J Sainsbury Plc · LSE:SBRY

J Sainsbury — Investor Day (October 2021)

54 slides from J Sainsbury's investor day presentation, Oct 14, 2021

Slide 1: Nectar Deep Dive Event
Nectar Deep Dive Event Nectar Deep Dive ` 14 October 2021
Slide 2: The Team
The Team Mark Given Alex Jardine Chief Marketing Officer Head of Analytics Operating Board Member with Leads our Analytics teams across accountability for Marketing, Loyalty Marketing and Nectar360, with (B2C & B2B) and ESG. accountability for a broad range of capabilities from Data Science to Comme
Slide 3: Welcome
Welcome Welcome Mark Given 13.00 UK and Global Market Mark Given 13.05 Context Nectar B2C Alex Jardine and 13.20 Alex Naisby Break 13.45 Nectar360 B2B Amir Rasekh and 13.55 Alice Hawcroft Break 14.25 Mark Given, Amir Q&A - Ask the panel 14.35 Rasekh, Alex Jardine, Alex Naisby Closing comments Mark G
Slide 4: What we'll cover today
What we’ll cover today Global & UK Nectar B2C Nectar360 B2B Q&A market context The trends Driving the Retail Who we are and Ask the panel shaping loyalty and strategy, and a what we do retail media winning coalition Winning in Data and Digital ©Nectar360 2021 4
Slide 5: Nectar is a core part of our strategy
5 Nectar is a core part of our strategy • Better value and innovation • Customer and profit focus • Structurally lower operating • Underpinned by buying • Supporting the core food costs to fuel investment in the benefits and lower cost business core to serve • Cutting complexity and increasing pace
Slide 6: Global & UK market context
Nectar360 Investor Session 2021 Global & UK market context The trends shaping loyalty and retail media ©Nectar360 2021 6
Slide 7: Channel shifts are disrupting how retailers and manufacturers go to market
Channel shifts are disrupting how both retailers and manufacturers go to market Market Context UK grocery forecast growth by format 2021-25¹ UK grocery 2021 forecast % CAGR revenues¹ by format £bn Discount 4.5% Discount Convenience 28 Online 3.7% 45 Online 22 Convenience 2.2% 16 Supermarkets 0.1% Hy
Slide 8: Online is disproportionately important for growth
Online is disproportionately important for growth - both pre and post pandemic Market Context UK online channel share of grocery sales Online growth contribution as % of overall growth 10.5% 39% 36% 5.5% 5.9% 5.2% 5.8% 6.0% 6.1% 16% 11% Coming soon 2017 2018 2019 2020 2017 2018 2019 2020 ©Nectar360
Slide 9: Customers expect greater personalisation
And with this, customers expect greater personalisation Market Context The Challenge In a congested digital landscape, brands need to stand out Customer research tells us that: 91% 86% 63% are more likely to spend with of UK consumers say it is of consumers expect brands who provide relevant importa
Slide 10: Retailers with online presence and first party data can become digital media players
Retailers with an online presence and first party data can become significant digital media players Market Context 1 2 3 4 Shift to Measurement Deeper audience Future death of eCommerce and attribution insights the 3rd party cookie 49% 45% 20% ~12-24 month increase in eCommerce1 of marketers expect
Slide 11: The UK digital media network market is projected to grow to £4.5bn
The UK digital media network market is large and projected to grow to £4.5bn by 2025 Market Context Addressable UK Digital Media Network Market size 2021-251* 2021-25 CAGR +11% CAGR £4.5bn 1% 26% 2 2 1 £3.0bn 2% +1.5% +3.7% +11% 14% 73% 84% Total Online Digital retail grocery grocery media market ma
Slide 12: Advanced retailers are scaling digital media network capabilities, especially in the US
The most advanced retailers are successfully scaling their digital media network capabilities, Market Context especially in the US Retailers are investing significantly in digital What we’ve heard - retailers media networks 5 years from now we expect to be…in top 10 advertising platforms in the 2019
Slide 13: We are well placed to capitalise on this opportunity
We are well placed to capitalise on this opportunity and deliver strong growth for Market Context Sainsbury's in 2021 and beyond Coming soon ©Nectar360 2021 13
Slide 15: The UK's largest coalition loyalty programme
The UK's largest coalition loyalty programme Nectar B2C THE WHAT? THE WHO? 17.5m 6-15% Nectar incremental customers spend for coalition partners 29 Nectar 43bn scans Points issued per second annually £13 8.2m Average customer Digital Nectar redemption value registered THE WHY? ©Nectar360 2021 16
Slide 16: A winning ecosystem for our partners and customers
