Presented by:
Robin Sherk
Director, Retail Insights
Amy Koo
Senior Analyst
May 23, 2013

• Driving traffic to the box
–Walmart asserts savings, service, ease, & entertainment
–Target differentiates with specialty services in health, beauty, & electronics
• Leveraging mobile to enhance the store experience
–Target uses mobile incentives to lure…and then engage
–Walmart’s app as the connection before, during, & after
© Copyright 2013 Kantar Retail 2

With customer traffic as the underlying concern
Walmart’s, Target’s Comparable Store Sales Growth
Walmart US Comps Target Corp Comps
8%
7%
6%
5%
4%
3%
0%
-1%
-2%
-3%
-4%
2%
1%
Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12
Walmart’s customer traffic was down 1.8% in Q1
Q4 '12
Target’s number of transactions declined 1.9%
Q1 '13
© Copyright 2013 Kantar Retail 3
Source: Company reports, Kantar Retail analysis

Considering the types of services Walmart offers
Convenience
Savings Entertainment
Source: Kantar Retail analysis
Community Health
© Copyright 2013 Kantar Retail 4

Adding value to excite above & beyond EDLP
• Gas Promotions return in 2013
• Layaway expanded in 2012, and 2013?
• Suppliers, stores assure value, and offer targeted events…
Savings
© Copyright 2013 Kantar Retail 5
Source: Kantar Retail research, analysis

Opportunity to drive local store engagement
Community
Source: ECRM, Kantar Retail analysis
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SoloHealth Station:
Health
• In-store dental clinics
• California
“Anytime that there's an inefficiency in the system
– and there's no better poster child for inefficiency than the
U.S. healthcare system - we believe there's an opportunity for Walmart.”
-Bill Simon, March 2013
Source: Kaiser Health News (Feb. 2013), Kantar Retail research, store visits, analysis
• To be in 2,500
Walmarts and Sam’s
Clubs
• Let’s users check eyesight, BMI, eyes, blood pressure, and get info. on diet, vitamins, and pain management
• Opportunity for ads
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Entertainment
TicketMaster Kiosks
• Launched August 2011
• Purchase live event tickets
:
• Concerts
• Sports
• Theater and family shows
Film Screening
With Warner Bros
“Man of Steel” sold at
Walmart for special showing in June 7, 2013
Source: Kantar Retail store visits, research, analysis
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Store-in-store tests
Entertainment
Source: Kantar Retail store visits, analysis
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Developing options for anywhere, anytime
Convenience
Source: Kantar Retail research, analysis
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Developing a portfolio of services for best guests
• Increased emphasis on health and wellness to create a differentiated store experience
• Services and programs center around approachable and knowledgeable pharmacy and healthcare specialists
• Target has significantly linked these services overall solutions that include consumables and even GM
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Source: Kantar Retail store visits and analysis

Broadest reach and exposure for Target
• Pharmacists not measured on scripts delivered, but full department sales – including OTC
• Multi-year “Ask Us” campaign invited guests to ask for help
• Pharmacists “seal of approval” implied across many categories
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Source: Kantar Retail research, store visits, and analysis

Impacting an even greater guest audience
Among Current Rx Shopper Base,
% Who Has Changed Place Where Most Rx Filled in Past Year
Target 30%
Mail Order/Online Pharmacy Associated with Insurance Plan
Supermarkets
Walgreens
CVS
Walmart
18%
17%
16%
16%
15%
Nearly one-third of
Target's current Rx shopperbase is new in past year
Other store types. Incl. Clubs 14%
Rite Aid 14%
• For every 5 Rx filled, guests receive a 5% off total purchase for a future visit
• REDCard holders stack the 5% on top of their everyday 5% for a total of 10%
“Pharmacy guests are already…shopping about 3x more often than our nonpharmacy guests. Pharmacy Rewards guests are even more valuable, shopping…more than 50% more often than our already valuable pharmacy guests.”
Kathy Tesija, EVP Merchandising and Supply Chain, Q4 Earnings Call, February 2013
© Copyright 2013 Kantar Retail 13
Source: Kantar Retail ShopperScape
®
June 2012; store visits, target.com

