Informing Shoppers

Informing shoppers. Relevant and timely information to empower shopper choice ECR Europe, Barcelona 5th June 2009 Roberto Tojeiro, GADISA Lawrence Hutter, Deloitte 1 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

“The Coca-Cola Retailing Research Council Europe is dedicated to the development of a better understanding of the food retailing and allied merchandise distribution business in Europe. The focus of its energies is to identify and study critical issues and problems facing the industry and share the findings in suitable industry forums. The knowledge gained is used to develop and enhance the effectiveness of the food distribution and retailing business”. Other Coca-Cola Retailing Research Councils: Asia; Latin America; North America; and NACS (National Association of Convenience Stores). 2 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Informing Shoppers Individuals are subjected to a barrage of messages from a range of influencers through an increasingly complex media landscape Shareholders Consumer and other groups and financial vocal stakeholders individuals Mainstream Government: and specialist Policy makers, media: regulators, TV, radio, standards print, agencies Suppliers Retailers Internet Influencers, Opinion e.g.: healthcare Shopper leaders, e.g.: professionals, Researchers, educational & celebrity chefs, establishments Consumer activists Retailers and manufacturers need to get ahead of the game in communicating to shoppers and consumers or risk having others shape opinions about their business model and products 3 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Informing Shoppers This is complex – with many questions to think about • How are nutritional, environmental and food safety information needs changing? Shopper Driven • How important is “how to use” information, recipe options, provenance? • What will customers want to know in the future compared with today? • What do we (retailers and suppliers) want shoppers to know? How will this evolve? Industry Driven • Should certain types of information be standardised across industry? • What are the key current and future product labeling considerations? Regulatory Driven • What information may be required/expected by 3rd. parties (e.g. Governments, standards bodies, NGOs)? • How do we see shopper technology adoption evolving? Technology Driven • How might this information best be communicated now and into the future? The ambition is to inform what grocery retailers and their suppliers should do to help shoppers to make informed choices about where to shop and what to buy 4 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Informing Shoppers Objectives of the study To identify: • The information needs and wants of current and future European food shoppers and how these vary according to different criteria • The best methods for communicating with shoppers regarding their information needs and desires, both away from the store and at the point of sale, now and in the future 5 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Informing Shoppers Relevant and timely information to empower shopper choice 1. Objectives, scope and approach to the study 2. Key findings and implications 3. Conclusions and way forward – better informing shopper choice 6 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Informing Shoppers We developed a series of hypotheses as to the factors that influence shopper information use Hypothesis Proved? Socio-economic segmentation Specific health / dietary needs and age Occasion / shopper mission Product category Retail format Other specific consumer interests and concerns Developed versus developing markets Some of these hypotheses were confirmed, most were disproved 7 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Informing Shoppers The approach combined retailer, manufacturer and shopper research to develop practical insight into the ways shoppers use information Phase III: Phase IV: Phase I : Phase II: Analysis & Synthesis & Secondary Research Primary Research Interpretation Recommendations June 08 July 09 Aug 08 Sept 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 8 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Scope The primary shopper research covered 6 representative European countries • 6,300 consumer surveys across UK, Germany, France, Spain, Sweden and Romania • 12 accompanied shopping trips in the UK and in Romania • 65 pan-European industry interviews • 9 industry interviews • 10 industry interviews • 1000 online surveys • 1000 online surveys • 12 Accompanied Shops in Tesco & Sainsbury • 3 industry interviews • 1000 online surveys • 7 industry interviews • 1000 online surveys • 2 industry interviews • 1000 face to face surveys • 8 industry interviews • 12 Accompanied Shops in • 1000 online surveys Cora & Carrefour Other industry interviews: 16 Government body interviews: 3 Pan-European: 5 Turkey: 1 Technology providers: 5 UK Food Standards Agency Netherlands: 2 Hungary: 1 Cisco: 2 European Commission: 2 Belgium: 3 South Africa: 1 Oracle Research bodies: 1 Austria: 1 Russia: 2 Microsoft AMR Research GS1 9 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

