Digital Shopping Behavior in an Internet of Everything World Overview

2. Web-based survey N = 1,174 Margin of error <3% Digital Shopping Behavior Survey Conducted Nov. 2013 Representative of the U.S. broadband population by age, income, region Source: Cisco Consulting Services, 2013 © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 2

3. 1 2  It’s a matter of trust… In-store digital concepts  …yet, shoppers  Which brands will mash- Retail and personal data generally don’t  At risk: nearly $100 billion per annum in incremental industry IoE value up the Internet and the store?  They’re waiting  Ahead: an “s-curve” leap in shopper behavior and expectations 3 Digital shopper behavior  1 in 5 shoppers is now an ÜberDigital  Say “hello” to the future…  …where mobile is the norm  Still asking if you need guest Wi-Fi? Source: Cisco Consulting Services, 2013 © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 3

4. DIGITAL MASS ÜBER DIGITALS 80% 18% Digital Research Browse Purchase Median Age 40-44 Last Year 11% Smartphone Research Browse Purchase Median Age 30-34 Source: Cisco Consulting Services Primary Research, 2013 © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 4

5. The Vast Value of the Internet of Everything Internet of Everything Retailing Sense Know Act North America Retail Unrealized Value at Stake in 2013 DATA FUSION RIGHT TIME HYPER-LOCALIZED Source: Cisco Consulting Services, 2014; n = 1,174 © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 5

6. Select up to three DIGITAL MASS ÜBER DIGITALS 80% 18% 46% 38% 30% 30% Personalized promotions via touch-screen or smartphone Personalized products specifically for me Personalized shopping lists Personalized service 53% 47% 38% 34% Source: Cisco Consulting Services Primary Research, 2014 © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 6

7. What if retailers could… DIGITAL MASS CAPTURE DATA Transactions; On-hand inventory on order ÜBER DIGITALS TO CREATE Improved in-stock 69% 27% 42% Past buys; Store location; On-hand inventory 77% 38% 44% 82% 35% Personalized digital offers 39% 37% Store traffic; Orderqueue No checkout lines 67% 26% 41% 43% Smartphone in store; Location 37% 74% 37% 80% In-store way-finding 57% 20% 37% 33% 38% 71% APPEALING VERY APPEALING Source: Cisco Consulting Services, 2013 © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 7

8. Financial Hospitals, physicians Institutions, banks However: 56% 54% Credit card companies 47% Government agencies 37% How much would you trust these companies/institutions to protect your personal data and use it to provide something you value? National retail brands 31% Internet companies 18% Source: Cisco Consulting Services, 2014; n = 1,174, Percentage answering 7 and above on a 10-point scale 1=not trust at all 10=trust completely © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 8

9. DIGITAL MASS ÜBER DIGITALS Past purchasing history with this brand 57% 59% Basic information about me (name, age, etc.) 52% 56% Likes and dislikes (opt-in) 48% 49% Information from products I am using 27% TRUST CLIFF 30% Past purchasing history from other brands 24% TRUST CLIFF 29% My location 20% 29% Source: Cisco Consulting Services, 2013 © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 9

10. Select up to three DIGITAL MASS ÜBER DIGITALS Guaranteed percentage savings on next purchase 52% 51% Specific dollar savings on my next purchase 52% 53% World-class privacy policy 39% 31% Ability to use loyalty points at more than one retailer TRUST CLIFF 24% 27% TRUST CLIFF Admission into a club that receives priority service 11% 18% Admission into a club that receives priority offers 22% 27% Source: Cisco Consulting Services, 2013 © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 10

11. DECISION JOURNEY RESEARCH PC In store DO IT NOW U.S. 2013 BUY 60% In store 39% Online PC Mobile In store Mobile Online PC 32% 26% 86% 27% 33% 23% 22% Über Digital 2013 INTERESTED 72% 66% 59% 56% 25% 84% 70% 54% 20% 92% 62% 20% 90% 24% 86% Click ’n Collect Kiosk In store 12% 35% 47% 28% 40% 68% Source: Cisco Consulting Services, 2013 © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 11

12. What are the three most important sources of information you use to help make buying decisions? Online reviews retailer website Friends and family Online reviews expert sources 60% 58% 52% Friends, family 49% 44% Online reviews Store employees Online Friends, 42% reviews family Online experts 29% Online experts Online reviews 46% 43% Friends, Online family experts 21% Store Assoc. 15% 12% Store Assoc. Store assoc. 2010 2012 2013 Source: Cisco Consulting Services, 2010-11-12-13, 2010: n = 1004; 2012: n = 1007; 2013: n = 1,174 © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 12

13. How have your expectations for shopping changed over the past two years? DIGITAL MASS ÜBER DIGITALS 80% 18% 71% 61% 58% 58% 50% Better values Price visibility Wider range Information access Faster 79% 72% 72% 75% 64% Source: Cisco Consulting Services Primary Research, 2013, percentage responding “very likely” to research a product online © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 13

15. Percentage responding frequently or always 1 2 3 4 BEST PERSONAL PRICE MOBILE CONCIERGE BEAT THE BUZZER CONNECT THE DOTS 63% 42% 35% 34% Opt-In. Smartphone. Scan. Opt-In. Smartphone. Gamification. Gamification. Calculates all your relevant offers, coupons, loyalty points. Greets, guides, provides. At home or in store. In-store. Smartphone. Interest- and location-based information, offers. PC or smartphone. Collect tokens or QR codes throughout the store. Your personal price. Now. Your retail remote control. Special promotion now in limited time. Act now and win!. Act now and win! Source: Cisco Consulting Services, 2013 (U.S. data, n= 1,174), percentage responding frequently or always © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 15

16. Percentage responding frequently or always 5 6 7 8 REMOTE CONSULTATION ENDLESS AISLE SOLUTION BUILDER SOCIAL SHOPPING 31% 29% 29% 21% Mobile or fixed screen. Online or in-store. Online or in-store. Smartphone. Social. One-click connect. Fixed screen and smartphone. Fixed screen or smartphone. Post photos. Pin ideas. No appointment. See brand’s entire inventory on desired SKUs. Suggested project shopping lists. Send to professionals, friends. Recipes. Outfits. Whaddaya think? Talk to the brand’s best. What, why, and how. Nearby stores. Dotcom. Vendor. Source: Cisco Consulting Services, 2013, percentage responding frequently or always © 2014Cisco and/or its affiliates. All rights reserved. Cisco Public 16

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