A winning ecosystem for our partners and our customers Nectar B2C MY REGULAR RETAIL SPEND MY DISCRETIONARY SPEND Our customers benefit from MY TRAVEL collecting and redeeming their SPEND points across an ecosystem of the UK's leading brands and 100's more POINTS COLLECTED POINTS REDEEMED through our
Slide 17: The Economics of Nectar
The Economics of Nectar Nectar B2C Access to Nectar currency and brand - + Points Points Marketing channels and CRM Issuance Redemption Revenue Cost Insights and Analytics Strategy and Account Management Partner pays Nectar for Nectar pays Partner for Partners pay Nectar for each point issued each p
Slide 18: Nectar is key to connecting to our customers
Nectar is key to connecting to our customers, knowing and serving them better Nectar B2C Age Market research Location Customer attitude Gender Personas Lifestage Loyalty WHO WHY Affluence Basket data Promotions WHAT HOW Missions Rewards Coming soon Channels Segmentation Contactability ©Nectar360 202
Slide 19: Journey to 10m registered app users
This deep understanding is powering our digitisation, and our journey to 10m Nectar B2C registered app users 10m 9m 10m 8m Forecast 7m 8.2m Registrations Registrations boosted by our 6m biggest Nectar 5m campaign since 4m launch in February 2021 3m 2m 1m WHAT HOW Coming soon 0m Oct Sept 2019 2021 ©N
Slide 20: Digital engagement with points offers drives sales at strong ROI
Driving digital engagement with points offers is key to driving sales at a strong ROI Nectar B2C Incremental Grocery sales 3x More points collected ROI WHAT x3-5 Coming soon ©Nectar360 2021 21
Slide 21: Personalisation and gamification drives engagement
Personalisation and gamification drives engagement Nectar B2C Fruit & Veg Challenge Year in Review Collect for Christmas 500k +7% WHAT High 500k volume of 1.25m £8.7m Coming soon customers YoY customers customers social points engaging increase in engaging engaging media added sign-ups shares ©Necta
Slide 22: Nectar Prices initially launched on SmartShop
Nectar Prices initially launched on SmartShop Nectar B2C MEASURES Customer potential OF SUCCESS 1 sales value score INCREASED LOYALTY 2 Price sensitivity score INCREASED SHARE OF WALLET DIGITAL 3 Product offer types ENGAGEMENT WHAT VALUE PERCEPTION DRIVER 4 Personalised pricing ©Nectar360 2021 23
Slide 23: Our personalisation engine delivers unique offers
Our personalisation engine allows us to deliver truly unique offers Nectar B2C High Price Sensitivity Offers: 7 Low Price Sensitivity Offers: 10 Med Potential Value Score Avg Discount: 30% High Potential Value Score Avg Discount: 20% ©Nectar360 2021 24
Slide 24: Increasing visibility of Nectar across grocery channels
Increasing visibility of Nectar across all our grocery channels remains a priority Nectar B2C Smartshop Groceries online app Groceries online web ©Nectar360 2021 25
Slide 25: Rollout of Nectar into Argos is showing positive early results
Rollout of Nectar into Argos is showing positive early results Nectar B2C Enhanced customer data 3.5m Linked Accounts Connected Customer across Group Retail brands Sales and ROI ahead of forecast Increased purchase frequency with less loyal customers ©Nectar360 2021 26
Slide 26: Strong engagement across our largest Nectar partners
We're seeing strong engagement across our largest Nectar partners Nectar B2C 6-15% +7m* customers engage with non- incremental sales for partners Sainsbury's Gateway brands `````` `` 250m * `` 77% of customers who scan with Nectar transactions with non- Sainsbury's Gateway brands both Esso and eBay
Slide 27: Continually strengthening the Coalition
We're continually strengthening the Coalition Nectar B2C New Partners Renewals & extensions Coming soon ©Nectar360 2021 28
Slide 28: Break
Nectar Deep Dive Event Break Please return in 10 minutes Please return in 10 minutes Thank you
Slide 30: Nectar360 is a loyalty, insights, and marketing business
Nectar360 is a loyalty, insights, and marketing business. Our clients invest in four core services: Nectar B2B Loyalty: Shopper Marketing: Data and Insights: Digital Media: retained long-term advertising bespoke analytics and advertising onsite (sainsburys.co.uk Nectar partnerships in and around sto
Slide 31: Services to over 700 FMCG and GM brands
We provide data, insight and marketing services to over 700 FMCG and GM brands Nectar B2B ©Nectar360 2021 32
Slide 32: Shopper Marketing channels engage customers in-store
Our Shopper Marketing channels allow brands to engage customers throughout Shopper marketing their in-store journey ©Nectar360 2021 33
Slide 33: Winning in data and insights