1. Patterns of information use – a hierarchy of needs Shoppers’ product selection decisions in-store follow a broadly common process Step Taken Questions Asked Information Used • Brand Name • Colour 1: Look at Product • What is it? • Logo • Shape • How much is it? • Price 2: Check Price • Sell-by-date* • How does it compare to others? • Promotions • Weight/size • Is it worth the price? • Benefit Claims Iterative process • What’s in it? Where is it from? • Ingredients 3: Look at Other (Food) • Nutrition Guide • Instructions Product Attributes • How do I use it? How effective is it? • Origin and Benefits (Non Food) • Product Claims *All references to sell-by-dates also include use-by-dates 11 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

1. Patterns of information use – a hierarchy of needs (cont’d) This drives a broadly applicable hierarchy of information needs, though precise content varies understandably by category Brand 1. Product Identification Logo Shape Colour Product Name Price Sell-by-date 2. Basic Information Promotion Weight / Size Type / Variant / Flavour Environment Health 3b. Product Benefits 3a. Product Attributes Ingredients Nutrition Organics Successful shopper information strategies will meet the basic needs of the majority of shoppers Implications as clearly and simply as possible, while also accommodating more extensive information needs 12 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

2. Shopping on auto-pilot – the appetite for information Habit and convenience are the main drivers of where to shop Store choice is largely sub-conscious with the majority of shoppers defaulting to their ‘main store’ It’s my main store 53 It’s convenient 37 It’s good value for money 32 It has a good product range 28 Its promotions 18 It has good quality products 17 Loyalty card 13 Its customer service 4 Other 11 13 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

2. Shopping on auto-pilot – the appetite for information (cont’d) 49% of shoppers do not recall seeing or hearing any information that affected their choice of store None of these 49 29 Promotions or special offers 17 15 Information about the store 7 14 Products & services 8 Loyalty card/ rewards 12 6 % 11 Pricing policies 6 7 Quality standards info 4 3 Corporate info 2 3 Info seen Customer service policies 1 4 Looked for Other Given many shoppers lack of receptivity to information most of the time, impact and relevance Implications ‘to me’ are critical factors in being heard and influencing choice 14 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

3. Changing habits is hard – but ‘behaviour breakers’ exist Promotions are an important influence on the decision of where to shop, being the most looked for and recalled Promotions are the most recalled and sought after information cited by shoppers None of these 49 29 Promotions or special offers 17 15 Information about the store 7 14 Products & services 8 % Loyalty card/ rewards 12 6 11 Pricing policies 6 7 Quality standards info 4 3 Corporate info 2 3 Info seen Customer service policies 1 4 Looked for Other Shoppers have been encouraged to expect and respond to promotional activity. The question Implications for the industry is whether other ‘behaviour breakers’ can be made more important than today 15 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

3. Changing habits is hard – but ‘behaviour breakers’ exist Other ‘behaviour breakers’ such as clear and simple signage consistently used over time have proven successful Governments are encouraging fruit & vegetable consumption Country Key initiative Details "Go for 2 and 5" Launched in April 2005, "Go for 2 and 5" promotes the consumption of 2 servings of fruit and 5 servings of vegetables daily. The official website claims that Australia Australians only consume half of this target. The $4.76m campaign has included advertisements on TV and radio, in magazines and online, among others. “6 a day" The “6 a day” project is a public-private partnership with partners from governmental food and health organisation, non-governmental health Denmark organizations and the fruit and vegetable industry. It was launched very successfully across schools, workplace and retail settings. “5 a day” "5 a day" represents the campaign to encourage consumers to consume a combined total of at least 5 fruits and vegetables daily. While initially launched in UK the UK, "5 a day" has become a worldwide message adopted as a basic quota in many other countries. Schemes include the School Fruit and Vegetable Scheme. The Food Guide Pyramid In the US, the Food Guide Pyramid is a detailed graphic which gives target information about a variety of dietary aspects. The pyramid is more detailed than US other schemes, with charts outlining the number of ‘cups’ a consumer should intake. 16 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