Tying Pharmacist expertise to overall wellness
Source: Kantar Retail store visits, research, and analysis
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Began in mid 2000’s
• Expanding from 54 to 68 clinics by the end of 2013
• Presence in 6 states: Florida, Illinois, Maryland,
Minnesota, North Carolina, Virginia
• Over 60 services available at clinics
Curative Services
Trip Driving
Wellness and Cosmetic Services
Basket Filling
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Source: Kantar Retail research and analysis

Combining style with eyecare
Optical business is licensed to Luxottica, but high cross promotion of Target’s brands
Source: Kantar Retail research and analysis
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Testing as newest destination beauty service
“Based on 2012 results in 28 Chicago-area test stores, we are looking to expand this program to additional markets in 2013 and beyond.”
- Kathee Tesija, 2012 Q4 Earnings Call, February 2013
Target Clinics now offer consultations and prescriptions for cosmetic services (Latisse and Vaniqa) for $49
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Source: Kantar Retail store visits, research, and analysis, Company documents

Abrupt end to a piloting service
• Geek Squad would offer all its typical services at Target, including installation, repairs, and warranty plans for mobile and electronics
• 29 initial stores, mainly in Denver area starting Fall 2012
• Expanded to 20 more sites in Kansas City in February 2013
• Pilot abruptly ended in early April 2013
“In electronics, we continue to focus on service as a value-added differentiator for our guests.”
-Kathy Tesija, Q4 2012 Earnings
Call, February 2013
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Source: Kantar Retail research and analysis

Transitioned from Radioshack to Others
• Mobile kiosks were expanded to all stores with Radioshack in 2011
• Offered convenience for busy moms seeking help
• Target shifted to Brightstar and MarketSource in April 2013
© Copyright 2013 Kantar Retail 19
Source: Kantar Retail research and analysis

Walmart and Target
Aligning with Walmart’s efforts to reinforce trips involves examination of your category’s role in:
• Emphasizing its brand equity to drive excitement, “live better” community
• Linking to key services, particular as its role as a health provider expands
• Connecting to Walmart’s multi-channel convenience options as it differentiates by adding new ways to shop
Support Target’s efforts to win “one more trip” from core guests by highlighting your brands’ role through:
• Linking to existing in-store specialty services as a part of a solution
• Developing interactive opportunities to enable guests to experience your brands
• Connecting to products from across the box to tie your brands to Target’s broader lifestyle messaging
© Copyright 2013 Kantar Retail 20
Source: Kantar Retail analysis

• Driving traffic to the box
–Walmart asserts savings, service, ease, & entertainment
–Target differentiates with specialty services in health, beauty, & electronics
• Leveraging mobile to enhance the store experience
–Target uses mobile incentives to lure…and then engage
–Walmart’s app as the connection before, during, & after
© Copyright 2013 Kantar Retail 21

Bringing online resources into the physical box
80%
70%
60%
50%
40%
30%
20%
10%
0%
52%
Mobile and Tablet Ownership
70%
All Shoppers
Target/SuperTarget Shoppers
Walmart/Walmart Supercenter Shoppers
52%
39%
32%
29%
20%
28%
20%
Smartphone Tablet computer Both of These
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Source: ShopperScape ™, March 2013

Teaming with shopkicks to increase “Walk Ins”
• Target was first mass retailer to rollout shopkick nationwide
• Encourages guests to visit more frequently
• Guests earn points for walking into the store and scanning bar codes on select packages
• Points are redeemed for gift certificates or prizes
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Source: Kantar Retail research and analysis

Allows Guests to Share Coupon Offers With Friends
• Beta mode, with 10K+ testers
• Users can select 10 coupons at a time
• In-store coupons range from 5%-30%
• Mobile app will be offered in the summer
• Currently must print out or use through mobile browser
Source: Kantar Retail research and analysis, cartwheel.target.com
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Encouraging connectivity anywhere, anytime
“We’ve rolled out free in-store WiFi across the chain, allowing guests to research products and use our apps while they’re shopping in our stores.”
Gregg Steinhafel, 2012 Q3 Earnings Call, November 2012
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Source: Kantar Retail store visit and mobile phone connection

