Presented by: Sara AlTukhaim Director, Retail Insights August 2014 Incrementality & Beyond: The 10 Reasons Why Getting Club Right is Good Great for Your Company Copyright 2014 Kantar Retail Copyright 2014 Kantar Retail. All Rights Reserved. 501 Boylston Street, Suite 6101, Boston, MA (617) No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photography, recording, or any information storage and retrieval system now known or to be invented, without the express written permission of Kantar Retail. The printing of any copies for back up is also strictly prohibited. Disclaimers The analyses and conclusions presented in this seminar represent the opinions of Kantar Retail. The views expressed do not necessarily reflect the views of the management of the retailer(s) under discussion. This seminar is not endorsed or otherwise supported by the management of any of the companies covered during the course of the workshop or within the following slides. Copyright 2014 Kantar Retail #1. Exposure: Selling club exposes your company to >128 million desirable shoppers. Club memberships (millions) Source: Company reports and Kantar Retail analysis and estimates (2013E) 3 *For Costco, memberships represent global cardholders and retention rate reflects US and Canada only (Costco is at 87% globally); Sam's Club does not report membership data, therefore the total estimated number of members is reported per Kantar Retail calculations and includes US and Puerto Rico 90% retention ~82-83% ~84-85% *128 million* AFFLUENT members collectively shopping club In a retail landscape where consumer attention and share of wallet is only getting harder and harder to come by, why wouldnt your company want to place its bets on club? Copyright 2014 Kantar Retail #2. Loyalty: Club member loyalty translates to conversion for your company. Source: Company reports and Kantar Retail analysis and estimates (2013E) 4 As a supplier, if your brands arent in club, chances are that members arent going to look for them elsewhere. At the same time, truly capitalizing on member loyalty means aligning with club needs to drive value through customization. Any time we get another reason why you want to come shop at Costco, its another reason why youre going to renew every year. Richard Galanti, CFO, Costco (March 2013) Drive Loyalty Drive Strategy Memberships Drive Profit Copyright 2014 Kantar Retail #3. Clout: Club shoppers are the folks you want your brands exposed to. Source: Kantar Retail ShopperScape, JanuaryDecember All shoppersClub ChannelBJ'sCostcoSam's Club Average income$58,970.40$70,629.14$74,736.43$76,768.54$64, Sample size48,22417,8272,8418,3758,483 Shading indicates significantly greater percentage vs. all shoppers; border indicates significantly lower percentage (95% confidence level) Annual Household Income By nature of the geographies and demographics the clubs cater to, their members often represent community leaders and powerful word-of-mouth drivers who can serve as valuable ambassadors for supplier brands. How does this fit with your companys broader brand and marketing goals? Copyright 2014 Kantar Retail #4. Composition: Clubs attract shoppers at key life stages that benefit your company. Source: Kantar Retail ShopperScape, JanuaryDecember Shopped Channel/Retailer in the Past 4 Weeks All shoppersClub ChannelBJ'sCostcoSam's Club Annual Household Income