«Comeback in the North»

«COMEBACK IN THE NORTH»

REMA 1000 TROMSØ

AMEDIA MARKET ANALYSIS JANUARY 2019 Case Summary

History/Background Challenge, Goal and Solution About REMA 1000 / Background

Norway’s biggest grocery chain In 2017 REMA 1000 experienced a huge drop in turnover, market share and reputation • National drop in turnover totalled 1.4 billion NOK • Implemented large changes in 2017: from 2016 til 2017 • Lost market share, while the other low-price chains • Changed the range Kiwi og Extra gained market share • Launched new loyalty programme • Reputation-loss: from 1st place on YouGov’s Brand reputation index in 2015 to 256 in 2017 • Changed media mix

• Reduced local advertising • Same situation/challenge locally in Tromsø as Grocery chainstore nationally. We have chosen to focus on the Share of Advertising Spend in Local newspapers in local/regional changes in order to isolate effect and Tromsø track local changes 100% 0 0 0 0 0 0 0 0 0 0 0 0 KIWI 0 0 0 0 75% COOP EXTRA SPAR 1 1 1 1 50% 1 REMA 1000 1 1 1 25% 0 0 0 0 0 0% 0 0 0 2017-Q1 2017-Q3 2018-Q1 2018-Q3 REMA 1000 Tromsø

CHALLENGE: GOAL SOLUTION:

In 2017 REMA 1000 experienced Arrest the negative trend • Chart the market locally: a huge drop in turnover, market positions, challenges and share and reputation development • Drop in turnover nationally totalled • Increase turnover 1.4 billion NOK from 2016 to 2017 • Increase shopping frequency • Lost market share, at the same time as the other low-cost chains Kiwi • Increase no. of customers in- • Local advertising and Extra took market share store/win back customers campaign, print and digital, inc. content marketing to • Reputation-loss nationally and • Strengthen position of “Low Cost” locally: fro 1st place on YouGov's strengthen reputation, Brand reputation index in 2015 to (Value for money) 256 i 2017 increase turnover and entice customers back

KILDE: NIELSEN, YOUGOV CHALLENGES

Decrease in Reputation, Turnover and Market Share CHALLENGE 2016 2017Grocery chain Market share 25% IN 2017 REMA 1000 24% experienced a huge drop in 23% reputation, turnover and 21% market share 19% 20%

• Reputation-loss:

13% from 1st place to 256 on 13% YouGov’s Brand reputation index 12% 11%11%

• Fall in turnover nationally: 6% 7%7% Minus 1.4 billion NOK from 2016 5% to 2017 (=170 million US $)

0% • Lost market share: REMA 1000 EXTRA SPAR Minus 4,1% (from 24,4% to 23,4%) at the same time as low-price competitors Kiwi og Extra took market share GOAL

Increase Reputation, Turnover and Market Share GOAL: Arrest the negative trend

Enhance reputation Increase shopping Strengthen position in «Low-cost» • REMA 1000 has • Increase turnover • REMA 1000 is Norway’s biggest grocery chain, historically scored top • Increase shopping marks in reputation focusing on LOW PRICES. frequency Positioning according to indices, but experienced «Low-cost» is therefore very a huge drop in 2017. • Increase customers in- store / win back important for the chain. In Goal for 2018: climb 2017 the chain’s score for customers towards the top again “Good value for money” dropped considerably, and the goal for 2018 was to increase this score SOLUTIONS

Advertising campaign in Nordlys • From 1 to 2 sections in Nordlys print: New “supplement” in Nordlys newspaper For REMA 1000 Nordlys expanded its print edition with a supplement called NordNorsk Exclusive advertising arena for REMA 1000 Debatt, where all REMA 1000 advertisements are featured exclusively i.e. without competitor advertisements. GOAL: enrich the reader experience AND create an exclusive advertising arena for REMA 1000 • In addition to the usual price+product ads in print/digital, a content marketing campaign was started, where the focus was on individual grocers, their background, their daily life, in order to build up a preference to shop locally.

