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Making IoT Data BeautifulCOTY Drives Sales by Optimizing In-store MerchandisingJanuary 15, 2018

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Data is power

New data + alerts for improved display execution & sales performance at retail

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How much will CPG Marketers spend in 2017?

3

$225Billion

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Where is largest portion spent?

4Cadent Consulting Group- 2017

Consumer Promotion,

10.5%

Shopper Marketing,

12.9%

Traditional Advertising,

13.3%

Digital, 19.9%

Trade Promotion,

43.4%

§ Traditional Advertising§ Digital marketing§ Shopper Marketing§ Consumer Promotion§ Trade Promotion= $98 Billion

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TO CELEBRATE AND LIBERATETHE DIVERSITYOF YOUR BEAUTY

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The Beauty ConsumerShe is a beauty enthusiast who is looking for both her favorite products and the latest new products and trends.

Her trip is not a traditional stock up, planned purchase but rather one that is discretionary and impulsive in nature. Her impulse purchase is influenced by what she sees in the media and in-store.

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Displays drive significant sales

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Challenge is Display Compliance

8

% Displays orderedthat are executed at retail within the sales period in the approved store list

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Challenge is Display Compliance

9

Industry is 50%= opportunity for improvement!

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Historic solutions, there was not a good one…

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§ Little data was available and was not real-time to take action

§ Work with retailers to improve execution but there were lags

§ Send out 3rd Parties to set up displays which costs additional money and often missed key alignment dates

§ Utilize 3rd Parties to audit execution compliance

Needed actionable data!

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Why it matters

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§ Lost incremental sales opportunities for the category

§ 50% of displays don’t get executed so there is waste

§ Inventories build and impact GMROI

§ Future display forecasts are not optimized

Opportunity: Leverage data to increase store execution, drive incremental sales, improve ROI and enhance future planning.

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Optimal Future State:

§ Real Time Display Location Data- Floor or Not

§ Brand & Retailer Execution Partnership

§ Brokers or Store Personnel Leverage Data to Increase Compliance

§ Increase Category Sales

§ Optimize Future Promotions/Displays based on Data Analysis

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Real Time Data +Brand & Retailer Partnership

Category Sales Opportunity

=

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The Shelfbucks Solution

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ü Increase category sales

ü Real-time location data (On sales floor or not)

ü Brand & Retailer execution partnership to drive efficiencies

ü Brokers or stores use data to increase performance and strengthen operations

ü Merchandising use data to optimize future promotions/displays

CVS pilot 2 years ago Now at scale

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Real-time Display Data & AlertsHow it worksIndustry FindingsCase Studies©2017 Shelfbucks Confidential & Proprietary

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20-35% incremental sales volume with actionable data & alerts to improve performance

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Data from every display, every store, every day

Improved execution & decision making

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More Days on Display =Improve 35% pointsSales & Category ShareGM ROIOptimize Trade $, COGS & TimeReduce Excess Inventory

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Where are your displays

every day

Confidential

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SKU-level Incremental

Sales

Incremental Sales by

Week

Confidential

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Identify missed sales

$1,000,000+

Confidential

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Full transparency incommunications + planningacross merchandisingsupply chain &store operations

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Early Results & Case Studies500 Million Data PointsEarly Industry Insights

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Shelfbucks 2018+Shelfbucks 2017500 Million Data Points

2 Trade Channels3 Retail Chains

6,500 Stores27 Programs9 Categories

19 Display Types183 Products

3 Billion Data PointsMass, Grocery, Drug Trade Channels

Top National Retail Chains30,000+ Stores

most Programsmost Categoriesmost Display Types

Thousands Products

Historical

Scale

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500M data points. Three chains. Two trade channels. 50+ programs.

Source: 2016 Shelfbucks Study

Historical Reporting

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80%

50%

Program D

41%

Program C

19%

91%

Program B

95%82%

Program A

0%

On-Floor Rate Sales Performance

Hidden SalesOpportunity

Unlock hidden sales opportunities

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Late/neverOn-timeearly

28%14%58%Allergy

44%11%45%Snack

53%17%30%Snack

30%26%44%Beauty

33%15%52%Cough & Cold

62%12%27%Beauty

45%11%44%Beauty

On-time varies widely

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Display 1 -SKU Mix

Display 2 -SKU Mix

SKU mix drove sales lift

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41%

80%

Store Brands Program

ActualExpected

-39%

30%

70%

New Product Launch

ActualExpected

-40%

High profile programs had high variability

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Grocery Battery Display Case Study

Displays arrived late

Displays put on floor late

Displays never arrived

Displays thrown away

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+391KIncremental

sales at scale

+64%Sales lift when

executed

Challenge• Sales rate higher when displays on sales floor

• Sent alerts to stores requesting execution

Results• Stores took action to execute displays

• 64% sales lift per day when display executed

• At scale $391K additional sales during period

Grocery Battery Display Case Study

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In Supply Chain

In Stockroom

On floorWas on-floor, but now removed

Disposed without being placed on-floor

• 39 delivered to wrong store• 60 never delivered

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Drug Beauty Display Case Study

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+33%Incremental execution

+45%Stores took

action

Challenge• Only 800 displays on sales-floors at start date

• Sent alerts to 600 stores requesting execution

Results• 270 additional stores took action to execute displays

• Added 8,400 additional days of promotional sales

• Additional 33% incremental display execution

Drug Beauty Display Case Study

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In Supply Chain

In Stockroom

On floorWas on-floor, but now removed

Disposed without being placed on-floor

• 16 delivered to wrong store• 90 never delivered

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Drug Allergy Display Case Study

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+17%Incremental execution

+32%Stores took

action

Challenge• Only 800 displays on sales-floors at start date

• Sent alerts to 443 stores requesting execution

Results• 143 additional stores took action to execute displays

• Added 5,800 additional days of promotional sales

• Additional 17% incremental display execution

Drug Allergy Display Case Study

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Before Data§ 50% execution§ $9M sales during period§ $12M excess inventory

BrandOpportunity

60K displays $21M sales

opportunity

After Data§ 80% execution§ $14M sales during period§ $7M excess inventory

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Before Data§ 50% execution

§ $450M sales during period

§ $550M excess inventory

RetailerOpportunity

3M displays $1B sales

opportunity

After Data§ 80% execution§ $750M sales during period§ $250M excess inventory

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§ Increase Category Sales

§ Real-time location data for decision making and action

§ Brand | Retail transparency & partnership

§ Field & Stores Operations use data to increase performance

§ Merchandising and Inventory Management use data to optimize future promotions/displays

COTY & CVS Benefits= Industry Game Changer

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Future Media Tie-in

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Thank you + QAContact:Karen Van Dongen, Karen_Van-Dongen@cotyinc.com Erik McMillan, emcmillan@shelfbucks.com

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