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What Is Driving Retail in 2016 (US and Europe)

BRICK & MORTAR RETAILERS CONTINUE TO EXPERIENCE TRAFFIC DECLINES-
• US mall traffic has declined for 37 consecutive
months and continues to be challenging
• Feb. 2016 store traffic dropped by 6.6% YoY
• Malls have seen an average drop in traffic of 9.3%
YoY
• High-end malls appear less affected
– GGP traffic up 2% in 2015
– Simon traffic up 1.5% in 2015
– Taubman traffic up in 2015

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Golden Seeds Presentation

• Fung Global Retail & Technology advises retailers, real estate developers and tech companies on projects situated at the intersection of retail,
tech and/or fashion
• Our team offers a robust knowledge bank and significant experience in the retail, fashion and tech fields. We are involved in many areas of the
business and believe this allows us to offer a unique perspective by focusing on the future and where the sector is heading

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4Q2015 Recap and Spring Preview (Planalytics)

Q4 2015 Wrap-up and Spring Retail Trends
1. Q4 2015: Tough Holiday, Mixed Results
2. Q4 2015: Home and Off-Price Retailers Lead Growth
3. Home Improvement Retailers: Continued Benefits from Housing Market
Recovery
4. Off Price Sector: Out Performs the Industry

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Retailment Driven Trends

Alchemist Accelerator is an accelerator exclusively for startups whose revenue comes from enterprises, not consumers.
CoCoon is a coworking space where entrepreneurs, creative talent, successful leaders and investors meet,
collaborate and deliver results together. Member companies get access to networking opportunities, work space, a photography studio and mentors.
Entrepreneurs Roundtable Accelerator (ERA) provides participant companies with an intensive four-month
program, with the goal of helping early-stage companies progress rapidly into exciting, viable businesses.

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The Future of Digital Retail

• Anticipating future trends and developments
• Plan for future value and avoid obsolescence
– What problem are you trying to solve?
– How will the solution be used?
– How robust does it need to be?
• Ensure flexibility to manage changing formats and deployment patterns

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The Future of Digital Retail

TOP 16 RETAIL TECH TRENDS FOR
2016
1. Additive
Technology: Intelligent Clothing
2. 3D Printing
3. Robotics/Artificial Intelligence
4. Drone Delivery
5. Smart Malls & More…….

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2015 Holiday Recap

Consumer & Retailer Behavior – Holiday 2015
• Shoppers began their holiday shopping early this year – nearly half
started shopping before the Black Friday weekend
• Online has become a major channel for holiday shopping, with 6 in
10 of those surveyed saying they will shop mainly online
• 4 in 10 shoppers surveyed planned to spend more than $500 and
33% of young shoppers planned will increase their spending
compared with last year

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2015 Holiday Homestretch

Cyber Monday leads the weekend as the biggest day for sales with
$3.1 billion in sales
2. Black Friday performance suggests consumer is in good shape;
Apparel category remains under pressure while deals focused
around electronics
3. Retailers generally pleased with their Black Friday performances
despite weak traffic
4. Black Friday metrics favor e-commerce as estimates suggest store
sales to be flat to down slightly with online sales up ~10%

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Disruptors – Physical and Digital

– CVS Health: 37% of 2014 capex was on technology and
other corporate initiatives
– Nordstrom: 35% of 2014 capex; plans to spend $4.3 billion
(5% of sales) over next five years
– Walmart: 29% of 2014 US capex; spending “$1.2–$1.5
billion in e-commerce websites and mobile commerce
applications”
– Home Depot: “Tilting investments towards interconnected
retail and technology

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Top Ideas on Global Retail and Tech

FBIC TOP 20 RETAIL & TECH TRENDS
1. Ecommercification: More Convenient Payment
2. In-Store Shopping Becomes More Purposeful
3. Webrooming
4. Increasingly Personalized Shopping
5. At-Home Beauty Devices Limit Salon Visits
6. Geofencing and Beacons Enable Location-based Marketing

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Doing Business in China

$1.63 billion in sales are made in the first 38 minutes
• 42.6% of sales are made via mobile devices
• The first domestic order is delivered in 15 minutes
• The first cross-border order is delivered in 2 hours
• In 2014, Alibaba offered an 11.11 shopping festival to global shoppers

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2015 Back-to-School Outlook

Consumer purchase mentality—What do we need now? A Just in Time Shopper
Macy’s reacts to this shopping behavior by rolling out same-day delivery to additional stores
Look for traditional shopping seasons to continue to blur
Black Friday style sales in July
Harder for retailers to post sales and earnings gains.
Continued IT investments—Mobile, Click & Collect, Personalization, Omnichannel—all mandatory to maintain share
Most categories hovering in deflationary territory

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