• Creatively we expanded the print edition in order to create exclusivity for the advertiser, run print+digital campaigns of price/product and content marketing in order to encourage shopping locally and increase customers in-store.

• In the content marketing-supplements the focus is on individual grocers, inspiration for meals, advice and tips This is the new Nordlys supplement: REMA 1000 is the only advertiser in this section of the paper Amedia for REMA 1000 Tromsø 2018 Examples

Digital

Content Marketing

Christmas

Jul Jul ‘18

Aug‘18 Sep‘18 Nov‘18 Dec‘18

May‘18

Apr Apr ‘18 Oct ‘18

Jan Jan ‘18 Jun ‘18 Mar Mar ‘18 Feb Feb ‘18 Classics

Print: 2 fullpages + 1 half page every day. Nordlys has separated the newspaper into 2 parts; all REMA 10000 ads are placed in the supplement (part 2). In this way noise from other chains is reduced, REMA 1000 is the only grocery chain in this supplement.

Content Marketing: Monthly magazine inserted in the print edition of Nordlys roughly once per month. The magazine is digitised and published on nordlys.no and Nordlys’ Facebook feed. The magazine also contains video reports.

Digital: Banner ads and Netboards, plus full-screen mobile and desktop (SOV = 25%) Ad solutions Content Marketing Print: Build preferences focusing on individual grocers / Get to know us

REMA 1000 Content Marketing: Everyday life / Get to know us Ad solutions Content Marketing Print: Build preferences focusing on individual grocers / Get to know us

REMA 1000 Content Marketing: Everyday life / Get to know us Ad solutions digital: combination of inspirational campaigns and price/product Ad solutions print: combination of inspirational campaigns and price/product RESULTS

The decline which REMA 1000 experienced in 2017 is stopped and reversed to positive results in Troms/Finnmark Uplift in Troms: Positive buzz REMA 1000 Reputation increase for REMA 1000: Increasing numbers expressing a positive impression

• REMA 1000 is the brand with biggest positive growth of all brands and industries in the index for 2018

• REMA 1000 at the same level as its competitors 2016 2017 2018 after an all-time low

High positive buzz for Huge drop in REMA Dramatic increase in REMA 1000 and 1000s reputation, reputation for REMA competitors from positive to 1000 negative

SOURCE: YOUGOV BRNADINDEX FOR REGION TROMS/FINNMARK JAN2016-JAN2019 Uplift in Troms: Satisfied customers REMA 1000

• Historically REMA 1000 had the biggest proportion of satisfied customers (Year 2016). • Proportion of satisfied customers fell dramatically in 2017 • Strong increase in satisfaction for REMA 1000 in 2018. Huge upswing throughout 2018 • REMA 1000’s increase in 2016 2017 2018 satisfaction is unique

compared to their peers REMA 1000 has by REMA 1000 in steady REMA 1000: positive far the best score on decline uplift: more satisfied satisfied costumers customers

SOURCE: YOUGOV BRNADINDEX FOR REGION TROMS/FINNMARK JAN2016-JAN2019 Uplift in Troms: Purchase Intent REMA 1000 and competitors • Historically REMA 1000 has had the highest purchase intent (Year 2016). • Throughout 2017 purchase intent fell for REMA 1000, while it increased for competitor chains. • From Q1 2018 purchase intent stabilised for REMA 1000. • From Q2 2018 and throughout 2018 purchase intent increased demonstrably for REMA 1000. • Result: People in Troms will 2016 2017 2018 increasingly shop at REMA 1000 REMA 1000: stabile REMA 1000 in steady REMA 1000: positive and high score for decline uplift Purchase Intent