Winning in data and insights We help brands understand customers Data & Insights as well as we do Recently launched Sainsbury’s Insight Platform In the process of building a version for Argos An intuitive self-serve platform, allowing suppliers to understand customer behaviour Supplier satisfaction
Slide 35: Winning in digital media
Winning in digital media We have invested in data and technology to create Digital Media our Digital Media Network SAINSBURYS.CO.UK ARGOS.CO.UK DIGITAL TRADING (onsite advertising) (onsite advertising) PLATFORM (offsite advertising) ©Nectar360 2021 36
Slide 36: Well placed to accelerate growth in Digital Media Network
We are well placed to accelerate our growth into the growing Digital Media Network market Digital Media 1st PARTY ENHANCE THE OPTIMISATION & DATA AT THE CUSTOMER MEASUREMENT HEART EXPERIENCE POWERED BY CONNECTING BRANDS DELIVERING CUSTOMER & CUSTOMERS ACROSS TRANSPARENCY CONTROL & TRUST ALL DIGITAL
Slide 37: Onsite media platform live across Sainsburys.co.uk and argos.co.uk
Our onsite media platform is now live across Sainsburys.co.uk and argos.co.uk Digital Media What does this mean? • The platform allows suppliers to target and measure their onsite media (advertising) in real-time. • 1:1 media is surfaced, based on relevancy. • Cost Per Contact model; suppliers pay w
Slide 39: Let's show you the platform working in real time
Let’s show you the platform working in real time…. ©Nectar360 2021 40
Slide 40: Offsite Digital Trading Platform
We have also built an offsite Digital Trading Platform Digital Media Our Digital Trading Platform is a proprietary offsite advertising offering, which allows brands to engage customers across the wider web and on social platforms, based on Nectar audiences. How does it work? Nectar360 DTP Nectar360
Slide 41: What does this mean in practice?
What does this mean in practice? Digital Media Nectar audience selection Campaign execution Optimisation Audience 1: Audience 1: Existing Persil customers 7% Conversion rate Audience 2: Audience 2: Nectar customers who have 6.9% Conversion rate purchased 2+ competitor products in the Laundry aisle A
Slide 42: Measurement shows strong performance
Our measurement shows strong performance; customers are engaging with Digital Media greater advertising relevance online 6 million Impressions served to 119 thousand Households with 7.78% Conversion to brand £1.25 Return on advertising spend ©Nectar360 2021 43
Slide 43: Plan to fully integrate our Digital Media Network
In future, we plan to fully integrate our Digital Media Network Digital Media Digital Trading Platform Connected TV Brand awareness Onsite Media Platform Brand conversion Nectar App Brand loyalty ©Nectar360 2021 44
Slide 44: Well placed to accelerate growth in Digital Media Network
We are well placed to accelerate our growth into the growing Digital Media Network market Digital Media 1st PARTY ENHANCE THE OPTIMISATION & DATA AT THE CUSTOMER MEASUREMENT HEART EXPERIENCE POWERED BY CONNECTING BRANDS DELIVERING CUSTOMER & CUSTOMERS ACROSS TRANSPARENCY CONTROL & TRUST ALL DIGITAL
Slide 45: Digital Media Network is a key driver of our growth
Our Digital Media Network is a key driver of our growth Forecast incremental Nectar360 group Nectar360 billings – 5 year plan profit contribution Billings growth 25%+ +£60-70m additional profit by 25/26 £345m 30% Digital Media 21% 10% Data & Insights 8% 10% Shopper Marketing 12% 59% 50% Loyalty 21/2
Slide 46: Break
Nectar Deep Dive Event Break Please return in 10 minutes Please return in 10 minutes Thank you
Slide 49: Closing thoughts
Nectar Deep Dive Event Closing thoughts Please return in 10 minutes Mark Given Chief Marketing Officer
Slide 51: Nectar360 Glossary of Terms
Nectar Deep Dive Event Nectar 360 – Glossary of ` Terms
Slide 52: Glossary of Terms
Glossary of Terms Term Definition The firsthand customer data collected when a Nectar customer scans their Nectar card with one of our partner brands, either online or in-store. The data is permissioned, meaning the customer consents to Nectar first party data sharing this information with Nectar. T
Slide 53: Glossary of Terms cont'd
Glossary of Terms cont’d Term Definition The additional spend generated by customers of coalition brands who are Nectar collectors, and who have been encouraged to spend more with that partner as a result of their ability to collect Nectar points. For Incremental spend for coalition partners example
Slide 54: Glossary of Terms cont'd
Glossary of Terms cont’d Term Definition The planning, design, execution and measurement of integrated brand campaigns across Sainsbury’s [Nectar360] Shopper Marketing media channels in and around store. Deep, 360-degree understanding of the customer to enable improved decision making and the [Necta

