©2012 22squared 1

• During the summer of 2012 I was selected as the Brand Planning / Strategy Intern at 22squared.

• My greatest accomplishment was aiding in the development of Shoe Carnival’s strategy for the upcoming holiday season (Black Friday, Cyber Monday, Day After Thanksgiving, and Day After Christmas). This summarized deck showcases my experience.

• The following holiday season trends deck was created after:

• Conducting qualitative / quantitative research on industry & consumer trends.

• Leading focus groups.

• Analyzing technological trends.

• Evaluating Shoe Carnival’s previous holiday season efforts.

** Sensitive / client confidential information has been removed from this deck **

Grant A. Emory Work Sample

8.1.2012

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Agenda

2011 Stats…………………………………………………..4Trends in Holiday Shopping………………………………7Trends In Tech…………………………………………….19Trends in Consumer Spending………………………….27DAT………………………………………………..……….30

2012 Trends…………………………………………….36Cyber Monday…………………………………….…..….40

2012 Trends…………………………………………….47References………………………………………………..52

©2012 22squared

• About 44% of people own a smartphone.3

• Overall, consumers spent approximately 48 hours on holiday-related activities in 2011:

• 19.3 hours shopping (vs. 15.2 in 2010)

• 8.5 hours traveling (vs. 7.4 hours last year)

• 13.7 hours partying with family and friends (vs. 15.2 hours)3

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Stats from 2011

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• Immediately after the 2011 holiday-shopping season, IconoCommunities participants were asked where they had their worst purchase experience.3

• Participants who did have a bad experience named key in-store complaints, including:

• “lines were long and slow,” stores were “too crowded,” “the deals were lacking,” desired products were “not in stock,” poor “customer service,” “understaffing”3

• The small number who had a beef with an e-tailer mentioned “slow shipping” or said it was a “hassle to return” items, that “orders never came” or that the “checkout process was slow”3

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The Experience

Trends in Holiday Shopping

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• Examining mentions of holiday shopping, a sizable spike begins in early October, peaking on December 24.3

• Even though consumers are getting their holiday shopping started earlier, Christmas Eve showed the highest spike in chatter-- last-minute shopping still hasn't gone out of style.3

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Timing

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Text

• Consumers will be more value conscious, seeking low prices and avoiding some discretionary spending.1

• This will require good brand management and differentiation from competitors.1

• Customers will shift to discount retail venues, a shift toward private label products.1

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Value Seeking

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• The Retail Advertising and Marketing Association, cautions that retailers too focused on price will also appear tone-deaf.2

• Consumers are saying, "Don't try to tell me you have the best price, I expect that.'"2

More than Price

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Long-Term Worth• In a post-Consumerist era, families are taking the long view when it comes to holiday

spending.26

• Do we really need this?

• Will this bring the emotional benefit we want, or can we get that benefit in a lower cost way?

• Always insure the bond with consumers is authentic.26

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• The message: We give you the comfort of giving a great gift without spending too much and the joy of the hunt to find it.2

• "Consumers want to make sure they're shopping smartly and getting the best possible deal, but they also want to make sure they're giving great gifts."2

Smart Shopping

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• The holiday shopping season turned out to be two seasons: the Black Friday binge and a last-minute surge.8

• The doldrums in between showed how shoppers have learned to wait for the discounts they know will come.8

• The companies that spread their discounts over the season did well, while those that used up their promotions during the weekend after Thanksgiving suffered.7

• Still, the increase in sales and traffic may not help retailers' fourth-quarter profit much since discounts were so liberally used to attract customers.7

• "Many retailers got caught up in offering deals and didn't plan for later. They're going to take a hit on profit."7

Discounts

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• The NRF reported last year that consumers had been more influenced by advertising.9

• That's good news for marketers who worked hard to craft messages that would resonate with cautious shoppers.9

• Nearly 20% of shoppers said last year's holiday commercials motivated them to shop at a particular retailer, the highest figure in at least five years.9

• Shoppers also said they were more swayed by in-store and email promotions, online advertising and social media last year.9

