1. PLUS 11 category-specific insights best offers to disrupt the omni-channel how to fight showrooming need for speeddisrupting the omni-channel

2. ALSO INSIDE methodology6 categories and products 8 smartphones = showrooming 12 product research 14 by the numbers 18 NEED FOR SPEED PAGE 4 A NEW ERA IN RETAIL dynamic-price strategies that preserve margins PAGE 10 KEY FINDINGS always-connected devices change shopper behavior PAGE 16 ONLINE V. IN-STORE See the parago omni-channel index scores With consumers embracing the omni-channel, the path to purchase is accelerating. Todays retailers need faster ways to compete for customers who are making decisions in shorter timeframes. The key to closing more sales as deal-seeking speeds up? Limited-time dynamic discounts that create a sense of urgency. disrupting the omni-channel | 3

3. the need for speed in retail Rodney Mason CMO rodney.mason@parago.com 972.538.7336 twitter.com/rodmoose INTRODUCTION Retailers have a lot to contend with in this new era of shopping: highly competitive prices from e-tailers like Amazon, rising smartphone adoption, the showrooming boom and incredibly price-sensitive consumers. For retailers to thrive, they need to disruptthepath-to-purchase with a dynamic, real-time pricing model. Not just online, but in brick-and-mortar stores, too. Rodney Mason parago CMO IN EVERY MAJOR CATEGORY, consumers are using multiple devices to research and shop faster than ever. Price sensitivity continues to be at an all-time high, which is driving the desire to find the best deals. The path to purchase has accelerated, both online and in-store. This new parago omni-channel study reveals that price, features and availability are the most important factors in purchasing decisions for products and services.Brand is still a consideration,but a limited one for most income groups. Now, a new factor is coming into play: the need for speed to close more sales. the path-to-purchase is shorter than ever Online comparison-shopping is condensing the path-to-purchase. Across 11 different retail categories, the average purchase time is less than 2.25 days. Todays consumers know they can research quickly to identify the best deals.This very narrow window of opportunity requires fast, nimble promotional strategies. disrupt the path and sell more Dynamic pricing the ability to remain competitive with real-time, best-in-marketpricesisquicklybecominganecessity.Butmaintaining healthymarginsisstillamust,too.Theanswer?Dynamic-price rebates that can create urgency with limited-time deep discounts. To get additional detailed findings and key insights for your industry, contact me. Good selling! Rodney Mason disrupting the omni-channel | 54 | need for speed

4. To identify emerging omni-channel path-to-purchase shopping trends, we conducted this research during the 2013 peak holiday shopping season through an original online survey. METHODOLOGY REGION EDUCATION less than high school 3% high school diploma 20% some college 28% vocational/technical degree 5% college graduate 29% graduate school 15% EMPLOYMENT employed full time 40% employed part time 12% unemployed 9% homemaker 9% student 7% retired 18% disabled,not able to work 5% INCOME $19,999 16% $20,000 to $49,999 30% $50,000 to $99,999 25% $100,000 to $199,999 20% $200,000 3% prefer to not disclose 6% AGE 1829 21% 30-48 34% 4967 35% 67+ 10% GENDER OWN VS. RENT MARITAL STATUS widowed/divorced/separated 10% in a relationship or living with partner 13% never married 24% married 50% Pacific 12% Mountain 7% West North Central 8% West South Central 9% East North Central 17% East South Central 6% New England 5% Middle Atlantic 19% South Atlantic 18% Over 1,900 people who represent the US consumer population responded to this survey. 51% 66%49% 34% 6 | need for speed disrupting the omni-channel | 7

5. CATEGORIES auto parts clothing electronics furniture groceries home improvement/ building supplies office supplies pet products sporting goods subscription services (broadband, cable, utilities) toys CATEGORIES & PRODUCTS Our extensive study includes 11 retail categories and 16 specific product groups with an overview of todays omni-channel shopping trends. The parago omni-channelindex scores identify product- specific propensity for purchase in the omni- channel.See page 16 for scores by product. lawn & garden supplies dog food printer paper stand mixers televisions tires video games washing machines athletic shoes beer Blu-ray DVDs cable packages car batteries cosmetics/ personal care jeans laundry detergent PRODUCTS 8 | need for speed disrupting the omni-channel | 9

6. PRICE-SENSITIVITY = DEAL SEEKING a new era in retailing: the path to purchase can now be interrupted at any time of shoppers reported being more sensitive to price 65% 4outof518- to 48-year-olds own smartphones 88%of consumers look for deals, rebates and best prices before shopping 95%of people shop on their computers 99%of people with $50,000+ incomes shop on computers 2of5people shop on their tablets average time-to-purchase in 11 retail categories is 2.25DAYS 10 | need for speed disrupting the omni-channel | 11