Making the Trip More Convenient
Circular Store Information Search
Featured circular items
Coupons
Store location, hours, services, and map
Inventory Check
Voice and text-based search
Lists and Registries
Text message coupons now embedded in-app
Any item can be checked for instore availability
Source: Kantar Retail analysis and Target mobile app
Baby and Wedding registries can be managed, as well as shopping lists
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Shopping guides through the mobile
Source: Kantar Retail store visits and analysis
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Giving guests more options online
Source: Kantar Retail store visits and analysis
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Looking for a new in-store mobile app
• Partnered with Fast Company’s Co.Labs
• Launched during SXSW tech festival to attract talent
• $75K contest for the winning idea
• Goal to engage more guests in-store and across platforms
“Winning apps should address one or more of these:
•
Social : Enabling customers to interact with one another, or Target
• Education : Helping students, teachers, and schools be more successful, and improving the community
• In-store : Extending and improving the experience within the store, or until the next visit
•
Personalization
: Catering to the unique tastes and needs of each individual customer”
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Source: Kantar Retail research and analysis, fastcolabs.com/accelerator/retail

“Mobile transforms the retail experience by bringing together online and stores – putting power directly in the customers’ hands”
– 2012 Annual Report
Before 
Source: Company presentation, Kantar Retail analysis
During 
After
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Add Detail about the items
Before
Add coupons
Speak list into the phone
Source: Kantar Retail research and analysis
Is this how to get impulse items on the list?
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Walmart has capabilities, alignments already
Before
Spotzot’s SpotAds
• Testers included Walmart
• Mobile marketing is based on a shopper's activity:
– instant coupons, store info, links to sites, and price comparisons
• Geo-fencing to verify foot traffic: where and when
56% of Walmart shoppers with a smartphone say they would likely use location-based, personally targeted offers.
OneRiot’s Social Targeting Engine
• Send mobile content to audiences in specific geolocations, targeting by their interests, location, platform, and demographics
• Results reporting included performance metrics, audience interests, demographics, and audience influence data
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Source: ShopperScape ® March 2012, Kantar Retail research, analysis

“Social Connect”
• Piloted at two stores in San Jose, CA
During
Customer Service Kiosk
“Shop while you wait.
Get mobile alerts”
© Copyright 2013 Kantar Retail
Source: Kantar Retail research, store visit, and analysis

Particularly for SKU intensive categories…
"in-store mode":
• About 12% of Walmart's sales via its app are from customers in a Walmart, using "in-store mode."
During
When will we see signs of
QR codes to digitally add items to our basket?
Source: Kantar Retail analysis, store visits, company mobile app
© Copyright 2013 Kantar Retail

Training shoppers to use their phone in the store…
After
• Check-out via iPhone mobile app, while helping shoppers budget as they go
–Self check-out lane in ~1/2 of stores
• Pilot started in 2012, now at
Supercenters and N’Markets in:
– Arkansas
– Arizona
– California
– Colorado
– Georgia
– Washington
Walmart bought ~10,000 new self-checkout systems, letting it add
Scan and Go in 1500-
1800+ stores
– Stores to be added throughout 2013…
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Source: Kantar Retail research and analysis

After
• Mobile Self Check-Out, and
Mobile List also gives rise to new host of metrics:
–Conversion
–Time to purchase…
Walmart’s also looking at adding budgeting tools to its mobile capabilities
Might the retailer collect data, promote targeted ‘rollbacks’… to be a next generation loyalty offering?
Source: Company presentation, Kantar Retail research and analysis
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Walmart and Target
Walmart and Target are both focused on using the mobile device to enhance the store experience, before, during, and after the trip:
– Recognize that Walmart’s Scan & Go and Target’s associated mobile apps train shoppers to use their phone as a resource in the store
– Expect heightened sophistication of their shopper insights as they integrate mobile learnings, especially Walmart
– Articulate your strategy to reach shoppers at the shelf as these retailers’ mobile app usage becomes more commonplace: are you positioned to become category captains across devices?
– Ensure your mobile experiences are tailored to assist or entertain shoppers at that particular point of engagement; help them decide on a purchase or deepen their relationship with your brand
© Copyright 2013 Kantar Retail 37
Source: Kantar Retail analysis

Amy Koo
Senior Analyst
Amy.Koo@KantarRetail.com
501 Boylston Street
Suite 6101
Boston, MA
02116
T +1 617 912 2872
F +1 630 245 5647 www.KantarRetailiq.com
Robin Sherk
Director, Retail Insights
Robin.Sherk@KantarRetail.com
501 Boylston Street
Suite 6101
Boston, MA
02116
T +1 212 896 8191
F +1 630 245 5647 www.KantarRetailiq.com
© Copyright 2013 Kantar Retail