Ad Influence

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Self-Gifting

• Self-gifting emerged as a trend last year, as consumers snapped up sale items and rewarded themselves after several years of holding back.9

• Some retailers offered steep discounts last year, motivating shoppers to buy gifts and treat themselves.7

• With the help of plucky brands, they're giving themselves the gift of excitement and discovery with mystery-product parcels.3

• Four years into a deep recession, indulgence-yearning consumers are ready for a little retail escape.3

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• Today, the surprise has largely been sucked out of shopping: Apps plan shopping trips and coupons dictate the list; e-retailers suggest "something else you might like" etc.3

• Budget constraints and e-retail advancements are changing recreational shopping: Window shopping and its splurges are shaded by guilt, while online shopping turns browsing into a more methodical activity.3

• Spontaneity gives a unique feeling of thrill and satisfaction.3

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Dull Shopping

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Returns• Returns are a natural part of doing business, but they increase with tough economic

times as consumers either have buyer's remorse or find the same thing or similar at a cheaper price somewhere else.3

• Retailers could easily reduce the latter by offering price guarantees that meet or beat competitors' prices, and eliminate the cost of restocking.3

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Trends in Tech

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Tablets

Text

• 18% of people have a tablet.3• which is up 50% from summer 2011.

• Catch users between leisure activities and commerce pursuits, the tablet is well-positioned to deliver fashion retailers' custom style content.3

• Haute fashion houses engage iPad users with behind-the-scenes access and exclusive content.3

• Merging the handheld catalog viewing experience and online capabilities, the tablet format creates an ideal situation for aesthetic inspiration and immediate purchase facility.3

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Mobile App

• Old Navy:

• Stepped up its holiday mobile effort with the debut of Snap Appy, an app that amps in-store interactiveness.3

• Customers snap a pic of the retailer's logo (wherever they find it: in-store, on a bag, on TV or online) to get a seasonal surprise like a discount (to use instantly or save for later), a game or fashion tips. They can also scan instore merchandise to get more details about the items.3

• Snap Appy's augmented reality function lets shoppers upload a personal photo and overlay images of the retailer's popular styles.3

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Tying an app to the in-store experience is a smart way to bridge the two platforms, but consumers aren't going to engage just for the sake of firing up their smartphones — they want to be promised a genuinely rewarding payoff like valuable discounts, fun entertainment or inspiring style advice.3

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• A digital kiosk allows RFID-tagged products to be recognized by the screen for the purpose of providing an interactive, deeply informative customer experience.

• When a shoe is placed on the table, customers can learn about style, fit, product attributes and access customer reviews/ratings via social media platforms.

• This will bring new consumer shopping habits directly to retail environments.

Digital Shoe Kiosk6

• Macy’s , Adidas, and DC shoes are currently using similar systems.

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• Augmented-reality tool takes the shopping experience from the store to a customer’s home Using a mobile device to take pictures of item tags in store, the customer can then try on and purchase items in their home by using a Kinect Cam to bring together the items onto their body.

• Incorporates mobile interactivity through the use of NFC and Microsoft tags, social sharing and expert recommendations based on historical purchases.

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Virtual Dressing Room6

• Banana Republic and Nordstrom are interested in the technology.

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• Mirror that allows customers to check out and purchase items straight from the dressing room, share their selections via social networks as well as providing suggestions on other items they might like based on their original choices.

• This gives the retailer the opportunity to provide a higher level of customer service, and gives the customer new ways to shop.

Interactive Mirror6

• Infiniti currently uses the technology in select dealerships.

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Trends in Consumer Spending

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• In January 2012, IconoCommunities participants were asked to choose one of four statements to describe their approach to budgeting for holiday shopping in 2012.3

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Don’t discount the bargain-shopping experience — make it fun.

• For many gift givers, the sale rack is the primary playground, not a secondary option.

Amp exclusivity.

• Limited-edition items can still send shoppers’ hearts racing.

Extend the gift of convenience.

• Especially during the holidays, consumers have their heads and hands full, but they still crave seasonal cheer.

Free shipping and hassle-free returns are two of the most important offerings to online shoppers.

