How to Leverage Multiple Sales Channels to Reach & Retain Cross-Channel Shoppers

1. How to Leverage Multiple Sales Channels to Reach & Retain Cross-Channel Shoppers Welcome! May 13, 2008

2. Before we start • Submitting questions • Submit a question at any time by using the “ask a question” module on the lower right-hand side of your console • We’ll address these questions during the 10 minute Q&A section at the end of our presentation • Technical difficulties • Click on the help button • Use the “ask a question” interface

3. Today’s presentation • Highlights from the Krillion Consumer Survey • Current retailer and manufacturer strategies • Readiness recommendation checklist

4. Today’s presenters Lauren Freedman President the e-tailing group Joel Toledano CEO Krillion

5. About Krillion What we do: Product-based local search Driving online users toin-store sales Who we work with: Leading manufacturers, retailers, publishers, and search engines 5

6. About the e-tailing group • 14 years of e-commerce consulting • Author, “It’s Just Shopping” • 50+ years traditional retail and catalog experience • Fortune 500 client projects ranging from strategic planning, merchandising, marketing, to technology development and messaging • Proprietary research studies on:mystery shopping & merchandising; marketing and multi-channel customer mindset; In-Store Pickup and Gift Registry • E-commerce expert and frequent speaker at industry events, trade associations

7. Purpose and methodology To better understand the mindset of consumers who research productsonline that lend themselves to purchase at a local store. The study highlights the role of Internet information resources, the retailer channel, and web-to-store convenience options offered online—such as in-store pickup and inventory availability—in shaping consumer purchase decisions. • Survey completed February 2008 • 1,000 consumers sampled • 50% male, 50% female • Spend at least $500 online annually • Purchase online at least 4x per year

8. Web-ready buyers are demanding • “Web-Ready Buyers” are demanding, doing their shopping “homework” well in advance of their purchase • “Web-Ready Buyers” who are predisposed to research online are willing to spend at least several days or weeks researching products • They are first and foremost problem solvers who leverage the web’s efficiencies to quickly find the right answers to their shopping needs

9. These customers leverage all channels,seeking complete information • The role of the manufacturer online has been elevated: a visit to their site is often the first stop for savvy online information seekers • The store is an integral part of shoppers’ multi-channel buying experiences • Expectations are high for Web-Ready Buyers regarding: • the number of information sources they seek out • the features they expect to see on any given site • their propensity for using in-store pickup

10. Saving time, convenience and saving money are consistently what matter most to consumers when using a local search engine to research products online To the consumer, local is getting the right price for an in-stock product at a favored retailer The ‘Local’ proposition is clear

11. Prior to buying, consumers are spendingconsiderable time online in ‘research mode’ 42 percent of shoppers spend more than half of their total shopping time researching online Q3

12. Shoppers multi-source: 72% look to the manufacturer’s website when researching major branded products online, while 54% seek out favored retailers Beyond this, shopper styles affect where consumers start their research Q6

13. Consumers are first and foremost needs-driven,with many influences triggering their searchfor online product information Word-of mouth continues to play an important rolesimilarly valued by consumers • Women are more traditional: favoring word-of-mouth, catalogs, magazines, newspapers • Men are more web-centric: embracing online promotions, banner ads and email Q11

14. Depending upon the complexity of the product category, those surveyed invest several days or even months researching prior to making a purchase Q8

15. Top 3 essential online resources:manufacturers, retailers, search engines Secondary sources include shopping comparison sites,consumer magazines online, portals/directories, and blogs Q13

16. For complex product categories,manufacturer websites are the #1 destination Q6

17. Online retail experiences take place in many ways

18. Exposing products can be facilitated via aseries of different channels and a variety of means

19. Searching is part and parcel of the user experience,where the “best” price is top of mind

20. Saving time (76%), convenience (69%), andsaving money (64%) are consistently what matter most Q17

21. For online shoppers, “local” means the right pricefor an in-stock product at a favored retailer Q15

22. Shoppers expect websites to aid in research,provide up-to-the-minute information Q16

23. To help make purchasing decisions, consumers embrace peer-based content like product reviews (84%) and consumer surveys/studies (57%) Product images (49%) and literature (48%) are expected sourcesof information that further support decision-making • Women trend higher on image and product reviews • Men care more about expert articles and videos Q14

24. Customer-centric tools foster decision-making

25. When selecting a local store to make a purchaseconsumers desire a comprehensive websiteincluding convenience-centric, store-related services Q9

