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The NPD Group, Inc. | Proprietary and Confidential

Copyright 2016. The NPD Group, Inc. All Rights Reserved.

This presentation is proprietary and confidential and may

not be disclosed in any manner, in whole or in part, to any

third party without the express written consent of NPD.

Ninja Analytics: The Craft of Transforming Big Data into Insight

PRESENTED BY: Sandy Silva, Canadian Fashion and Beauty Industry Analyst, The NPD Group

The NPD Group, Inc. | Proprietary and Confidential 2

Formula 1 Racing


Moneyball


Chicken Little


Size and Growth by Industry

5

Source: The NPD Group / Consumer Tracking Service, 12ME Mar 2016 (Apparel + Footwear), Retail Tracking Service, 12ME Mar 2016 (Prestige Beauty + Tech + Toys)

Footwear Apparel

$8.5B

Tech

$1.8B

Toys -7% +8%

$6.9B

Footwear

$25.7B

Apparel +2% +4%

$1.9B

Prestige Beauty

+14%


Seasonal Trends by Industry

6

Tech Toys Apparel Footwear Beauty



Sales Evolution by Industry

7

Tech Toys

$7.5

$8.0

$8.5

$9.0

$9.5

$10.0

$1.40

$1.45

$1.50

$1.55

$1.60

$1.65

$1.70

$1.75

$1.80

$1.85

+17% -11%

Apparel Footwear

$23.0

$23.5

$24.0

$24.5

$25.0

$25.5

$26.0

+2% $5.6

$5.8

$6.0

$6.2

$6.4

$6.6

$6.8

$7.0

+4%

Beauty

$1.4

$1.5

$1.6

$1.7

$1.8

$1.9

$2.0

+14%



Regional Growth by Industry

8

Tech Toys

7%

3%

4%

5%

5%

4%

ON

QC

AB

BC

MB/SK

ATL

-6%

-8%

-14%

-5%

-8%

-10%

ON

QC

AB

BC

MB/SK

ATL

Apparel Footwear

5%

1%

3%

7%

1%

6%

ON

QC

AB

BC

MB/SK

ATL

Beauty

16%

5%

7%

23%

11%

23%

ON

QC

AB

BC

MB/SK

ATL

3%

12%

-5%

1%

-10%

-14%

ON

QC

AB

BC

MB/SK

ATL



Evolution and Valuation

Outdoor & Sport Toys IT

Home Infant / Toddler

Toys Consumer Electronics

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$1

$200,001

$400,001

$600,001

$800,001

$1,000,001

$1,200,001

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

$3,000.0

$3,500.0

$4,000.0

$4,300,000.0

$4,400,000.0

$4,500,000.0

$4,600,000.0

$4,700,000.0

$4,800,000.0

$4,900,000.0

$5,000,000.0

$5,100,000.0

$5,200,000.0

$5,300,000.0

$2.9B

-16% +1%

$1.0B

+3%

$0.3B

$4.6B $0.3B

$262,000

$264,000

$266,000

$268,000

$270,000

$272,000

$274,000

$276,000

Boots

$1.2

$1.3

$1.4

$1.5

$1.6

$1.7

$1.8

$1.9

$2.0

+4%

$1.9B

Activewear

$4.2

$4.4

$4.6

$4.8

$5.0

$5.2

$5.4

$5.6 $5.5B

Athletic Shoes

$1.7B

Basics Denim

$1.6

$1.7

$1.7

$1.8

$1.8

$1.9

$1.9

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0 $3.6B $1.8B

Makeup

$0.7B

Fragrance

$0.5B

$1.2

$1.3

$1.4

$1.5

$1.6

$1.7

$1.8

$1.9

$2.0

+9% +19%

-11% +6% +8% +1% -9% +7%



Seasonal Trends

Outdoor & Sport Toys

IT (Laptops, Computers, etc.)

