘Share of Shelf’ Requirement

(Indexed to 100)

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+11%Improvement in

Execution!

• 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?

Food For Thought…

For a brand with nearly $45MM in sales from promotions…

$4.5 MillionIncremental Sales

Opportunity!

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IMAGE RECOGNITION TECHNOLOGY CAN DELIVER OTHER SUBSTANTIAL BENEFITS

More effective salesforce deployment

Lower ‘opportunity cost’ for retailers

Improved shopper satisfaction

Granular Data

Quick Turnaround

High Accuracy

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TECHNOLOGY CAN DRIVE TANGIBLE OUTCOMES AND MORE EFFECTIVE SHOPPER MARKETING!

Virtual Store Image Recognition

“Understand what to do in-store” “Ensure it actually gets done”

Easier Testing Better Execution

#Consumer360

1 2

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IN-STORE TECHNOLOGIES CAN PROVIDE A MYRIAD OF BENEFITS

Deploy at scale compared to some traditional methodsScalability

Significantly improve ‘time to market’

Offer privacy against competitors

Result in limited to no disruption to the shopper

Cycle Time

Privacy

Shopper Disruption

#Consumer360

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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 variousapproaches and tools

Determine whether and what part technology can

play in the full solution

#Consumer360