Enabling Intelligent Retail Today’S Agenda

Enabling Intelligent Retail Today’s Agenda

Transformational Our Strategy Partnering in Forces Action The evolution of Retail

1920 1957 1970 2000 2016 2018 Consumers begin The first “category Barcode scanners Internet penetration Traditional big AI continues to receiving killer”, Toys “R” are introduced at tops 50% in most box stores see influence the catalogues at home Us, opens major retailers developed retail mass closures retail value chain markets

DEPARTMENT STORES BIG BOX STORES E-COMMERCE OMNICHANNEL INTELLIGENT RETAIL

1909 1960 1962 1995 2007 2015 2017 Selfridge’s promotes The number of The first Walmart Amazon.com The first Major mobile The first cashier- shopping for leisure malls in the US opens in Rogers, opens for iPhone is payment less store, Amazon over necessity reaches 4,500 Arkansas business released apps launch Go, launches Customer Centric Intelligent Retail Shift from selling goods to new Personalized shopping experiences

46% App download Geolocation 60% device interactions are percentage of passive as users will consumer using retail accept information mobile apps on a surfaced from weekly basis Ad views In-store intelligent systems and & clicks movement machine learning

Smart kiosks Ecommerce Digital Physical World 150 30% World Number of percentage more sensors-enabled spend from an Connected devices consumers omnichannel Blogs displays will interact with shopper daily by 2020

Personalized Social media offers

Source: Microsoft IDC Retail Study, ASIA, 2018 New product features and services added by Korean off/online retailers in 2018 Coupang Rocket Delivery Order before midnight, get your order the next day

Rocket Wow Subscription-based free delivery 11st Direct Order Seamless, one-click check out (Simple payment service) Digital/ (바로오더) internet Naver Smart Store One-stop, easy to manage, shopping mall solution for small companies business owners Daum Kakao Talk Gifts An option to send gifts to Kakao friends from a selection of brands Kakao via messaging app, using Kakao Pay Kakao Shopping Shopping platform on Kakao messaging app

Lotte Smart Pick Order goods on-line, pick up in store Shopping Scan Shopping Customers scan QR codes of goods in store, check out using mobile application, goods are delivered within 3 hours Traditional Shinsegae SSG.COM Emart and Shinsegae online malls merged under one domain retailers + Emart Fast Delivery If customer orders goods from Emart before 3 PM, the goods are delivered by the end of the day Daybreak Delivery The goods are delivered starting with 6 AM Increase in numbers of single households & households with working parents stimulating the growth of online grocery shopping

Current market size, offline+online: USD 19.3 billion / 22조7000억원 Online only: 10% or USD 1.7 billion / or 2조원

2016: Market Kurly and Baemin Fresh were the first • Market Kurly raised USD 84.9 million/1000억원 from Sequoia Capital and other investors in 2019. to start fresh produce • Market Kurly investing in Coldchain, warehouse and delivery. Emart, Lotte Mart mobile refrigerator system, that keeps produce fresh. The and Homeplus followed in company is a trend setter for produce delivery their footsteps. Premium segment

2017: Coupang, We Make • Emart launched daybreak delivery in June 2019; the groceries Price and Hello Nature are delivered starting 6am (Coupang and Market Kurly have (acquired by SK Planet) similar offerings) • SSG.COM has capacity to process 131,000 orders daily started produce delivery • As a big box retailer, Emart continues to focus on volume sales and low price Low-cost segment Transformational Forces in Retail

China innovation Health, home, hospitality

Customer loyalty Commerce anywhere Marketplaces Responsive product development Nextgen logistics Intelligent systems Data security

Industry convergence New retailers Regulatory & tariffs Sustainability AI revolution

Reinvention brick & mortar Artificial Intelligence: the world runs on software AI Retailers will spend $7.3 billion on AI by 2022, Brick & Mortar Reinvention Over 78% of consumers would choose to spend money on an experience or an event “The possibilities of mixed reality are endless, and we will continue to explore and push the boundaries to make our customers fall in love with Natuzzi”

— Pasquale Junior Natuzzi Creative Director Our Strategy

Retail & Consumer Goods

Enabling DigitalDemocratizing Transformation AI —Healthcare Dive

—Reuters

Walgreens & Microsoft

partner to develop digital —Bloomberg healthcare services —Reuters

—The Wall Street Journal

—VentureBeat —Forbes —Bloomberg Our Vision: Enabling Intelligent Retail

Your customers. Your employees. Your data.

