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Innovation in Retail. Shane Daly Head of Retailer Services May 6 th , 2014. Innovation in Retail. Success in Innovation. Retail Evolution – Discounters in Ireland. Global Retail Innovation. Prepared for: [Client Name] Source: XXXXXX. Success in Innovation. “. ”.

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    1. Innovation in Retail Shane Daly Head of Retailer Services May 6th, 2014

    2. Innovation in Retail Success in Innovation Retail Evolution – Discounters in Ireland Global Retail Innovation Prepared for: [Client Name] Source: XXXXXX

    3. Success in Innovation

    4. ” If I had asked people what they wanted, they would have said faster horses Henry Ford

    5. Continuous investment in understanding Innovation Process Excellence Integrated end-to-end Innovation Process Nielsen’s Innovation framework is designed around principles of successful innovation

    6. What drives success? Three initial hypotheses: • Have an innovation emperor • Remove the constraints • Get more ideas

    7. How to succeed at innovation? Innovation Process Marketing Execution Consumer Centric

    8. Innovation Process

    9. Three Keys for a successful Innovation Process Innovation Process Create a Culture of Learning Manage Ideas Lightly Manage Process Precisely

    10. Consumer Centric

    11. The Most Successful innovations Address Emerging and Latent demand CURRENT DEMAND EMERGING DEMAND LATENT DEMAND Who? Why? What? How much $$? Identifying Demand Opportunities Building a Strategy around Demand

    12. 12 things every new product must do to succeed

    13. Salience: Successful new products stand out from the competition Distinct proposition Attention catching Offer true innovation Get noticed

    14. Communication: Successful new products communicate an understood, concise and persuasive message Message connection Clear and concise message Land your message Communicate with focus

    15. Attraction: Offering an attractive benefit to consumers Need/Desire Advantage Credibility Acceptable Downsides Be relevant Be better Give enough reason to believe Limit the battles

    16. Point of Purchase: In the store Findability Acceptable Costs Be in the right places Win the value equation

    17. Endurance: After purchase Product Loyalty Product Delivery Deliver on product promises Be strong in the long run

    18. You are only as strong as your weakest link • Overall success is heavily drivenby the “weakest link” • In-market success is not about doingone thing really, really well • Rather, it is about doing everythingyou need to do well

    19. Marketing Execution

    20. Marketing Execution Ensure pack stands out • Awareness • In-Store • TV • Distribution Right Store Location Best Shelf Location

    21. Make sure volume is incremental Be Distinct from your Parent Don’t borrow support from your Parent Brand Don’t down trade consumers Gain incremental distribution and shelf space X

    22. Place your bets wisely • Continue to invest & support in year #2 • Don’t bet on every horse in the race, choose the horse with the best chance, and place larger bets.

    23. Innovation in Retail Success in Innovation Retail Evolution – Discounters in Ireland Global Retail Innovation Prepared for: [Client Name] Source: XXXXXX

    24. Retail Evolution – Discounters in Ireland 24

    25. STORE RELATIONSHIP TIERS Other Spont. Prompted TOM Ref: Q11abcd/Q12a/Q13abcd

    26. STORE RELATIONSHIP TIERS – 2011 - 2013 Lidl 2011 - 2013 Aldi 2011 - 2013 Base: All Supermarket shoppers 2011 (n=959), 2012 (n=988), 2013 (n=998) Ref: Q11abcd/Q12abc/Q13abcd

    27. Discounters reach 15% value share But are performing better in many categories, and are growing rapidly. FMCG channel value share of trade Total FMCG is valued at €15.1 billon Total value +1.1% | Total units -0.3% Strategic Planner | MAT to Feb 2014 | Scantrack/Market Track incl Discounters & Dunnes| VALUE

    28. Which is the “lowest price store”? The discounter message on prices continues to gain traction with shoppers. Base: All HM/SM shoppers, 2011(n=959), 2012 (n=988), 2013 (n=998) Ref: Q20 Nielsen Shopper Trends 2013

    29. Discounters increasing share of voice Continuing to out-spend their market share markedly, particularly on TV. +2.6pts +0.7pts Lidl +25% TV +78% Press -6% Aldi +21% Press +5% TV +59% 1. 2. 3. 7. 4. 5. 8. 6. Source: Nielsen AdDynamix: Supermarket Ad Spend ranked by Top spenders 12 months to Feb 2014 – Defined Supermarkets as per list above (TV, Press, Radio, Outdoor & Cinema)

    30. Where are you on the Change discounter curve?

    31. Discounters Entered the Market in 1999/2000 Turnover now approaching €2.25 billion “I hate shopping for groceries.……as for Lidl, I find it depressing. I wish they'd play music in the background or something.” Robert Foster 2002; Discounter Store Numbers 1999 - 2014

    32. Curious / Bulk Buy

    33. ” I find if you stick to the foods Germans like : beer, wine, cheese, cold meats etc., or inedible things like household cleaners, both Aldi and Lidl are fine. Going for anything like beans is russian roulette. Anything that has a fake-o lookie-likie label is also to be avoided. Newgrange Jan 2004,

    34. ” “What do you think of these shops? Do you shop there on a regular basis - I get all my cleaning products there and a couple of food items” Dellgirl : June 2005 “I tend to buy the odd bit of tools there and maybe some juice and other stuff” FX Meister : June 2005 “Lidl sell this really bitchin' chocolate so they do. It's considerably cheaper than its counterparts and actually tastes better than most too” grimloch : June 2005

    35. Shopping List Sugar Bread Heinz ketchup Carrots Coconut Milk Pepsi Eggs Deli ham Soda bread Pampers Milk Pedigree chum Tinned tomatoes Lotto Trialists

    36. ” “I went to ‘xxxx’ yesterday and picked up a very small shop ……. it came to €79, I know for a fact I’d have gotten the same in Lidl for under €50 I shop in Lidl a lot and most of their products are great Ladypip Jan 2011

    37. Shopping List Sugar Bread Heinz Tom Sauce Carrots Coconut Milk Pepsi Cola Eggs Deli ham sliced ham Soda bread Pampers Nappies Milk Pedigree chum Dog Food Tinned tomatoes Lotto Converted (Cheerleaders)

    38. Innovation in Retail Success in Innovation Retail Evolution – Discounters in Ireland Global Retail Innovation

    39. Global Retail Innovation 39

    40. Retail Process – Innovation at each stage, not just the product

    41. Innovation in Marketing

    42. Innovation in sustainability & supply chain

    43. Innovation at the point of purchase

    44. Innovation at the point of purchase

    45. Innovation at the point of purchase

    46. Innovation in Payment

    47. Innovation in Product delivery

    48. Innovation in Retail Success in Innovation Retail Evolution – Discounters in Ireland Global Retail Innovation

    49. Success in innovation is not about doing one thing really, really well. It is about doing everything you need to do well • Discounters have thrived during a recession but will be keen to hold what they have and grow further in better times • Innovation has been accelerated by the internet and is evident across all stages of the supply chain model. We live in a global market Innovation in Retail

    50. Innovation in Retail Shane Daly Head of Retailer Services May 6th, 2014