SOURCE: YOUGOV BRNADINDEX FOR REGION TROMS/FINNMARK JAN2016-JAN2019 Uplift in Troms: Good value REMA 1000 • Historically REMA 1000 is the chain scoring highest on “Good value for money” (Year 2016). • 2017 a downturn in relation to people’s view on REMA 1000 giving “value for money”. • The view of REMA 1000 giving “value for money” stabilised around New Year 2017/2018 • Strong increase in relation to people’s views on REMA 1000 giving 2016 2017 2018 “value for money” in 2018. REMA 1000 is by far REMA 1000 in steady REMA 1000: positive considered the best decline • No-one had a bigger uplift increase in this area than brand for «Good REMA 1000 in 2018. value»

SOURCE: YOUGOV BRNADINDEX FOR REGION TROMS/FINNMARK JAN2016-JAN2019 Decline which REMA 1000 experienced in 2017 stopped and reversed to positive results in Troms/Finnmark: • Reputation increase: Our own research shows: Rising share with positive • Increased daily shopping frequency among REMA 1000 customers in Concept chans’ share of net view grocery turnover (Nationally) Tromsø: +233% År 2017 Q3 År 2018 25% • Low-cost: Increasing • Increased share of people shopping Increasing view that REMA 1000 23%24% more often at REMA 1000 now than market share for gives good value for before: 21% REMA 1000 in 21% 2018 • For Tromsø’s population: +22% 19% money • For those preferring REMA • Increased purchase 1000: +31% intent 13% 13%13% • Increased share of 11%10% satisfied customers

6% 7%7%

5%5%5%5% 4%4%4%4%4%4% 2%2% 0% REMA 1000 MENY COOP PRIX BUNNPRIS ADVERTISING TEST REMA 1000 • ENGAGEMENT • LIKES • PURCHASE INTENT • MULTI MEDIA-EFFECT REMA 1000-ads in Nordlys print and web 10 December 2018 High advertising Can you remember seeing this or similar ads for REMA 1000 In the print edition of Nordlys in the last few days? YES 65% engagement 70% 61% 56% 56% 56% 53% 43% 1. PRINT: 35% • 56% can remember seeing the print ad from REMA 1000 18% i Nordlys 0% • Above average for full-page Total Kvinne 45 år+ grocery sector print in Norway (=53%)

2. WEB:

• 38% can remember seeing Can you remember seeing this or similar ads for REMA 1000 On Nordlys.no recently? the web ad from REMA 1000 YES on nordlys.no 55% 44% 40% 41% 44% 38% 36% • Above average for web ads 32% grocery sector in Norway 33% (=30%) 22% 11%

0% Total Kvinne 45 år+ Multimedia-effect?

Have only seen PRINTHar kun sett DIGITAL campaign -Kampanjen

Have seen BOTH PRINT+DIGITAL HUGE multimedia-effect!

%-LIKING, SHOPPING and VISITING ARE FAR HIGHER AMONGST THOSE WHO HAVE SEEN THE CAMPAIGN IN BOTH CHANNELS THAN THOSE WHO HAVE ONLY SEEN IT IN ONE CHANNEL 88%

70% 67%

53%

35% 30% 27% Liking, Shopping and Visiting are far higher amongst those who have 18% seen the campaign in both channels than those who have only 0% LIKING Shop at REMA 1000Visit REMA 1000 store seen it in one channel

SOURCE: QUESTBACK/AMEDIA WEBUNDERSØKELSE TROMSØ DECEMBER 2018 BASE/SAMPLE: TROMSØ MUNICIPALITY/LNOTICED CAMPAIGN: 371 RESPONDENTS This is what Rema 1000 are saying in the media

“Rema 1000 has increased activity in many channels in the last year. Print is one of the areas that we have increased investment in. It’s important for our Grocers to contribute to local media, and we view local newspapers as a medium which reaches a large and attractive target group. Print combined with digital advertising is an important medium for us”, Communications Director Mette Fossum by email to Medier24. amediamarked.no