7. SMARTPHONES = BUY ONLINE IN-STORE HIGHEST IN-STORE SMARTPHONE PURCHASES ages 1829 45% ages 3048 40% all adults 29% income $50,000$99,999 32% income $100,000$199,999 39% income $200,000+46% 70%ofshoppersbetween18-and 48-years-oldactivelyshowroom ages 1829 73% ages 3048 60% all adults 48% income $100,000$199,999 64% income $200,000+63% HIGHEST SHOWROOMING ACTIVITY HIGHEST SMARTPHONE OWNERSHIP ages 1829 85% ages 3048 74% all adults 62% income $50,000$99,999 63% income $100,000+75% 12 | need for speed disrupting the omni-channel | 13

8. PRODUCT RESEARCH DIGITAL RULES Google, Amazon and retail websites beat all other sources for finding deals 92%94%97% look for deals, rebates & best advertised prices review circulars and print ads check online for best prices before shopping, people research a lot Most shoppers research is completed within two days with two retailers in consideration. 14 | need for speed disrupting the omni-channel | 15

9. PRODUCT would consider purchase in omni-channel v. in-store TV 72% stand mixer 72% DVD Blu-Ray Ultra Violet 69% video game 64% washing machine 59% printer paper (case) 57% athletic shoes 52% jeans 49% cosmetics/personal care 41% lawn & garden supplies 39% tires 38% car battery 37% laundry detergent (100 oz.) 29% dog food 27% beer (case) 15% triple-play cable package* 100% OMNI-CHANNEL INDEX OMNI-CHANNEL TRUMPS IN-STORE propensity to buy in the omni-channel v. in-store *would consider purchase in omni-channel v. provider phone bank CATEGORY Google in-storedisplays retailwebsites Amazon newspaper/magazine TV socialmedia mobileapps auto parts 1 2 3 5 4 6 7 8 electronics 1 4 3 2 5 7 6 8 furniture/housewares 1 3 4 2 5 6 (tie) 6 (tie) 6 (tie) office supplies 1 4 3 2 5 6 (tie) 6 (tie) 7 sporting goods 1 3 2 4 5 6 (tie) 7 6 (tie) toys 1 4 3 2 5 6 7 (tie) 7 (tie) groceries 4 1 3 5 2 6 (tie) 7 6 (tie) home improvement/building supplies 2 1 3 4 5 6 7 (tie) 7 (tie) pet supplies 2 1 3 5 4 6 7 8 clothing 3 2 1 4 5 6 (tie) 6 (tie) 6 (tie) subscription services 2 3 1 5 4 7 (tie) 6 7 (tie) preferred omni-channel comparison sources 16 | need for speed disrupting the omni-channel | 17

10. BY THE NUMBERS Most shoppers research is completed within two days with two retailers in consideration. We asked what type of limited-time offer would disrupt shoppers paths-to-purchase and cause them to act immediately. Time-sensitive dynamic-price rebates were more effective than instant discounts in 11 different retail categories. Time sensitivity was included to determine propensity to buy now. PRODUCT days to buy stores/website visited athletic shoes 1-2 69% 1-2 54% beer (case) 1-2 82% 1-2 86% car battery 1-2 79% 1-2 66% cosmetics/personal care 1-2 82% 1-2 74% dog food 1-2 87% 1-2 80% DVD Blu-Ray Ultra Violet 1-2 70% 1-2 55% jeans 1-2 76% 1-2 62% laundry detergent (100 oz.) 1-2 88% 1-2 81% lawn & garden supplies 1-2 73% 1-2 65% printer paper (case) 1-2 82% 1-2 69% stand mixer 3-6 77% 3-4 80% tires 1-2 68% 1-2 57% triple-play cable package 3-6 75% 1-2 50% TV 3-6 68% 3-4 77% video game 1-2 73% 1-2 61% washing machine 3-6 66% 3-4 67% PRODUCT rebate instant neither athletic shoes 43% 21% 35% beer (case) 43% 22% 36% car battery 49% 20% 31% cosmetics/personal care 48% 22% 31% dog food 44% 20% 36% DVD Blu-Ray Ultra Violet 39% 21% 40% jeans 46% 20% 34% laundry detergent (100 oz.) 47% 24% 30% lawn & garden supplies 48% 18% 34% printer paper (case) 46% 20% 34% stand mixer 39% 21% 40% tires 43% 22% 35% triple-play cable package 41% 24% 36% TV 35% 24% 42% video game 44% 24% 31% washing machine 47% 19% 34% A portion of savings realized by retailer was included in rebate value to provide best offer. LIMITED-TIME REBATES = BEST DISRUPTION 18 | need for speed disrupting the omni-channel | 19

11. We are the worlds most comprehensive, single-source provider of incentives and engagement. Many of the largest brands in the world consider parago a trusted partner. We offer: consumer rebates & promotions prepaid rewards & incentives sales & channel management energy rebates & incentives we create engaging solutions that inspire action & impact results 2014 Parago, Inc. All rights reserved. IN DEPTH: To view a complete category or product path-to- purchase including media,purchase place,and other preferences schedule a brief meeting with us. We will walk you though additional detailed findings and provide key industry opportunities. RodneyMason CMO rodney.mason@parago.com 972.538.7336 twitter.com/rodmoose