4. Individual needs rule – introducing the Information Seeker Attitudinal responses enabled us to create shopper segments with similar attitudes and behaviours • Shopping is a Chore: “I shop for necessity rather than pleasure” Necessity Shoppers • Convenience Driven: “It’s important to shop at a store I can get in and out of quickly” 79% • Planners: “I only buy the products that I plan to buy” • Promotion Driven: “I tend to buy whatever is on promotion” Smart • Price Conscious: “I always pay attention to the prices of products I buy in supermarket” Shoppers • Impulse Shoppers: “I often buy things I don’t need and buy things on impulse in store” 69% • Shopping is Enjoyable: “I enjoy shopping and like to spend time choosing what to buy” Health Conscious • Health Conscious: “I care about my health and pay close attention to what I eat” 50% Quality • Quality Seekers: “I am prepared to pay more for quality and don’t mind paying Seekers more for the little luxuries in life” 27% Organic • Organic: “I prefer to buy organic food” 23% Green • Green: “I seek out and am willing to pay more for environmentally friendly products” 17% Not Engaged • Did not respond positively to any of these attitudinal statements 8% 17 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

4. Individual needs rule – introducing the Information Seeker Certain shopper segments have heightened needs for particular types of information - Universe of Respondents - Organic Dietary needs shoppers 40% 23% Green shoppers Smart 17% Shoppers 69% Quality Seekers 29% Not engaged 8% Health conscious 50% Necessity shoppers 79% 18 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

4. Individual needs rule – introducing the Information Seeker (cont’d) The types of information vary by individual need in both content and priority Colour coding highlights the different needs for information across groups Specific Dietary Rank Total Population Health Focus Organic Green Needs 1 Price Price Price Price Price 2 Sell by date Sell by date Sell by date Sell by date Sell by date 3 Size / weight / volume Promotion Ingredients Origin (country or region) Ingredients 4 Promotion Ingredients Size / weight / volume Ingredients Size / weight / volume 5 Ingredients Size / weight / volume Origin (country or region) Size / weight / volume Healthy Option e.g. low fat 6 Healthy Option e.g. low fat Healthy Option e.g. low fat Organic Healthy Option e.g. low fat Promotion 7 Type / variant / flavour etc Origin (country or region) Healthy Option e.g. low fat Organic Origin (country or region) 8 Origin (country or region) Nutritional labelling Promotion Nutritional labelling Nutritional labelling 9 Nutritional labelling Type / variant / flavour etc Nutritional labelling Environmental benefits Type / variant / flavour etc Product description & Product description & Product description & 10 Environmental benefits Promotion benefits benefits benefits Health concerns (allergens, 11 Range available Range available Type / variant / flavour etc Type / variant / flavour etc food intolerances) Product satisfaction Product description & Product description & 12 Environmental benefits Range available guarantee benefits benefits The industry has underestimated the extent of specific needs driven shopper information Implications requirements. These unmet needs represent substantial opportunity to influence choice 19 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

4. Individual needs rule – introducing the Information Seeker (cont’d) The types of information vary by individual need in both content and priority Responding to shopper concerns and influencing their behaviours Case study: One example of a successful industry response to green shopper concerns and its implementation is plastic bag usage and wastage in stores. The message from shoppers was simple and clear, and the industry took steps worldwide to reduce the number of plastic bags in circulation and explain why they were doing so. As a result the number of stores offering free plastic bags has significantly decreased, by up to 90 per cent in some countries, and the number of shoppers buying ‘bags for life’ has increased. [i] Food Matters, BBC News, Feb 2009 Case study: A leading South African retailer runs diabetes tours around its stores with dieticians for customers who have diabetes so they can understand what products are suitable. 20 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

5. The influence of the category – drivers of engagement Level of engagement impacts the type and importance of information used We used shoppers’ expression of the importance of making the ‘right’ decision (i.e. selecting the most appropriate product) as an objective measure of level of engagement Engaged Not engaged % 76 75 66 61 60 57 54 54 53 48 48 44 42 40 2 2 2 3 4 4 2 4 4 8 5 6 12 10 poultry or fish Household Alcoholic Fresh fruits/ chocolate, Frozen food Canned food Bakery Soft drinks vegetables Pet food Packaged Chilled foods Beauty items Fresh meat, products Sweets, drinks snacks Dairy products Health & foods items In prioritising information needs to empower shopper choice, retailers should focus on the most Implications engaged categories. Manufacturers in the least engaged have the greatest need to differentiate 21 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

