Emerging Technologies: Are we there yet?

1. Emerging Technologies:Are we there yet? Presented by: David Diamond David Diamond Associates

2. Agenda: • Definitions and Terms • Where we want to go • What we need to do to get there • How we implement a shared vision • The real future – what comes next?

3. Definitions: • Traditional Paper Coupons: FSI, on-pack, in-pack, etc. – life in 1995 • Internet print at home coupons: Delivered via the web into a “controlled” environment and printed at home – redeemed as a paper coupon • Digital Coupon: Complete process from set-up through redemption is digital. No paper manifestation at all • Traditional Clearing: The process of capturing, counting, tracking and billing a paper coupon, as a paper coupon • Electronic Clearing: The process from check stand to reconciliation executed via POS and other data rather than hard copy. Can be used for any sort of coupon

4. An Interesting Twist • In most technological advances, the technology is created, and the technology determines the path the industry takes • But in our world, most agree what the end-point is, and what technology is needed, but no one can agree on how we get there • To a certain extent, it is like the moon mission in 1961 – we know where we want to go but do not know how to get there.

5. The Shared Vision • Many in the industry share a vision of where we want couponing to go: • Fully digital process from program inception through redemption and reconciliation • Delivery to consumers on the device of the consumers choice – most likely a mobile device of some sort • Communication to consumers throughout the process – before shopping, en route, in the store • Consumer opt-in to avoid privacy issues • Individually consumer identifiable to avoid fraud

6. The Shared Vision • Many agree that the shared vision should include targeting to the micro level • Integration with frequent shopper and other databases • Segmentation by consumer loyalty • Value determined to just drive incremental sales or just stave off disloyalty – consumer-by-consumer • Delivery via consumer’s preferred method • Driving volume for retailer and manufacturer • Maximizing profitability for retailer and manufacturer

7. How we get there • Technology – but not really. Everything we need exists, we just need to agree on standards, deploy the technologyand use it • Retailer/Manufacturer cooperation – really. That is where the issues really lie • Who is in charge, who is in control? • Who gets veto power? • Who owns the customer? • Retailer/Manufacturer trust – really, really. This is why progress has been so elusive. It is just not there. And it is a requirement • Retailer/Manufacturer Alignment – forget about it.

8. Alignment • We all come to conferences and agree that there needs to be retailer/manufacturer alignment • But when it comes to coupons, it can never be achieved, and will never really exist • Pepsi really wants you to buy Tropicana Orange Juice – and really does not care where you buy it • Kroger really wants you to buy Orange Juice at Kroger – and really does not care which brand • We need to accept this and move on understanding that there is not exact alignment between manufacturers and retailers • The only way is accommodation and compromise

9. Moving Forward • The industry needs to formally agree on a shared vision and shared implementation plan including operating standards • The industry needs to develop approaches which accommodate both the retailer’s needs and the manufacturer’s needs, and stop pretending that they are the same, when they are not • When those two things are done, the technical standards will be easy to identify and straight-forward to implement • And then we can start working on the real future

10. The Real Future • First, we must get some version of the shared vision implemented – it is a necessary prologue to the implementation of further technological progress • We cannot jump to the next step – we need to complete the first step first. • But once we have a real plan, we can start looking at the next level of new technology and implement that on top of the shared vision

11. The Real Future • New innovations should include, but will not be limited to: • Sophisticated geo-tracking via GPS, linked to specific messaging • Self-correcting algorithms, which find programs, down to the consumer level, which are not working and adjust on the fly • Database integration, which integrates behavioral and attitudinal data to better understand individuals • Integration of new touch points and new devices • Integration of media, joining advertising and promotion, once and for all

12. The Real Future • The shared vision is ambitious, and difficult • But it is achievable • And it not only provides a giant step forward for the industry • But it also provides a great platform for tons of incremental innovation

13. Thank You • David Diamond – david@ddiamondassociates.com