Maximizing Retail Success Through Co-Creation Strategies

Marie Macha Birte Cappenberg Patrick Pohla Simon Prinz

The future of retail lies in the satisfaction of creators and consumers

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Agenda 01 | Management Summary 02 | Analysis and Alternatives 03 | Implementation 04 | Financials and Risks 05 | Conclusion January 2023 Co-Creating Value 3 M nster Consulting

01 Management Summary

Analysis and Alternatives Implementation Financials and Risks Conclusion Management Summary How our strategy will maximize Walmart s benefit from eliminating their customer s pain points Impact Host events with creators Support Co-Creation and launching of creator products Encourage creator engagement throughout the value chain Co-Creating Value Strategy 200 Number of events per month Creators face difficulties in growing and diversifying while remaining authentic Consumers are switching from materialism to preferring experiences Walmart is constantly searching for additional revenue growth 48 % Sales growth co-created products Challenges + 1.5 % Influencer engagement How can Walmart change the future of retail by solving the main problems of Walmart's two customer groups? Question January 2023 Co-Creating Value 5 M nster Consulting

02 Analysis and Alternatives

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion There are two key target groups emerging with common interests Creators Consumers Hard to get noticed Lack of experience and network Limited income potential Need to diversify Difficult to produce your own products Difficult to get products into stores Missing authenticity Prioritizing experiences Materialism and waste Missing authenticity Common interests Creators Consumers Common interests Need for authenticity Increased engagement and collaboration Content in return for entertainment January 2023 Co-Creating Value 7 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion There are six megatrends that are most influential to transform the retail industry Instant Entrepreneurship Curation Tribalism Experiences Co-Creation Authenticity January 2023 Co-Creating Value 8 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Both internal and external factors need to be considered Strengths being the most influential Threats Strengths Disruptive innovation Competition Creators selling directly to consumers Flywheel business model: Walmart Infrastructure Strong corporate values Strong customer centricity Focus on concept developing process based on divergent thinking and loops EXTERNAL FACTORS INTERNAL FACTORS S T Opportunities Weaknesses W O Creator reach is increasing Walmart US launch of Walmart Creator Societal trends Lack of presence in urban areas Missing experience with content creators January 2023 Co-Creating Value 9 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Based on the multi-perspective analysis, three alternatives have been developed Multi- perspective analysis Platform for collaboration Offer experience for both consumers and creators Help creators to grow Leverage Beta version of Walmart Creator Address consumers Platform to diversify Help creators to grow by offering marketplace Create shopping experience for consumers Combined key results Co-Creating Value Offer platform for consumers and creators to collaborate during the product journey Launch Walmart Creator Introduce Walmart Creator in Canada to gain revenues through affiliate marketing Creator Marketplace Offer marketplace in Walmart stores to creators to advertise their products Alternatives January 2023 Co-Creating Value 10 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion The recommended strategy Co-Creating Value offers collaborated benefit for all stakeholders Criteria Co-Creating Value Launch Walmart Creator Creator Marketplace 1. Corporate Values 1 2 3 1 2 3 1 2 3 2. Testing 1 2 3 1 2 3 1 2 3 3. Entrepreneurial Drive 1 2 3 1 2 3 1 2 3 4. Collaborated benefit 1 2 3 1 2 3 1 2 3 Overall score: 11 6 8 January 2023 Co-Creating Value 11 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion With Co-Creating Value four of the most influential megatrends are addressed Instant Entrepreneurship Curation Tribalism Experiences Co-Creation Authenticity January 2023 Co-Creating Value 12 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion By implementing the Co-Creating Value approach, creators across all four dimensions are approached Recommender (Influencer) Podcaster Product Reviewer Educator Blogger Type of Creator Artist Writer Builder (Creator) Coach Vlogger Home & Design Experts Health & Wellness Sports Aficionados Tech Wizards BookTokers Beauty Gurus Fashionistas Content Category Lifestyle Vlogger Family People Foodies DIYers & Artists Professionals TikTok YouTube LinkedIn Instagram Platform Pinterest Twitch Discord Facebook Mega (1M+) Nano (1K-10K) Micro (10K-50K) Macro (500K-1M) Mid Size (50K-500K) January 2023 Co-Creating Value 13 M nster Consulting