Home Appliances

Infant / Toddler Toys

Consumer Electronics

Makeup

Fragrance Activewear Basics Denim

Boots Athletic Shoes



Key Items Winning in Canada: Innovation Leads to Success in Converting the Masses

11

Mobile Holders /

Stands Shopkins Star Wars

Sweats & Active Bottoms Athletic Shoes

Makeup All Other Face

Skincare Masks

Athletic Sets

+103% +1126% +121% +9% +9% +55% +43% +65%



16%

12%

9%

14%

31%

17%

84%

88%

91%

86%

61%

83%

Total

APPAREL

BEAUTY

FOOTWEAR

TECH

TOYS

Buying Visits By Category

Website Brick & Mortar

9%

14%

13%

10%

7%

6%

4%

9%

91%

86%

87%

90%

93%

94%

96%

91%

Total

13-17

18-24

25-34

35-44

45-54

55-64

65+

Buying Visits By Age Group

Website Brick & Mortar

Source: The NPD Group / Consumer Tracking Service/Shopping Activity Services/12ME March 2016

Millennials Lead Retailers Online

12


Making the Case For Assortment Expansion

CASE STUDY:


Here’s how one leading footwear manufacturer increased their SKUs at a large, national retailer

14

By digging into consumer data, our client learned that:

Flats was among the top attributes in women’s footwear.

1 2 Key buying attributes for women’s flats are:

COMFORT VALUE PRICING

It turns out, our client held a leadership position when it came to comfortable, value-priced shoes


By combining the data with our understanding of the retailer’s core consumer, we put together an assortment that was larger and dialed in to the retailer’s go-to-market strategy.

“

”


The result?

+58% increase in SKU listings

+10% increase in

retailer sell-through

+50% increase in

“penny profit”


Investigating Marketing Mix to Increase Market Share

CASE STUDY:


Canada’s small appliance market was driven by countertop blenders

18

A leading small appliance manufacturer was experiencing declining sales despite recent investments in marketing

+17%

blenders $448K

Gaining 1 additional

share point is worth


We need to know whether, and to what extent, the media mix decisions paid off, and how we might optimize future spending.

“

”


A marketing mix model was created using weekly sales data combined with our client’s marketing spend data

20

The analysis determined the return on investment (ROI) for each of their marketing activities.


The source of sales and share declines traced back to changes in their media plan Our client had shifted substantial advertising dollars away from certain high-ROI magazines; new digital advertising had not panned out at all.

A new media plan was proposed to correct marketing spend:


The result?

+12% additional units sold

Optimization of media plan expected to lead to an increase of

And, we’re already seeing sales and market share on the rise!


Helping a Global Beauty Brand Amp Up Sales

CASE STUDY:


Source: The NPD Group / BeautyTrends® 12ME December 2015

State of the Prestige Beauty Industry in Canada and the U.S.

24

$1.9B $16B

+12% +7%


Canada’s prestige beauty market is driven by makeup

25

But, a leading beauty manufacturer was losing share in this growing market – never a good sign

+17%

makeup

+17%

-5%


Store clusters were created that aligned with each sales territory and corresponding sales rep

26

Territory by territory, we benchmarked sales, share, and growth, and identified opportunities, competitive threats, and local market dynamics.


Our client’s brands were losing in multicultural markets

27

An urban strategy was proposed to win in major urban centers which are known hotbeds for multiculturalism:

65%

Top 6 Greater Metropolitan Areas

account for:

of the prestige beauty market

1

2

Two niche brands did well in multicultural markets. Focus investments on those brands in major urban centers.

Enrich the in-store experience for more effective outreach to specific groups (in-aisle and on-counter collateral, more sophisticated training program for counter associates).


After just two fiscal periods, a sales increase of over

The result?

+10% was already realized.


Mobile First

If you remember nothing else…

Defined Digital Strategy (if you haven’t already by now!)

Analytics + Data Driven Decision Making

Fun-Tech (Fun with Technology)

IoT (Internet of Things)

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