6. A multi-sensory experience – it’s not just about words & numbers Images, touch, smell and taste are all parts of the shopping process “Your eyes tell you about quality, “We have seen an increased trend in “We have done retina scanning you don’t need plastic packaging to people wanting to see the actual to see what shoppers actually tell you.” product they are buying. Some of our look at – it’s colour/shape/ Consumer - Qualitative research ready-made meals now have an logo/brand that’s most important” open format (packaging with a clear window) where shoppers can see the International Household and actual food and that it is ready to Food Product Manufacturers cook” UK retailer Five senses In better informing shopper choice, non-textual and non-numeric information has a major role to Implications play, for example through the wider use of standard logos to indicate dietary compatibility 22 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

6. A multi-sensory experience – it’s not just about words & numbers Images, touch, smell and taste are all parts of the shopping process Colour as a representation or symbol of the nature of the product Case study: Product colour coding Milk is colour coded according to the fat percentage. This provides consistency for consumers so they know what milk they like, without necessarily knowing the exact fat percentage. Cigarette manufacturers also use colour coding in a similar manner. A single colour on a pack can instantly communicate a brand or type of cigarettes. Soft drink companies have similarly used colour coding to distinguish the different types within a same range e.g. light vs. standard 23 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

7. A plethora of information – confusing the shopper Shoppers don’t understand and hence ignore certain types of information “Do we really need a nutritional label to tell us that triple layer double chocolate cake is bad for us.” Consumer research “This is an example of very good and clear information. I wish more did that” Consumer research There are substantial opportunities to improve shopper communication effectiveness through Implications rationalisation, simplification and education about existing labelling schemes 24 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

7. A plethora of information – confusing the shopper Shoppers don’t understand and hence ignore certain types of information One logo – One message adopted across different markets reinforcing the strength of the message and trust in the proposition Using the letter “V” as a symbol, vegetarian labels are clear and Freedom Foods are available in numerous consistent across various countries. The raw produce is farmed according manufactured products or retailers to strict animal welfare standards. In Australia and Asia Pacific the products are brought to market by a distributor called Freedom Foods Australia Hong Kong Taiwan UK 25 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

8. Communications that work – it’s not ‘one size fits all’ Receptivity to different communication methods varies by market In some European countries, shoppers actively use store leaflets or retailer coupons when planning their grocery trips to help decide where to shop and what to buy Checked cupboards or refrigerator Wrote a shopping list Made a mental shopping list Asked other household members Looked at store special offers leaflet Collected/checked that I had coupons Looked at the website of this store 53 49 49 47 46 43 44 42 41 40 39 37 33 34 33 33 32 33 32 32 % 29 30 27 27 27 26 25 24 25 22 22 21 20 19 18 18 10 9 10 7 3 4 4 4 4 3 2 2 Total GB France Germany Spain Sweden Romania While there may be longer term opportunities to influence the types of communication shoppers Implications are most receptive to, in the near-term it is important to recognise national customs 26 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

9. The journey – integrating out-of-store with in-store Shoppers link information throughout their journey to inform their decisions Pre Store Shop the Store • In-store Signs • Advertising • Store Announcements • PR • Staff • Direct Mail • Additional Displays • Word of Mouth Need • Previous Experience Pre-Store Shop the Store Consume Shop Shop the Category Search & Select Search & • Brand Logo Select • Colour • Writing on Pack • Picture on Pack Shop the Category Purchase • Category Dividers • Symbols on Pack • Product Blocking • Position on Shelf • Location in store • Sampling • In-store Signs • In-store TV 27 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