03 Implementation

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Three pillars will lead to the success of the Co-Creating Value strategy Co-Creating Value 1 2 3 Event hosting Facilitate Co-Creation Creator engagement January 2023 Co-Creating Value 15 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Hosting events of smaller creators will bring experiences to consumers and consumers to creators Host events in Walmart stores across the country with creators What? Small influencers are struggling to grow their viewership Consumers ask for experiences, not only products Walmart has a lot of suitable locations Why? Offer products used in the event Live cooking Cosmetics try-outs Host different event every month How? Gaming tournaments Give away discount coupons Planting lessons January 2023 Co-Creating Value 16 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Facilitating Co-Creation will ensure wanted products are launched and sold at Walmart Support Co-Creation and launching of products by providing network and knowledge What? Creators are closer to the consumer Consumers want products that suit their needs Walmart has an extensive network of suppliers and supply chain partners Why? Create point of contact throughdesignated department Supplier Walmart Creators How? Connect creator with the best suited supplier Consumers January 2023 Co-Creating Value 17 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Engagement of creators in their process will bring the whole product journey closer to the consumer Let creators engage in the value chain of their product from production to delivery What? Consumers want authenticity of the creators Creators have more opportunities for content creation and stay close to their viewership Why? Allow streaming the product journey Development Let influencers deliver their products Delivery Production How? Testing Creators and their products are more authentic Product Journey January 2023 Co-Creating Value 18 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Our proposed implementation is addressing the five most important trends in the creator economy space Livestreaming Leverage already existing range of creators on existing platforms New Spaces to Monetize Support launch of creator products and offer distribution channel Power to the Creator Offer opportunity to monetize audience, e.g. by value chain integration Companion Content Possibility to share product development insight, behind the scenes, etc. Rise of the Micro Influencer Events with creators boost their reach in an authentic way January 2023 Co-Creating Value 19 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Gantt-chart provides guidance regarding the time horizon of the testing steps of Co-Creating Value Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 2025 2026 Market research Event hosting Decide on a suitable event type and location Approach influencer for test event Facilitate Co-Creation Search for participating suppliers Launch test product with suitable influencer Creator engagement Identify possible creators Try-out phase Roll-Out January 2023 Co-Creating Value 20 M nster Consulting

04 Financials and Risks

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Different KPIs can be used in order to track the successful implementation of Co-Creating Value initiatives Event hosting Product Co-Creation Creator engagement Number of events per month Sales growth co-created products Influencer engagement KPI Target for 2027 200 48% + 1.5% Yearly Investments CAD 9.6 mn. CAD 5.6 mn. CAD 1.4 mn. Overarching KPI for steering purposes: Net Promoter Score January 2023 Co-Creating Value 22 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion A higher Net Promoter Score has a positive impact on sales from two sides Impact of a higher Net Promoter Score Higher customer retention in customer target groups Number of purchases Customers tempted to buy more often Walmart s revenue streams More products overall will be sold Average purchase value Attractive prices can be set being a close partner of influencers January 2023 Co-Creating Value 23 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Co-Creating Value ensures additional values from 2024 onwards as customers increase their average purchase value Forecasted net revenue streams (in mn. CAD) Underlying assumptions $900.00 25% of daily customers (online and offline) are assumed to be a concrete target group $800.00 $700.00 $600.00 Moderate overall customer growth of 3% $500.00 $400.00 $300.00 Average purchase value by customer will increase by $4.2 until 2027 $200.00 $100.00 $0.00 2024 2025 2026 2027 Additional revenues will rise up to 776 mn. CAD per year in 2027 January 2023 Co-Creating Value 24 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion The strategy is exposed to various risks which can be mitigated by effective countermeasures Risks and how to mitigate them Risk Matrix Risk Countermeasure Impact Established iterative process reduces chance of failing Launch of unsuccessful products A A B Ensure high satisfaction of creators and customers Other retail companies copy approach C B Pursuing customer feedback loop ensures satisfied consumers Failed live-event throws bad image on other events C Probability January 2023 Co-Creating Value 25 M nster Consulting

05 Conclusion

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion With Co-Creating Value, you will be able to maximize Walmarts benefits from eliminating their customers problems Next steps How can Walmart change the future of retail by solving the main problems of Walmart s two customer groups? Get out on the streets and asks Host events in Walmart stores across the country with smaller creators 1 consumers for their needs Reach out to creators to identify their Support Co-Creation and launching of products by providing network and knowledge pain points 2 Conduct market research to verify Co- Creating Value as a perfect strategy Let creators engage in the value chain of their product from production to delivery 3 Monday Morning Action January 2023 Co-Creating Value 27 M nster Consulting

Thank you for your attention! We will happily answer any questions that you might still have.