• In one survey, 9 of 10 shoppers listed free shipping as a priority for the 2011 holiday shopping season

Dropping the wishlist on friends and family is always a little awkward and uncomfortable.

• Brands that create lighthearted and playful ways to share present preferences will be appreciated by customers who don't want to leave their gifts to chance.

Overarching Strategies3

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DAT

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2011 Takeaways

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• Sales rose 6.6% since LY, the strongest gain since 2007.10 • The increase was attributed in large part to the earlier openings this year and the push

for Black Friday online sales, which grew 24.3% (brick and mortar also saw a 5.5% increase in foot traffic).10

• $52.4 billion changed hands through the weekend.3

• People shopped in fewer destinations and spent more money, which suggests that they weren't buying only the merchandise advertised in circulars.11

Overall

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• The percentage of people who were shopping before midnight was up from 3% in 2009 to more than 24% this year.12

• The early opening hours really did the trick this year as many shoppers found it easier to stay up until midnight when many retailers opened as opposed to catching a few hours of sleep and before going to stores that opened at 4 a.m. or 5 a.m., as tended to be the case in prior years.13

Shift to Midnight

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• Retail analyst Lori Wachs claims that the midnight openings brought out a younger shopper that had previously not participated in Black Friday, and the baby boomers came through later in the day.14  

• The New York Times reports that 18- to 34-year-olds who went shopping on Black Friday were far more likely than 35- to 54-year-olds to be in stores by midnight—36.7% vs. 23.5%, respectively.15

Demographic Shift

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• People shopped early and they shopped online, reflecting the trend of earlier than ever opening hours and an increased emphasis on e-commerce.16

• Fifty million Americans visited online retail sites on Black Friday, representing an increase of 35%, versus a year ago.16

• Black Friday online sales increased 26% to $816 million and Thanksgiving Day sales increased 18% to $479 million.16

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Online Focus

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2012 Trends

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Thanksgiving Day• Last year, sales on Thanksgiving Day grew by nearly 40 percent over the previous year,

including online.17

• In other words, there is a huge amount at stake on Thanksgiving day.17

• Retailers must plan to target the Turkey Day shopper with compelling offers while building a plan that sustains interest into Black Friday, over the weekend and into on Cyber Monday.17

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• Strong Black Friday turnout in 2011 suggests that consumers are getting an early start on their more intentional (and lengthened) shopping hours. They're also on the hunt for those "doorbuster" discounts.3

• Two things drove Black Friday sales in 2011: Consumer desire to get shopping started sooner and eagerness to capitalize on deep discounts. That speaks to an increased interest in saving both time and money.3

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DAT

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Decreasing Importance

• The majority of consumers (80%) avoided in-store Black Friday shopping in 2011.18

• While increased Black Friday promotions appeal to consumer’s desire for “hot deals,” as a shopping event, Black Friday is becoming less relevant in the retail world as online shopping grows and holiday promotions begin earlier and earlier in the year.18

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Cyber Monday

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2011 Takeaways

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• Monday was the highest-grossing online shopping day in U.S. history, with spending reaching $1.25 billion.20

• That's up 22% from Cyber Monday 2010.20

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Overall

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• Online shopping for the month of November hit $15 billion, a 15% increase compared to last year, comScore says.20

Online Shopping

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• There's also evidence that big online sales are creeping earlier in the holiday weekend and consumers aren't waiting for Monday.19

• Retailers are extending deals beyond just Cyber Monday. Amazon and Macy's are hosting two-day and week-long cyber sales this year.19

Extended Sales

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• Looking at the $338 million in e-commerce revenue resulting from search ads measured by Dentsu's IgnitionOne, Black Friday spending was up 63% year over year, compared with just a 34% increase on Cyber Monday.21

• Search spending on Black Friday was up 25% vs. last year, compared to a heftier 50% bump for Cyber Monday.21

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Search Advertising

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• A study by IBM shows on Cyber Monday, 10.8% of traffic to the sites of 500 retailers came from mobile devices, up from 3.9% in 2010.22