9. The journey – integrating out-of-store with in-store (cont’d) Shoppers link information throughout their journey to inform their decisions Whilst advertising and direct mail are important sources of information when choosing a store, they are also important sources influencing shoppers when selecting a product Before In Store 46 Choosing a store Browsing a category Selecting a product 32 25 25 29 27 23 23 24 23 23 23 21 20 21 19 21 21 19 19 19 17 20 19 20 16 18 17 17 16 16 18 15 15 13 11 11 5 3 % a nd s ts /co eg et o s he lf g ac k tore ts re TV ip l ing he.. . to ... r. .. r .. y ... y i... el /lo g p... rti sin me n ... ... so rsh lou r a ries o mbe le afl e on p a mp i on o s in s e .g. v ts dis te gor s on d itio n i spl a t to t n on In sto Adv e u nce d la b Spo n a me uct s ng n , co in sto mag e n dat o ste r t vi si l e.g . o duc nt/c a of a d os iti o p ac k in ad Writ i an no Bran Prod mm e s kin g des ig g l as s or p t m ai a r pr re s/i rtme i ons uct p s on la ys t ion Sto re Rec o By a Durin Pic tu M ent Sim il Depa Direc Pac k Lo ca Dis p Sig n Sig n Prod Retailers should align out-of-store messaging with activation in store to optimise effectiveness. Implications For manufacturers, collaboration with retailers to achieve such alignment is vital. 28 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

9. The journey – integrating out-of-store with in-store (cont’d) Shoppers link information throughout their journey to inform their decisions Integrated 360 degree campaign to influence shopper choice Case study: ‘Try something new today’ – Sainsbury’s UK The 'Try Something New Today' campaign aims to inspire customers to think beyond their normal range of products. The new identity was executed across all areas of the company's operation. The new strapline was brought to life throughout the company featuring in everything from television advertising to the website, and in- store displays to till receipts and delivery lorries. The advertising, featuring a celebrity chef, reached a broad audience and achieved sales uplift particularly for products featured, for example sales of whole nutmeg increased from 1,400 jars to 6,000 a week after the chef used it as seasoning for pasta. More than seven million customers are also collecting the in-store 'tip cards'. The campaign has recently included messages targeted at Information Seekers such as detail on recycling of product packaging and provenance of products. 29 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

10. The role of technology – making shopping easier Technology will play an increasingly important role in the shopping process While most shoppers found it hard to imagine using new tools, smart carts and mobile phones were identified as having the most promise in improving the shopping process Smart Carts 37 Scan a product using Mobile 28 Phone Biometric Payment Fingerprint 25 Collaborative NPD Websites 24 Networked Shopping 23 Group Buying by Consumers 23 % Holographic Sales Assistant 19 Product Information via Mobile Phone 18 Shopping by Mobile Phone 17 Shopping ‘Social Network’ Website 16 30 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

10. The role of technology – making shopping easier (cont’d) Information Seekers are more engaged with multiple communication tools – they will be early adopters of new technology Organic Green Vegetarian 1. Smart Cart 1. Smart Cart 1. Collaborative NPD 2. Collaborative NPD 2. Collaborative NPD Websites Websites Websites 2. Smart Cart How 3. Mobile Concierge 3. Mobile Concierge 3. Group Buying 4. Group Buying 4. Group Buying 4. Mobile Concierge • Smart Cart 5. Shopping Social Network 5. Extended Packaging 5. Shopping Social Network • Extended Packaging 1. Direct Mail New Tools 1. Direct Mail 1. Direct Mail 2. Digital shelf labelling 2. Supermarket Websites 2. Targeted Emails • Collaborative Websites 3. Supermarket Websites 3. Digital shelf labelling 3. Digital shelf labelling • Mobile Concierge 4. Targeted Emails 4. Targeted Emails 4. Supermarket Websites 5. Scanning kiosks 5. SMS 5. In store TV • RFID Linked Packaging • Direct Mail Heart Disease Food Intolerance Established • Supermarket Websites 1. Smart Cart 1. Collaborative NPD Websites Tools 2. Mobile Concierge 2. Smart Cart • Digital shelf labelling 3. Group Buying 3. Mobile Concierge • Targeted Emails 4. Collaborative NPD Websites 4. Extended Packaging 5. Extended Packaging 5. Group Buying • Other Websites 1. Direct Mail 1. Direct Mail 2. Targeted Emails 2. Digital shelf labelling 3. Supermarket Websites 3. Supermarket Websites 4. Other Websites 4. Scanning kiosks 5. Online customer service 5. Targeted Emails Information Seekers represent an attractive segment to test new approaches to information Implications delivery on-demand to meet the specific needs of different individuals 31 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Findings In summary - 10 key themes emerged from the research 1. Patterns of information use – A hierarchy of needs A hierarchy of needs 2. Shopping on autopilot – The appetite for information 3. Changing habits is hard – But ‘behaviour breakers’ exist 4. Individual needs rule – Introducing the Information Seeker 5. The influence of the category – Drivers of engagement Drivers of engagement 6. A multi-sensory experience – It’s not just about words and numbers 7. A plethora of information – Confusing the shopper Confusing the shopper 8. Communications that work – It’s not ‘one size fits all’ 9. Shopping is a journey – Integrating out-of-store with in-store 10. The role of technology – Making shopping easier Making shopping easier 32 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Informing Shoppers We developed a series of hypotheses as to the factors that influence shopper information use Hypothesis Proved Socio-economic segmentation Specific health / dietary needs and age Occasion / shopper mission Product category Retail format Other specific consumer interests and concerns Developed versus developing markets Some of these hypotheses were confirmed, many were disproved 33 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

