The rise of the extreme shopper

1. © GfK Romania | Retail Revolution Conference | April 2015 1
Iulia Pencea, GfK
Group Account Manager
Custom Research & Strategy
Bucharest, April 2015

2. © GfK Romania | Retail Revolution Conference | April 2015 2
XTREME SHOPPER

3. © GfK Romania | Retail Revolution Conference | April 2015 3
Agenda
2 Shopping, we are online
3 A New Shopper has emerged
1 Economical climate...ready for some good news?
4 What now?

4. © GfK Romania | Retail Revolution Conference | April 2015 4
Economical climate...
ready for some GOOD NEWS?

5. © GfK Romania | Retail Revolution Conference | April 2015 5
1,866
RON 0
RON 400
RON 800
RON 1,200
RON 1,600
RON 2,000
Monthly net salary (RON)
0.8%
6%
5%
6%
-10%
-5%
0%
5%
10%
15%
20%
ian.11
feb.11
mar.11
apr.11
mai.11
iun.11
iul.11
aug.11
sep.11
oct.11
nov.11
dec.11
ian.12
feb.12
mar.12
apr.12
mai.12
iun.12
iul.12
aug.12
sep.12
oct.12
nov.12
dec.12
ian.13
feb.13
mar.13
apr.13
mai.13
iun.13
iul.13
aug.13
sep.13
oct.13
nov.13
dec.13
ian.14
feb.14
mar.14
apr.14
mai.14
iun.14
iul.14
Aug.14
Sep.14
Oct.14
Nov.14
Dec.14
Salary evolution and the impact of inflation
Inflation - vs. same month previous year
Real salary evolution (% change vs. same month previous year)
Real salary evolution (% change vs. same month in 2009)
Source: GfK Pulse Survey
Purchasing Power Evolution
2013 2014
% change
20122011
Bigger salaries & inflation decreasing

6. © GfK Romania | Retail Revolution Conference | April 2015 6
-80
-70
-60
-50
-40
-30
-20
-10
0
10
20
ian.-11
feb.-11
mar.-11
apr.-11
mai.-11
iun.-11
iul.-11
aug.-11
sep.-11
oct.-11
nov.-11
dec.-11
ian.-12
feb.-12
mar.-12
apr.-12
mai.-12
iun.-12
iul.-12
aug.-12
sep.-12
oct.-12
nov.-12
dec.-12
ian.-13
feb.-13
mar.-13
apr.-13
mai.-13
iun.-13
iul.-13
aug.-13
sep.-13
oct.-13
nov.-13
dec.-13
ian.-14
feb.-14
mar.-14
apr.-14
mai.-14
iun.-14
iul.-14
aug.-14
sep.-14
oct.-14
nov.-14
dec.-14
ian.-15
feb.-15
Consumer confidence index Romania vs. EU
Romania European Union (average)
Source: GfK Pulse Survey
Partial recovery of the
salaries of state
administration
employees. Pre-election
Political crisis,
increased inflation,
increased euro-RON
exchange rate.
Second partial
recovery of the
salaries of state
administration
employees.
Introduction of
co-payment for
hospital services
NET confidence
(positive – negative)
2013 201420122011
Minimum salary
+ 50 RON,
cheaper energy.
Income increases
announcements,
presidential
elections*, which
usually bring a
surge of optimism.
2015
Minimum salary
+ 75 RON,
pensions +5%
Consumer Confidence Evolution
Specialists and official institutions expect the Romanian economy to grow by 2.5 - 3.7% in 2015

7. © GfK Romania | Retail Revolution Conference | April 2015 7
50 47 46
8 9 9
15 13 14
26 28 27
2012 2013 2014
Hypermarkets
Supermarkets
Discounters
Cash & Carry
Modern Proximity
Stores
Traditional Trade
FMCG Markets
Modern
Trade:
50% 54%
Value change, 2014 vs 2013
0.4
6
0.4
4
0.4
2
Personal Care
Home Care
Beverages
Food, other than fresh
products
Fresh & Dairy
FMCG
53%
Extra income is likely to be spent rather than set aside
Source: GfK Household Panel

8. © GfK Romania | Retail Revolution Conference | April 2015 8
Technical Goods Market
+14% vs. 2013 and surpassed €700 mil
Source: GfK Retail of technology
0
100
200
300
400
500
600
700
800
Total Consumer
electronics
Photo Major
domestic
appliances
Small
domestic
appliances
IT Telecom-
munication
Office
Equipment and
consumables
Evolution by category (in Q4 2014 vs. Q4 2013)
23%
19%
18%
Mil Euro
Q4 2014 vs. Q4 2013
% change
0
100
200
300
400
500
600
700
800
Q1 2011Q2 2011Q3 2011Q4 2011Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014
Technical goods market evolution
Mil. Euro

9. © GfK Romania | Retail Revolution Conference | April 2015 9
Shopping nowadays means...
The process of browsing, comparison shopping,
information gathering OR the actual
purchase of items.
Willing to buy more but...