26. Store promotions and services areevaluated simultaneously

27. The store is an integral part of shopper behaviorfrequently involving multiple store visits For information-intensive purchases, consumers are more apt to research online and then complete their purchase at a local store Q7

28. Store visits often start withsophisticated retail locators

29. 55% have purchased a product online for in-store pick-up, increasing the role of web-to-store activity Q4

30. Merchants extend their reach, drivingtraffic to the store via in-store pickup

31. Buyers who pick up in-store are motivated byshipping savings and convenience benefits • Among women saving on shipping is even more of a motivator as it was selected by 63% • Note: Beyond saving shipping expenses, immediate needs and convenience will always play an important role in “local” shopping *Other includes shipping not an option, out of stock online; taking advantage of a discount offered if picked up in-store Q5

32. Product locators with inventory access will serve as theultimate foundation for future cross-channel conveniences

33. Are you ready? • Comprehensive content must be in place • Category-centric tools should give customers the control they demand to swiftly satisfy and solve shopper needs • Manufacturers must extend their efforts through retail and search partners • Cross-channel conveniences should be clear to shoppers • Merchants must think about both time and cost savings when structuring multi-channel experiences Q5

34. Lauren Freedman President, the e-tailing group inc 773.975.7280 lf@e-tailing.com www.e-tailing.com The e-tailing group contact information

35. Krillion: leveraging product-based local search Joel Toledano CEO Krillion Inc

36. What shoppers care about Consumers think:“research online  buy offline” Search on Google Buy in a physical store Who carries this product near me? What does it cost? Is it in stock right now? 36

37. Search engines, shopping engines anddirectories, are not one-stop shops Search engines don’tprovide everything consumers need: product location price in-store availability 37

38. In-store pickup is already popular 2007 online sales (est.):$1.1 billion 2007 online sales (est.):$1.5 billion 55% picked up in store 40% picked up in store In-store pickup averages $60 more per customer ticket In-store pickup averages $154 more per customer ticket Source: National Retail Federation 38

39. And will become mainstream… eMarketer predicts: • Multichannel retailers will roll out more “buy online, pick up in-store” services. • Forrester Research reports 79% of multichannel retailers ensure consistent pricing across their channels. • Internet Retailer finds 75% of retailers link their e-commerce systems to their fulfillment and order management system. • Online ads remain resilient. • Video surge slows. • Social-network advertising hits $1.6 billion. • Networking goes beyond MySpace and Facebook. • YouTube decides the election. • Beijing Olympics pumps up ad spending. • Buy online, pick up in-store becomes expected feature. • Movie downloading hits the mainstream. • Music marketers roll out new business models. • Dynamic ads heighten gaming revenue potential. Source: eMarketer Inc 39

40. How Krillion enables web-to-store sales Krillion has built a huge local shopping dataset of manufacturers, SKUs, store locations & in-stock product availability – more than 700 million data elements, and growing Leads! Ready-to-buy consumers • Yellow Pages • Product reviews • Shopping sites • Widget on manufacturer websites • Search engines Local Retailers Krillion Localization EngineTM • Metadata by category • Product categories 40

41. The Home Depot case study:increased click performance • Launched: February 2008 • Objectives: • Increase click performance online with contextual marketing • Drive sales through all Home Depot offers on/offline Results: • 4x conversions to “see it” locally button • 2x average CTR on all ad impressions served 41

42. Panasonic case study:sales uplift & tighter linkage • Launched: March 2008 • Objectives: • Increase site capabilities to drive more sales to dealers • Offer real-time stock information Results: • Thousands of new views/month and growing • Double-digit conversions to “see it” locally button • Increased conversion to sale from Panasonic.com to dealers 42

43. Bridging the Internet and the store Mobile coupons will capitalize on theweb-to-store opportunity Offers sent to consumers drivein-store purchasing Micro-local targeting through location-aware technologies“ What’s next? “Mobile phones are more likely to be used in a multichannel shopping process than to generate m-commerce sales.” –Gartner Group, Feb. 2008 43

44. Three ways to work with us to growyour web-influenced sales Manufacturers: Krillion Product Locator drives revenue and directs in-store sales to dealers Retailers: enhanced placements and integrated advertising to drive in-store sales Publishers: Leverage Krillion’s product-based local search platform to increase audience engagement revenue opportunities 44

45. For more information about working with Krillion to power your product locator or support your local in-store sales efforts, contact us at sales@krillion.com 45

46. Q&A

47. Thank You!