DRIVING RETAIL SUCCESS IN A CHANGING WORLD James Russo - SVP Global Consumer Insights
THE WORLD HAS CHANGED 2 Copyright 2013 The Nielsen Company. Confidential and proprietary.
THE WORLD HAS CHANGED...PERMANENTLY 3 Copyright 2013 The Nielsen Company. Confidential and proprietary.
AND THE OPPORTUNITIES ARE IMMENSE $450 TRILLION $35 trillion $45 trillion $62 trillion 2010 2015 2020 Source: Nielsen Demand Institute 4 Copyright 2013 The Nielsen Company. Confidential and proprietary.
LETS GET TO KNOW THEM A LITTLE MORE CLOSELY.
GLOBAL CONFIDENCE HAS NOT RETURNED Global Consumer Confidence Index 102 94 84 77 85 90 90 92 89 88 89 94 91 92 91 Copyright 2013 The Nielsen Company. Confidential and proprietary. 2H'06 2H'07 2H'08 Q1 2009 Q3 2009 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Source: Nielsen Global Omnibus Consumer Confidence Survey 4Q2012 6
EMERGING MARKETS LEAD, DEVELOPED MARKETS LAG Global Consumer Confidence Index Copyright 2013 The Nielsen Company. Confidential and proprietary. 92 91 AP AP 101 100 MEAP MEAP 98 96 Source: Nielsen Global Omnibus Consumer Confidence Survey 4Q12 vs 3Q2012, movers LA 96 94 NA NA 91 90 EU EU 74 71 7
Copyright 2013 The Nielsen Company. Confidential and proprietary. CONSUMERS ARE GLOBAL TOP GLOBAL CONCERNS ECONOMY 15% JOBS 15% WORK/LIFE BALANCE 9% PRICES 8% HEALTH 7% Source: Nielsen Global Omnibus Consumer Confidence Survey 4Q2012 8
Copyright 2013 The Nielsen Company. Confidential and proprietary. AND LOCAL TOP COUNTRY CONCERNS USA ECONOMY SPAIN JOBS BRAZIL WORK/LIFE LITHUANIA HEALTH INDONESIA GLOBAL WARMING ARGENTINA CRIME CHILE/ LITHUANIA EDUCATION ESTONIA UTILITY PRICES Source: Nielsen Global Omnibus Consumer Confidence Survey 4Q2012 9
Copyright 2013 The Nielsen Company. Confidential and proprietary. CLOSE TO 20% OF GLOBAL HOUSEHOLD SPENDING IS ALLOCATED TO FOOD AND BEVERAGES NA Housing 50% 24% Food & Bev 21% Comm Srvs 10% LA 51% Food & Bev 21% 58% Education 12% Housing 12% EU Housing 23% Food & Bev 21% Comm Srvs 8% MEAP Food & Bev 16% Education 11% Housing 11% 53% AP Food & Bev 14% Savings 12% Housing 9% Source: Nielsen factors that impact how we grocery shop worldwide Aug 2012 10
Consumers are similar yet Diverse Demanding Connected Emerging
Copyright 2013 The Nielsen Company. Confidential and proprietary. CONNECTED COUNTRIES - INTERNET PENETRATION COUNTY RANK 1 st 9 th NORWAY UNITED KINGDOM 15 th 21st 35 th 47 th 58 th UNITED STATES CZECH REPUBLIC CHILE CHINA INDIA Source: internetworldstats, Q32012 12
Copyright 2013 The Nielsen Company. Confidential and proprietary. WITH FEW EXCEPTIONS, ONLINE PURCHASES CONTINUE TO INCREASE Apparel/ Shoes/jewerly 37% +1 pt Ebooks/ DIGITAL MAGAZINES/NEWSPAPERS 37% +1 pt AP FOOD AND BEVERAGE 37% Entertainment Tickets 30% +10 pt MEAP 18% Computer/ Game software 29% +18 pt LA 16% Travel Services 30% -2 pt NA EU 15% 14% Food and Beverage 26% +8 pt Source: Nielsen How digital influences how we shop: Aug 2012Q1 2012 Q1 2010 13
Copyright 2013 The Nielsen Company. Confidential and proprietary. ADVERTISING DOLLARS GOING AFTER THE GROWTH NA Global Ad Spending percent growth Jan-Sept 2012 vs Jan-Sept 2011 Ad Spending 5% EU Ad Spending -3% AP LA LA Ad Spending 6% ME/Afr Ad Spending 19% Ad Spending 3% TV and Internet advertising +30% Source: Nielsen Global Adview Pulse 3Q2012 14
Copyright 2013 The Nielsen Company. Confidential and proprietary. GLOBAL RETAIL SALES DRIVEN BY EMERGING MARKETS Fast Moving Consumer Goods market dynamics 13,5% 12,9% 15,7% 10,1% 7,3% 60 COUNTRY AVG 4,7% 3,5% BRIC APAC SA MEAP WEST EUR NA APAC - Australia, China, Hong Kong SAR, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, and Vietnam. Middle East/Africa - Kuwait, Lebanon, South Africa, Saudi Arabia, UAE, Morocco, Egypt, Jordan Western Europe - Austria, Belgium, Czech Rep., Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, Turkey, UK. South America Brazil, Argentina, Mexico 2Q12 Global Growth reporter - Fast Moving Consumer Goods market dynamics 15
Copyright 2013 The Nielsen Company. Confidential and proprietary. ACROSS EUROPE, UNIT SALES LAG DOLLAR SALES ACROSS MANY COUNTRIES 5,8% 6,0% 7,7% 10,2% 2,1% 2,2% 2,5% 2,5% 2,6% 2,6% 2,6% 2,8% 2,8% 3,1% 3,8% -3% 0,4% 0,4% -0,3% -2% -3% -5% 0,9% 1,5% -2% 2% -2% 0% 0% 1% 0% 2% 2% 4% 1% 1% -2% 4% 1% 3% -2% -4,2% Unit growth Dollar Growth 3Q12 Global Growth reporter - Fast Moving Consumer Goods market dynamics 16
Success is about reaching the consumer where they are... and are going to be.