10. © GfK Romania | Retail Revolution Conference | April 2015 10
73
72
64
64
I’m learning how to shop better and more efficiently
I feel like I am in more control than ever before when
choosing the best products to buy
I am now less loyal to any one retailer, because I have to
shop around more to find the best values
Retailers, advertisers, and brands have less influence on my
purchase decisions than ever before
Retailers and
brands
lose
more and more
influence
on
Purchase decision
Whats different in shopping?
(+9)
(+8)
Learning
Control
Less influence
Best value
GfK Xtreme Shopper Online Survey

11. © GfK Romania | Retail Revolution Conference | April 2015 11
The role social networks in the shopping experience is undeniable
77
61
58
47
46
I am more concerned about the security of my personal
information when shopping online than I am when
shopping in a store
I like it when a website keeps track of my visits and then
recommends things to me
Shopping online saves money
My social networks have become as important as other
information sources for me to make the best product
choices
I like it when I can pay for something using my mobile
device
Even if they are still
at a high level,
customized
recommendations
based on
previous behavior
are decreasing in
importance
(-5)
(+7)
(+3)
Technology
Online
GfK Xtreme Shopper Online Survey

12. © GfK Romania | Retail Revolution Conference | April 2015 12
We are online

13. © GfK Romania | Retail Revolution Conference | April 2015 13
Split of digital profiles in Romania
DIGITAL
NATIVE
DIGITAL
VOYEUR
DIGITAL
SETTLER
DIGITAL
MONK
DIGITAL
IMMIGRANT
Live in land, far from the sea
Watch the people in the water,
swim to cool off
Fishermen use the water but live on land
Penguins same in or out of the water
Like fish in the sea6%
7%
16%
30%
36%

14. © GfK Romania | Retail Revolution Conference | April 2015 14
A New Shopper has emerged

15. © GfK Romania | Retail Revolution Conference | April 2015 15
Economy meets tehnology
The rise of the Xtreme Shopper
Competitive 11h/week
searching for
product info
Wired
Xtreme Shoppers are a global and growing phenomenon,
empowered by being proactive and in control.
“Win” at the game of finding the best value
Higher
education&
income
equal
in Romania are mostly
25-34, highly educated
and more affluent

16. © GfK Romania | Retail Revolution Conference | April 2015 16
Xtreme shoppers % Ro is a bit above the regional average
25%
52%
33%
35%
18%
22%
25%
Australia
APAC
LATAM
US
WE
CEE
Romania
Note: incidence measured in 15-45 years old urban Internet users
* In the past 6 months
80%
74%
71%
67%
58%
36%
Searching for the best price
Check for general product information
Finding products I want
Purchase a product
Read product reviews
Use a social networking site to request /exchange/post
information about the product
Used
smartphone and/or
tablet
to shop*
Actively using
Internet
in shopping*

17. © GfK Romania | Retail Revolution Conference | April 2015 17
61
60
46
53
Previous experience with retailer or brand
Online reviews from experts
Online reviews from other shoppers/users
Opinions of family/friends/colleagues
Retailer websites
Price comparison/discount websites
Xtreme Shoppers (N=250) Non-Xtremes (N=750)
Xtreme Shoppers value most touchpoints more
compared to Non-Xtremes

18. © GfK Romania | Retail Revolution Conference | April 2015 18
88
88
68
38
36
26
18
16
14
Xtreme Non-Xtreme
95 85
95 86
78 64
43 36
51 32
30 24
27 15
25 14
17 13
7 6
2 4
Family member
Friends
Neighbors
Colleagues/people I know
To whom I share a hobby/interest
People I know through a community
People I know through my kids’
activities
People who may have read a
recommendation I posted online
People I don’t know
Significantly higher than Non-Xtreme at 95%
confidence level
People recommend products and services mainly to family and
friends, Xtreme shoppers are reccomending to everybody

19. © GfK Romania | Retail Revolution Conference | April 2015 19
What now?
1. Are all shoppers going Xtreme?
2. How classic retail affected?
3. How touchpoints are affected?

20. © GfK Romania | Retail Revolution Conference | April 2015 20
Is online shopping bound to replace physical stores?
Different experieces

21. © GfK Romania | Retail Revolution Conference | April 2015 21
Previous
Experience
Brand websites
Price comparison sites
Coupons Retailer websites
Store flyers
Brochures/flyers
Product packaging
In store displays
Online advertising
General shopping sites
TV or print advertising
Social media
Shelf info
WOM-friends and family
Product samples/demos
Consumer opinion sites
Online experts reviews
Manufacturer apps
Ability to pay with my mobile device
Geo-locater
Shopping /retailer apps your smartphone or tablet
Traditional in-store tactics remain vital influencers, yet
online/ mobile touchpoints influence is growing
Brand Retailer

22. © GfK Romania | Retail Revolution Conference | April 2015 22
MORE IN CONTROL, ENGAGED, DEMANDING
MORE EMPOWERED
CRITICAL NEED FOR
SHOPPER-CENTRIC SOLUTIONS
 Know me
 Engage me
 Provide
information
 Give me good
value for my
money
 Make it easy
for me
 Follow me
Favorable climate
Digital boom
Omnichanel shopping gaining importance
Off and online - different experiences coexisting
→ Purchasing Power and markets increasing
→ Turned shopping to procces: browsing, comparing, purchase
→ More complexity in bussines
→ Touchpoints have to adress both, coherently
Wired, higher education
and income
Increased in incidence
with +5pp in one year
online looking for „best
value” - INFORMATION
Values online
expressed reviews
Can be an informal
brand ambassador

23. © GfK Romania | Retail Revolution Conference | April 2015 23
DID YOU THINK I'D FORGOTTEN YOU?
An algorithm can help you shop the entire wardrobe from “House of Cards”

24. © GfK Romania | Retail Revolution Conference | April 2015 24
THANK YOU!
Iulia Pencea
Group Account Manager
Custom Research & Strategy
GfK Romania
www.gfk-ro.com