J Sainsbury — Investor Day (October 2021) on 6ix

J Sainsbury — Investor Day (October 2021)

Slide 1: Nectar Deep Dive Event

Slide 2: The Team

Slide 3: Welcome

Slide 4: What we'll cover today

Slide 5: Nectar is a core part of our strategy

Slide 6: Global & UK market context

Slide 7: Channel shifts are disrupting how retailers and manufacturers go to market

Slide 8: Online is disproportionately important for growth

Slide 9: Customers expect greater personalisation

Slide 10: Retailers with online presence and first party data can become digital media players

Slide 11: The UK digital media network market is projected to grow to £4.5bn

Slide 12: Advanced retailers are scaling digital media network capabilities, especially in the US

Slide 13: We are well placed to capitalise on this opportunity

Slide 14: Nectar B2C

Slide 15: The UK's largest coalition loyalty programme

Slide 16: A winning ecosystem for our partners and customers

Slide 17: The Economics of Nectar

Slide 18: Nectar is key to connecting to our customers

Slide 19: Journey to 10m registered app users

Slide 20: Digital engagement with points offers drives sales at strong ROI

Slide 21: Personalisation and gamification drives engagement

Slide 22: Nectar Prices initially launched on SmartShop

Slide 23: Our personalisation engine delivers unique offers

Slide 24: Increasing visibility of Nectar across grocery channels

Slide 25: Rollout of Nectar into Argos is showing positive early results

Slide 26: Strong engagement across our largest Nectar partners

Slide 27: Continually strengthening the Coalition

Slide 28: Break

Slide 29: Nectar360 B2B

Slide 30: Nectar360 is a loyalty, insights, and marketing business

Slide 31: Services to over 700 FMCG and GM brands

Slide 32: Shopper Marketing channels engage customers in-store

Slide 33: Winning in data and insights

Slide 34: Data & Insights

Slide 35: Winning in digital media

Slide 36: Well placed to accelerate growth in Digital Media Network

Slide 37: Onsite media platform live across Sainsburys.co.uk and argos.co.uk

Slide 38: Digital Media

Slide 39: Let's show you the platform working in real time

Slide 40: Offsite Digital Trading Platform

Slide 41: What does this mean in practice?

Slide 42: Measurement shows strong performance

Slide 43: Plan to fully integrate our Digital Media Network

Slide 44: Well placed to accelerate growth in Digital Media Network

Slide 45: Digital Media Network is a key driver of our growth

Slide 46: Break

Slide 47: Q&A Ask the panel

Slide 48: Nectar360 Investor Session Q&A

Slide 49: Closing thoughts

Slide 50: Thank you

Slide 51: Nectar360 Glossary of Terms

Slide 52: Glossary of Terms

Slide 53: Glossary of Terms cont'd

Slide 54: Glossary of Terms cont'd