GLOBAL PRODUCT INNOVATION Reviewed 35 years of new product concepts Over 175,000 concepts were tested across 73 countries between 1978-2012. Copyright 2013 The Nielsen Company. Confidential and proprietary. 1978 2012 18
Copyright 2013 The Nielsen Company. Confidential and proprietary. 2012 COUNTRY DRIVERS Stand-out innovators in each region US 95% Brazil 49% Mexico 34% 47 45 Russia 78% Poland 18% 16 19 10 9 23 19 35 1978 2008 >1 1 South Africa 63% Nigeria 29% Kenya 4% UK 38% France 19% Germany 16% 1 Saudi Arabia 54% Egypt 31% Pakistan 8% 2012 China 33% India 16% Japan 13% 19
Capture consumers where they are because you are going to be seeing them less often
Copyright 2013 The Nielsen Company. Confidential and proprietary. SHOPPERS ARE MAKING FEWER TRIPS USA -2.4% MEXICO -1.6% UK 1.9% SPAIN 0.6% GERMANY -2.5% ITALY 1.4% COLOMBIA -1.5% SOUTH AFRICA -1.6% AUSTRALIA -5.3% Source: Nielsen Homescan, All Outlet, 9 months ending Sept 2012 vs year ago, Purchase Occasions 21
RETAIL TRIPS ARE EVOLVING. TO CORNER STORES TO VIRTUAL STORES BIG BOX TO ONLINE TO SMART PHONES 22 Copyright 2013 The Nielsen Company. Confidential and proprietary.
Copyright 2013 The Nielsen Company. Confidential and proprietary. AS ARE THE TOOLS TO ACHIEVE GROWTH Facial recognition New system in Japan that tracks shoppers faces to estimate their gender, age, and visiting frequency. 23
BUILDING ON A NEW RETAIL FOUNDATION FIXED MODEL Brick & Mortar Set Pricing Supply Economy Boundaries Traditional Media
BUILDING ON A NEW RETAIL FOUNDATION FLEXIBLE MODEL Varied Distribution Points Negotiated Pricing Demand Economy Boundless Traditional & New Media
A MODEL WHERE THE INDIVIDUAL INFLUENCES THE MASSES 26 Copyright 2013 The Nielsen Company. Confidential and proprietary.
Copyright 2012 The Nielsen Company. Confidential and proprietary. 27
RETAIL SUCCESS IS NO LONGER LINEAR.. AUDIENCE STORE SALES 28 Copyright 2013 The Nielsen Company. Confidential and proprietary.
IT IS INTERCONNECTED ONLINE SHOPPING STORE APP E-COMMERCE AUDIENCE INFLUENCERS SALES TABLET SOCIAL MEDIA MOBILE ONLINE CROSS-PLATFORM 29 Copyright 2013 The Nielsen Company. Confidential and proprietary.
RETAIL SUCCESS IS REACHING CONSUMERS IN INNOVATIVE AND FLEXIBLE WAYS Accessibility Availability Customizable Connectivity Mobility 30 Copyright 2013 The Nielsen Company. Confidential and proprietary.
IT S TIME TO ACT DIFFERENTLY KEYS TO RETAIL SUCCESS: 1 2 UNDERSTAND THAT OUR CONSUMER IS CHANGING MACRO AND MICRO FORCES ARE CREATING UNIQUE SET OF CHALLENGES AND OPPORTUNITIES 3 WE ARE MOVING FROM A FIXED TO FLEXIBLE RETAIL MODEL
DRIVING RETAIL SUCCESS IN A CHANGING WORLD James Russo - SVP Global Consumer Insights