The materials herein are proprietary to Willard Bishop may not be copied, reproduced or disclosed in any manner without prior written permission from Willard Bishop. Copyright © Willard Bishop, 2013. All rights reserved. Any logos, design marks, company names or product names contained herein are the sole property of their respective owners.

Craig RosenblumPartner

MANUFACTURERSRETAILERS

Willard Bishop | Snapshot

DATA PRODUCTS AND OPTIMZATION TOOLS

DATA PRODUCTS AND OPTIMZATION TOOLS

Activity Based Costing Retail Pricing/Promotion Strategies

Localization Strategies Shopper Relevancy

eCommerce Channel Development

Collaborative Performance Product Positioning

Willard Bishop | Practice Areas and Productssample list only

Everybody Please Stand Up

Please sit down if you’ve ever purchased from:

Please sit down if you’ve ever purchased from:

Two Companies. 100% Market Penetration.A Gazillion Dollars.

How are we to compete?

Only Two Ways to Compete

Price

PriceDifferentiation

How to Differentiate

eCommerce

Service Levels

Quality

Assortment

Offers

Pricing

Formats Targeting

Prepared Foods

Change in Behaviors

• Less brand loyal

• Very price-conscious…but willing to pay up sometimes

• Convenience-driven and very social/connected

• Fresh, N&O and Specialty appeal

• Still like their brick-and-mortar, traditional supermarkets

• Down-sizing households

• Eating less, but eating healthier

• Local products and community’s importance grow

Shifting Formats Non-Traditional is the Only Growth Segment

Supercenter45%

Warehouse Club22%

Drug14%

Mass12%

Dollar6%

Military 1% +5.1%

Traditional Convenience Non-Traditional

90% 50% 48% 47%

8%

16% 15% 14%

2%

34% 37% 39%

Dollar Share by Channel*(Rounded)

+5.7%

+4.5%

+9.6%

+2.7%

+3.1%

Breakout of Non-Traditional with Growth Percentages

* Excludes eCommerceSource: Willard Bishop, The Future of Food Retailing; June 2013

Get Ready for the Next TLA

Shopper Driven Merchandising

Shopper Driven Merchandising Current Focus is on the How

Loyalty CardEmail

Snail Mail

In-Store

Personalized

Coupons

Mobile InternetCirculars

The Value of SDM is in the “What”

• Pricing and Promotion

• Product Assortment

• Format

• Space Allocations

Household-Oriented Merchandising

Leading Change Agents

• Understanding the Digital Consumer

• Social Media

• Responsive eCommerce

• Prepared foods

• Fresh, natural and organic

• Less brand loyal

• Limited assortment

• Extreme value formats

The Millennial’s BFF

It takes 26 hours for the average person to report a lost or stolen wallet.

It takes 68 minutes for them to report a lost phone.

Did you know?

Source: Unisys

Going Mobile

There are 6.8 billion people on the planet.

5.1 billion of them own a cell phone.

Did you know?

Source: Mobile Marketing Association Asia

4.2 billion own a toothbrush.

Speed Counts

of all mobile searches result in action within one hour

The average person responds

to email in 90 minutes

The average person responds

to a text in 90 seconds

Source: CTIA.OrgSource: Mobile Marketer

70%

Reach. Reward. Retain.

Mobile coupons get 10 times the redemption rate of traditional coupons

Source: Borrell

New Rules of Engagement

New Rules of Engagement | eMart

New Rules of Engagement | Budweiser

Beyond the Webvan Hangover

eCommerce is Getting Its Grove On

Worldwide eCommercebusiness will double to $1.5 billion

In 2 years….

eCommerce is Getting Its Grove On

eCommerce business will account for 8% of total sales

In 1 year….

Ranking Kroger’ eCommerce Business

14 Trader Joe’s Co. $10,300,000

15 Giant Eagle, Inc. $9,900,000

Other eCommerce Notables

100 Orders per WeekHigh Volume Stores

Filling 500+ Orders per Week

Offers Home Delivery

eCommerce we continue to evolve and be the price of poker for many retailers. It will put huge pressures on stores with large square footages.

Omni Channel | It’s Everywhere

&

Paper or Plastic?

ClickCollect

Inside

Curbside

Drive Thru

Wheel or No Wheel?

• Warehouse

• Dark Store

• FedEx/UPS

• Direct from Store

• Locker/Kiosk

Wait. I’m Confused!

• The endless aisle is growing

• Limited assortment formats are growing

Without Confusion there is No Growth

Growth appears on the periphery

LimitedAssortment

EndlessAisle

TRADITIONAL SUPERMARKETS

Growth is Still Viable, Provided….

LimitedAssortment

EndlessAisle

TRADITIONAL SUPERMARKETS

• You know where to look for opportunities

• You take the appropriate action once discovered

Top 7 Growth Opportunities

+3.4% Traditional Grocery

88%Disruptive New Products

17%

11%

10%

10%

7%

5%

eCommerce

Fresh Format

N&O Non-Foods

Extreme Value

Prepared Foods

Limited Assortment

Sources: Willard Bishop 2013 Future of Food Retailing, eMarketer.com, Packaged Facts,Organic Trade Association, Store Brands Decisions, & Information Resources

&

Additional Growth Opportunities

MergersAcquisitions

Mergers & Acquisitions Will Increase and Become More Diverse

Omni Channel

Integrate your path-to-market to capture sales

everywhere.

1

Disruptive NewProducts

Streamline your product

development process and

focus on truly disruptive offerings

3

Shopper Driven Merchandising

Use BI and shopper

insights to improve

merchandising decisions and

agility

52

ValueEquation

Define your competitive pillars; then pursue and

promote them relentlessly

4

Growth in Traditional Channels

Prepared foods, private label and new formats will

continue to capture growth

5 Focus Areas for 2014

Craig RosenblumPartner

Craig.Rosenblum@WillardBishop.com

847-756-3726

The mantra for 2014 is business wisdom,which is intelligence applied.