KNOW YOUR EMPOWER YOUR DELIVER INTELLIGENT REIMAGINE CUSTOMERS EMPLOYEES SUPPLY CHAIN RETAIL

Enable intelligent Enable your brand Close the gap between Reimage the customer customer journey ambassadors to delight demand and fulfillment to experience in Online & your customers delight your customers Offline Retail AN INTELLIGENT RETAIL CUSTOMER JOURNEY Microsoft Retail Scenarios & Solutions

Deliver intelligent Know your customers Empower your employees Reimagine retail supply chain

Enable customer first retail Close the gap between demand Enable your brand ambassadors Imagine the impossible and then and fulfillment to delight your to delight your customers make it happen customers

Unified Customer Intelligent Inventory Productive workforce Reimagine Stores

Unified Commerce Intelligent Supply Chain Reimagine Advertising

Intelligent Fulfillment

Intelligent Warehouse

Retail Data Workbench Microsoft Intelligent Retail Data Platform Building Customer Centric Intelligent Retail Organization

IoT Edge & Azure Digital Twins Dynamics 365 for Commerce Reimagine Azure Databox Edge Know your Dynamics 365 for Customer Insights Retail Customer D365 for Perception Analytics Retail Solution Reimagine Stores Azure Cognition Services Reimagine Advertising Unified Customer Unified Commerce RETAIL DATA Workbench

RETAILER’S AZURE DATA LAKE Data Share RETAIL DATA MODEL Azure Blockchain Deliver Intelligent Empower Microsoft Teams IoT Edge & Azure Digital Twins Supply Chain Employees Azure Databox Edge Intelligent Inventory Intelligent Supply Chain Workforce Enablement Intelligent Fulfilment Intelligent Warehouse Reimagine retail. Unlock new opportunities and capture new business

DIGITAL SHELVES ENABLE REAL TIME PRICING UPDATES AND PRODUCT INSPIRATION AT THE POINT OF PURCHASE REDEFINING THE SHOPPING EXPERIENCE Deliver Intelligent Supply Chain. Right product, right price, right time to right customer

CONNECTED DEVICES IN STORE ENABLES PREDICTIVE MAINTENCE, REDUCED WASTE AND PRODUCT CONSISTENCY THAT DELIGHTS CUSTOMERS Empower your people. Empower all employees to delight your customers

APPLYING NEW INTELLIGENCE ACROSS EVERY ENDPOINT TO ENABLE EMPLOYEES TO DELIVER A WORLD CLASS SHOPPING EXPEREINCE Know your customers. Superior, relevant service increases loyalty

CONNECTING ONLINE AND INSTORE DATA ENABLED SELECTION OPTIMIZATION TO BETTER SUIT THEIR CUSTOMER AND DROVE +38% SALES Customer Partnerships in Retail

Delivering eCommerce Delivered Smart Edge Unilever teams with Increased App usage, Cloud & AI partnership enablement, Platform solution; New business Microsoft to deliver AI Online Transactions, . Transformation & models to reinvent the assisted decision- Loyalty & Margin, Global Collaboration store making Supply-chain Co-Innovation transparency bean-to- cup

Empowering a mobile New and transformative Transformation of Driving additional Powering a circular workforce with data- experiences to health care delivery Energy Savings / fashion initiative & fueled insights customers & employees Optimization through reinventing store IoT experiences