The Changing Role of Catalogues David Jesson May 07

Overview Why multi channel Channel characteristics The role of catalogues and online channels Summary

Why multi channel

Channel characteristics

The role of catalogues and online channels

Summary

Consumers shop across a variety of channels Base: All Respondents (836, 813)

Power of the Multi Channel Source: Andrew Wilson / USPS Store Internet Catalogue £spend pa

The Components of Multi Channel Website Store Catalogue Contact Centre (Inbound and Outbound) Mobile devices Email Advertising PR

Website

Store

Catalogue

Contact Centre (Inbound and Outbound)

Mobile devices

Email

Advertising

PR

Characteristics of main Channels Catalogue Website Store Intrusive Portable Limited Space Information Range High Quality Images Shared Guided Passive Fixed Unlimited Space Information Range Low Quality Images Solitary Self directed Passive Fixed Limited Space Information Range Touch/Feel Product Shared Self directed but assisted Andrew Wilson Catalogue Consultancy

Intrusive

Portable

Limited Space

Information

Range

High Quality Images

Shared

Guided

Passive

Fixed

Unlimited Space

Information

Range

Low Quality Images

Solitary

Self directed

Passive

Fixed

Limited Space

Information

Range

Touch/Feel Product

Shared

Self directed but assisted

Market Trends 52% UK population shops from home Online shopping is key engine for growth Online Retail for 2006 worth £18.5bn (40% up on 05) Incl. Christmas £7.5bn (50% up on 05) Average spend online per person per year significantly up on 2005 Av. online spend is £1,299 (27% up on 05) Catalogue transactions (via tel/post) static or in decline Av. catalogue spend (via tel/post) is £509 (+40% vs 05) Source: RM HS Tracker 2006 + imrg

52% UK population shops from home

Online shopping is key engine for growth

Online Retail for 2006 worth £18.5bn (40% up on 05)

Incl. Christmas £7.5bn (50% up on 05)

Average spend online per person per year significantly up on 2005

Av. online spend is £1,299 (27% up on 05)

Catalogue transactions (via tel/post) static or in decline

Av. catalogue spend (via tel/post) is £509 (+40% vs 05)

Does this mean the death of the Catalogue?

Multi Channel Research 2006 Sponsored by Royal Mail

comScore Research Study Custom research study commissioned by Royal Mail, conducted by comScore Survey of 1,800 internet users who had visited key retail websites combined with passively monitored behavioural data 30 individual websites across 4 distinct categories included Online Retailers including:- Amazon, Dell Play.com etc . Grocers including:- Tesco, Sainsburys Asda etc. Multi-Channel Retailers including:- Boots, John Lewis Next etc. Large Mail Order Cos including:- Freemans, Littlewoods LaRedoute etc.

Custom research study commissioned by Royal Mail, conducted by comScore

Survey of 1,800 internet users who had visited key retail websites combined with passively monitored behavioural data

30 individual websites across 4 distinct categories included

A large majority across all categories do actually read the catalogues they are sent Base: Respondents who receive catalogues: N = 728 “ When you receive a catalogue from xxx do you tend to read it?” Yes No

Those who read the catalogues show strong intention to purchase Base: Respondents who read/look at catalogues received in the mail : N = 670 “ How likely are you to make a purchase at xxx after reading the catalogue?” Neither Likely Nor Unlikely (3) Unlikely (1-2) Likely (4-5)

Catalogue recipients make 76% more purchases online than non recipients over 12 months “ How many times did you make a purchase online at xxx in the last 12 months?” Base: Total respondents: N = 1799 6.0 10.6 +76% Avg. Number of Purchases (last 12 months) Have Not Received Catalogue Received Catalogue 54% Made Purchase 73% Made Purchase Extra 4.6 purchases

Catalogue recipients spend £110 more online than non recipients over 12 months “ How much did you spend online at xxx in the last 12 months?” Base: Total respondents: N = 1799 +73% Avg. Amount Spent (last 12 months) Have Not Received Catalogue Received Catalogue 38% Spent More Than £50 £ 262 £ 152 58% Spent More Than £50 Extra £110 per web site visited

The difference in online spending is greater for men than for women +£99 (+62% ) +£127(+90%) Women: Non Recipients Average 12 Month Online Spend : £160 Catalogue Recipients Average 12 Month Online Spend: £259 Men: Non Recipients Average 12 Month Online Spend : £142 Catalogue Recipients Average 12 Month Online Spend: £269 “ How much did you spend online at xxx in the last 12 months?” Base: Total respondents: N = 1799

The Catalogue impact is across all age groups measured +41% +67% Base: Total respondents: N = 1799 +42% +119% +91% “ How much did you spend online at xxx in the last 12 months?” Received Catalogue Have Not Received Catalogue

Those who have received catalogues more recently, spend more Base: Total respondents: N = 1799 £ 262 Avg. Total Spend - All £ 152 + £110 £ 310 £ 343 + £48 + £33 “ How much did you spend online at xxx in the last 12 months?” Spent >= £50 In Last 12 Months Spent < £50 In Last 12 Months

A Case Study: “Jill” and “Jane” Online behaviour of two similar panel members was recorded and examined in detail “ Jill” Visitor to tesco.com Female Born 1961 £4 0,000 to £ 60,000 per year Lives in South East “ Jane” Visitor to tesco.com Female Born 1956 £ 40,000 to £ 60,000 per year Lives in South East Receives Catalogue Does Not Receive Catalogue ‘ comScore 2006 – ‘Passively recorded behavioural data

Online behaviour of two similar panel members was recorded and examined in detail

“ Jill”

Visitor to tesco.com

Female

Born 1961

£4 0,000 to £ 60,000 per year

Lives in South East

“ Jane”

Visitor to tesco.com

Female

Born 1956

£ 40,000 to £ 60,000 per year

Lives in South East

“ Jill” who receives catalogues spent £350 online while “Jane” spent only £75 online Jan. Feb. Mar. Apr. May. Jun. 2006 “ Jill” “ Jane” No Catalogue Catalogue 3 visit 90 pages 50 mins 5 visit 23 pages 13 mins 4 visits 40 pages 23 mins 2 visit 57 pages 31 mins 1 visit 5 pages 6 mins Jan – Jun Total 15 visits 212 pages 118 mins Jan – Jun Total 2 visit 22 pages 21 mins 6 Purchases £350 Spent 1 Purchase £75 Spent ‘ comScore 2006 – ‘Passively recorded behavioural data 1 visit 17 pages 15 mins 1 visit 2 pages 1 mins

Multi channel catalogue recipients also spend significantly more offline than non recipients + £48 Base: Total Mulit Channel respondents: N = 443 “ How much did you spend offline at xxx in the last 12 months?” Received Catalogue Have Not Received Catalogue +61% “ How many times did you make a purchase offline at xxx in the last 12 months?” Multi-Channel Retailer

In summary Online has revolutionised the way millions of people shop, Consumers are more demanding Importance of using every means possible to reach customers - through stores, catalogues or via the internet Catalogues have undergone an evolution in the new retail world and are evolving from a sales channel into a sales driver

Online has revolutionised the way millions of people shop,

Consumers are more demanding

Importance of using every means possible to reach customers - through stores, catalogues or via the internet

Catalogues have undergone an evolution in the new retail world and are evolving from a sales channel into a sales driver

Thank You!