So what does it all mean? The straightforward needs of most shoppers should be considered along with the opportunity to engage shoppers on a ‘third dimension’ Findings Implications Ability to strengthen retail There is an opportunity to engage shoppers more strongly on dietary, health and 1. environment related issues and needs as an additional ‘third dimension’ proposition Less focus on price Shoppers with the most differentiated information needs and are most engaged in Opportunity to engage with 2. seeking information are those with specific dietary needs, those who care about average spend shopper their health and those who are concerned about the environment segments These groups represent a substantial and growing portion of the population in the Long term higher margin 3. countries surveyed, with for example 40% of shoppers looking to meet specific growth opportunity dietary needs Currently the industry lacks consistent ways of measuring, capturing and Educate shoppers 4. communicating nutrition, dietary, health and environmental impact related Harmonise information information within and across markets 5. Underlying data and labelling standards need to be established Establish industry standards The right governance and processes to ensure the integrity of the information Establish industry wide 6. involved also need to be established governance and processes There is a need for collaboration across the industry to promote the development CEO forum to sponsor 7. and adoption of the standards required manifesto for change 35 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

The ‘third dimension’ There is an opportunity to engage more strongly with shoppers on a third dimension beyond price, promotion, assortment and quality What • Healthy Option • Organic Product • Nutritional Label Benefits • Environmental Benefits Specifics • Specific Health Needs PROMOTION Targeted • Ingredients PRICE & Information • Type / Variant / Product Flavour Strategy Attributes • Origin • Product Description • Range • Product Name .g. ” (e Essentials • Price N Product ID QU ALI SIO eds, • Sell By Date T EN n e Basic Info Y DIM etary t) Basic RD di • Weight I , en • Promotion “TH ealth vironm h en Legend: Mainstream Information Seekers – the ‘Third Dimension’ 36 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Addressing the third dimension – shopper information strategy Developing a strategy that is right for your business requires analysis and aggregation of the information needs of your shoppers 1. Shopper 2. Shopper 3. Implementation segmentation information strategy strategy and requirements 2.1 Customer information strategy 1.1 Shopper 3.1 Standards segmentation 2.2 Product information strategy 1.2 Shopper information 3.2 Execution needs analysis 2.3 On-pack Information 1.3. Requirements integration 2.4 In-store 3.3 Enablers communication 2.5 Wider customer communication & education Overall retailer business / channel positioning and strategy 37 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Broader implications for the industry The potential desire to implement more advanced shopper information strategies has substantial implications 1. Shopper 2. Shopper 3. Implementation segmentation information strategy strategy and requirements 2.1 Customer information strategy 1.1 Shopper 3.1 Standards segmentation 2.2 Product information strategy 1.2 Shopper information 3.2 Execution needs analysis 2.3 On-pack Information 1.3. Requirements integration 2.4 In-store 3.3 Enablers communication 2.5 Wider customer communication & education Overall retailer business / channel positioning and strategy 38 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Broader implications for the industry The primary shopper research highlights a number of needs Individual retailers & manufacturers Industry Develop and Harmonise Educate Clarify adopt widely* • Health related • Specific • Clear “suitable for” • Data and labelling claims, e.g.: sustainability information, e.g.: standards e.g.: – Low in accreditations, – Diabetics – Environmental impact, for saturated fats e.g.: – Vegetarians example: resource – Low in – Carbon trust – Vegans consumption, resource cholesterol seal of – Specific dietary consumption off-sets, – “98% fat free approval intolerances production regime – Rainforest – Religious compliance • Nutritional alliance persuasions – Dietary compatibility, for content, e.g.: – Fairtrade example: “suitable for”, – RDAs – Marine • Consistent and allergen presence / risk – Traffic lights stewardship council meaningful – Ingredients and – RSPCA/SPA environmental provenance: extended • Provenance: approved impact information: information about each – Local – Carbon footprint ingredient, provenance/ – Produce of – Water usage source data, preparation country A – Offset percentages * Which does not mean that the average shopper wants even more labelling on pack 39 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