• Mobile sales grew dramatically, reaching 6.6% of total e-commerce sales on Cyber Monday versus 2.3% in 2010.22

• Mobile commerce technology vendor mShopper reports that promotional codes were used by 52% of all mobile shoppers on Black Friday and Cyber Monday on its 40 most active mobile clients’ sites. The average mobile order value was $88 and the average order size was close to two items. Further, mobile sales on Cyber Monday were 113% greater than on Black Friday.22

Mobile Commerce

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2012 Trends

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Smart Recommendations

• Gift giving recommendation and curation engines are popping up to help holiday shoppers find the right gift for each person.26

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• Etsy lets you shop based on your friends’ Facebook profile.26

• Amazon now asks if a product is a gift.26

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Research then Retail

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• Consumers are turning online not just as a buying channel, but as a research hub.26

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Blending Media

• Mobile is blurring the boundaries between in-store and online in a major way as smartphone toting consumers click, check-in, tag for later, and share their shopping.26

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• Amazon’s Price Check App.26

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1. http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Consumer%20Business/8664A_Consumer2020_sg8.pdf

2. http://adage.com/article/news/seasonal-psychology-stocking-stuffing/231361/3. Iconoculture Holiday Folder4. www.mediapost.com/publications/article/166909/shopping-days-are-qr-days-as-scanning-triples-in-2.html5. http://adage.com/article/digitalnext/april-time-strategy-order-black-friday-cyber-monday/233888/6. http://www.aaaa.org/news/agency/Pages/111011_ipg_medialab.aspx7. http://adage.com/article/news/holiday-discounts-boost-retailers-burden/231907/8. http://www.huffingtonpost.com/2011/12/29/holiday-shopping-2011-_n_1174198.html9. http://adage.com/article/news/holiday-outlook-brightens-lots-shopping/231595/10. http://online.wsj.com/article/SB10001424052970204452104577062154198956904.html11. http://adage.com/article/news/brisk-post-thanksgiving-sales-tough-maintain/231213/?

utm_source=daily_email&utm_medium =newsletter&utm_campaign=adage12. http://abcnews.go.com/Business/retail-sales-break-records-cyber-monday/story?id=1503662813. http://www.retailingtoday.com/article/record-day-retail14. http://abcnews.go.com/US/black-friday-midnight-openings-prove-worth-retailers/story?id=15032267#_blank15. http://moneyland.time.com/2011/11/29/what-we-learned-from-the-black-friday-cyber-monday-shopping-

extravaganza/#ixzz1fKFEK6oc

References

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16. http://www.retailingtoday.com/article/shoppers-gave-thanks-online-deals17. http://adage.com/article/digitalnext/april-time-strategy-order-black-friday-cyber-monday/233888/18. http://blog.nielsen.com/nielsenwire/consumer/80-of-u-s-consumers-skipping-stores-on-black-friday/19. http://adage.com/article/digital/cyber-monday-rakes-1-25-billion-22-2010/231240/?

utm_source=daily_email&utm_medium=newsletter&utm_campaign=adage 20. http://articles.cnn.com/2011-11-29/tech/tech_web_cyber-monday-data_1_cyber-monday-sales-online-retailers-

comscore?_s=PM:TECH21. http://adage.com/article/digital/cyber-monday-rakes-1-25-billion-22-2010/231240/?

utm_source=daily_email&utm_medium=newsletter&utm_campaign=adage22. http://www.internetretailer.com/2011/11/30/mobile-commerce-played-its-part-cyber-monday23. http://adage.com/article/news/holiday-outlook-brightens-lots-shopping/231595/24. http://adage.com/article/news/holiday-shopping-list-year/231432/25. http://www.ecommercetimes.com/rsstory/74612.html26. Iconoculture Advisory Brief27. http://www.blackfriday.fm/sales/380/target-2011-black-friday-previews-released28. http://www.blackfriday.fm/sales/384/target-2011-black-friday-ad-posted 29. http://www.blackfriday.fm/sales/430/target-pre-black-friday-online-only-sale-4-deals-in-3-hours