A manifesto for enhanced industry standards The implications for product information management are substantial • Implications for industry wide product information management and data synchronisation: – Origination – Infrastructure and tools – Validation – Data standards – Publishing – Governance – Maintenance - Global data synchronisation concept - Global Catalogue Item Registry Subscription Catalogue Item Registry Catalogue Item Subscription Catalogue Source Catalogue Item Notification Recipient Catalogue Item Item Publication Data Pool Data Pool Subscription Catalogue Item Confirmation Catalogue Item Catalogue Item Catalogue Item Publication Catalogue Item Notification Confirmation Confirmation Food Retailer supplier 40 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

A manifesto for enhanced industry standards The business case is likely to be compelling Shopping experience Operational opportunities Shopper Point of Supply Invoice & Choice Purchase Chain Payment Improved store Reduced price Improved Improved checkout discrepancies to product accuracy of efficiency to streamline information to dimensions to improve customer administration and empower enhance handling satisfaction and minimize lost shopper choice productivity reduce costs revenues Product Ingredients Barcode/GTIN Weight Price Schedules by Nutrition Labeling Product Description Height, Length, Width Store, Product, and Country of Origin Unit Price Packaging Hierarchy Date Allergic Reactions Promotions and Location Identifier Volume Discounts Dietary Needs Coupons Trade Promotions Compliance 41 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

A manifesto for enhanced industry standards This is not easy, proactive industry leadership will be essential and it will take time Need for industry sponsorship of a “Manifesto for change” • Leading retailers and manufacturers through the The development and subsequent adoption of a relevant industry association(s), most likely the new generation of labelling and underlying data Global CEO Forum in the context of the new standards requires proactive industry industry association landscape leadership and the active involvement of a • Relevant standards bodies, most notably GS1 number of different stakeholder groups: • Relevant NGOs and advisors. Establish industry-wide governance and processes • Labelling and underlying data standards required It will be necessary to establish a working party • Associated processes and governance drawing on these various stakeholder groups to arrangements progress the development and agreement of: • Requirements for supporting infrastructure. 42 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

There is plenty to get on with the meantime! Many will not want to wait in better informing shopper choice through more relevant and timely information - Universe of Respondents - Organic Dietary needs shoppers 40% 23% Green shoppers Smart 17% Shoppers 69% Quality Seekers 29% Not engaged 8% Health conscious 50% Necessity shoppers 79% How will we better communicate with shoppers regarding their information needs and desires, both away from the store and at the point of sale? 43 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Informing Shoppers Relevant and timely information to empower shopper choice How to get a copy of the report: The report will be available from July 2009. You can download a copy of the report by going to www.ccrrc.org and following the link to Europe. 44 Relevant and timely information to empower shopper choice ©2009 Deloitte LLP. Private and confidential

Informing Shoppers

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