Keynote presentation at the 2013 Retail Executive Summit. http://bradycap.com/retail-nirvana/ Day One Closing Keynote Retail Nirvana: The Keys to Capturing Customer, Employee, & Shareholder Value Speaker Gary A. Williams, Founder & CEO, wRatings Corporation * With additonal content provided by Barbara Gray, CFA, Equity Analyst, Brady Capital Research The level of differentiation from a product, experience, or service level in today's retail environment can make the difference between success and failure. While innovation is important, the most successful retailers also have to execute better and understand more effectively their social ecosystem. In this dynamic session hear from Gary Williams, with additional content provided by Barbara Gray, as he highlights the business, social, and technology requirements that today's retailers need to build value and succeed.

1. © 1999-2013 wRatings Corporation & Brady Capital Research. All rights reserved.
The wRatings research methods in this report are protected by US Patent 6,658,391 and other patents pending. All trademarks are the properties of their respective owners.
Gary A. Williams
The wRatings Corporation, Founder & CEO
Barbara Gray, CFA
Brady Capital Research, Equity Analyst
Retail Nirvana
The Keys to Capturing Customer, Employee &
Shareholder Value

2. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 2
Wikipedia Says . . .
“Nirvana” refers to the
stillness of mind after the fires of
desire, aversion and delusion
have been finally extinguished.
DESIRE
Customers
AVERSION
Employees
DELUSION
Shareholders

3. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 3
The Great Divide: Today’s Capitalism is Broken
Customers
The Real View
Shareholders
Employees
Wall Street’s View
Shareholders
Customers Employees

4. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 4
A New Way of Valuing Companies
Gary A. Williams
wRatings
Author &
Competitive Research
Barbara Gray
Brady Capital
Award-Winning
Equity Analyst & CFA
Jeffrey Cherry
Porter Group
Hedge Fund Manager
& Investment Banker
The Customer Value Index 200 (CVI 200) selects companies based on
competitive strength, social strength, and authentic core values.
www.cvi200.com

5. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 5
Lululemon Annual Report 2011 Video
Source: lululemon.com

6. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 6
Customer Value Index 200
6-Month Performance:
CVI up 25.5%, S&P500 up 21.8%
Source: Bloomberg, BradyCap Analysis

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Today’s Discussion . . .
1. A New Form of Capital . . .
Drives Whether Companies Fail or Succeed
The Power of Purpose . . .
Shifting from What to Why
2.
Social Strength ≠ Size or $ . . .
The Top Retailers in Social Strength
3.

8. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 8
1.
Find Your
Greater
Purpose

9. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 9
Shift from Material Want to Meaning Want
THE SEED
Purpose (Shell→Heart→Soul)
THE SOIL
Core Values & Culture:
Where SEED is cultivated and
guides daily behaviors
THE ROOTS
Community that sprouts from SEED
and grows in SOIL to form
stakeholder ecosystem with a cult-
like following
Chip Wilson in 1998
“To create components
for people to live a
longer, healthier, and
more fun life”
Source: Barbara Gray

10. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 10
The Silent Majority Become a Revolutionary Force
Social Media connects a company’s
customers, employees, & partners to empower them
Influence, expose, and
disseminate their views
Self-organize & join forces
on a common cause
Create new communities
to enable advocacy,
learning, collaboration
Source: Barbara Gray

11. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 11
It’s All About Controlling Risk
Economic Lose share of wallet Gain share of wallet
Pricing
No connection so
reduces pricing power
Deepening connection
increases pricing power
Supplier
Supply chain disruption
slows down/
stops productions
Opportunity for higher
integration & savings
DECREASING RISKINCREASING RISK
NEGATIVE
SOCIAL CAPITAL
RISK
FACTOR
POSITIVE
SOCIAL CAPITAL
Source: Barbara Gray

12. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 12
Retailers Can Increase their Growth Profile
How LULU uses Social Media to build
strong and trustworthy stakeholder relationships
Grow
Comparable Sales
$1,700
per
Sq Ft
$2,058
per
Sq Ft
Pre-Recession 2012
Expand
Geographic Footprints
Over 40% of LULU’s
2,650 Employees
On LinkedIn
Launch
New Concepts
Source: Barbara Gray

13. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 13
2.
We know what you sell;
Now we want to know
. . .
WHY?

14. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 14
20 Years Ago vs. Today
Source: KPCB, Mary Meeker / Liang Wu, D11 Conference 2013
1993
On the Internet, nobody knows you’re a dog.
2013
On the Internet, everybody knows you’re a dog.

15. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 15
The Shift from What to Why
Social Strength Is . . .
Consistency
Simplicity
Time-Sensitive
Stability
Trust
Precision
Useful
Coolness
Variety
Social Strength Is NOT . . .
Leadership
Fair-Pricing
Quality
Competence
Availability
Unique
Safe
Detached
At wRatings, we track
12 functional and 5 emotional attributes with customers.

16. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 16
Relationships form Communities
Social Strength is a company’s ability to
create authentic, engaging, long-term and
emotional relationships with customers
. . .
And management's consistent ability
to do so in an economically profitable manner.

17. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 17
Losing Their Way . . . And Tracing History to Rediscover It
Time
Sales
in $
“Why”
a Company Does It
“What”
a Company Does
Source: Adapted from Simon Sinek
The
Founder’s
Flounder

18. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 18
Apple 1990s PowerBook Commercial (no Steve Jobs)

19. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 19
Shell
Heart
Rediscover Your Identity
Layers of Stakeholder Relationships
Soul
•Shell
Utility value proposition (financial
and delivery elements) that its
product or service offers to
stakeholders.
• Heart
Emotional connection stakeholders
have with the company’s brand.
• Soul
Strong psychological attachment
that stakeholders have for the
company’s greater purpose.
Source: Barbara Gray

20. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 20
Starbucks Changes the World

21. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 21
3.
First Why,
Then Show Me
The Money!

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Top 20 Social Strength Retailers
RANK TICK NAME Industry
Social
Strength
W
Score™
Sales TTM
in $M
Net Income TTM
in $M
1 LULU lululemon athletica inc Retail‐Softlines 88.9% 95.5 $1,370.0 $271.0
2 CRI Carter's Inc. Retail‐Softlines 85.5% 88.2 $2,382.0 $161.0
3 COH Coach Inc. Retail‐Hardlines 81.6% 96.1 $4,929.0 $1,051.0
4 BBY Best Buy Co. Inc. Retail‐Hardlines 80.4% 55.7 $49,621.0 ($231.0)
5 BKE The Buckle Inc. Retail‐Softlines 79.7% 94.5 $1,124.0 $164.0
6 VRA Vera Bradley Inc. Retail‐Hardlines 79.4% 93.7 $541.0 $69.0
7 ZQK Quiksilver Inc. Retail‐Softlines 79.1% 76.3 $1,995.0 ($12.0)
8 URBN Urban Outfitters Inc. Retail‐Softlines 78.7% 91.7 $2,795.0 $237.0
9 NILE Blue Nile Inc Internet 78.5% 57.7 $400.0 $8.0
10 EBAY eBay Inc. Internet 78.3% 48.6 $14,072.0 $2,609.0
11 FOSL Fossil Inc Retail‐Hardlines 78.0% 90.8 $2,858.0 $330.0
12 SCSS Select Comfort Corp Retail‐Hardlines 78.0% 88.9 $935.0 $78.0
13 TIF Tiffany & Co. Retail‐Hardlines 78.0% 88.3 $3,794.0 $416.0
14 BBBY Bed Bath & Beyond Inc. Retail‐Hardlines 77.9% 82.4 $10,245.0 $1,015.0
15 GNC GNC Holdings Retail‐Hardlines 77.9% 88.2 $2,430.0 $240.0
16 JOSB Jos. A. Bank Clothiers Inc Retail‐Softlines 77.8% 79.8 $1,041.0 $95.0
17 GPS Gap Inc. Retail‐Softlines 77.8% 88.2 $15,651.0 $1,135.0
18 HIBB Hibbett Sports Inc Retail‐Hardlines 77.7% 80.5 $819.0 $73.0
19 AEO American Eagle Outfitters Inc. Retail‐Softlines 77.7% 87.5 $3,476.0 $279.0
20 ARO Aeropostale Inc. Retail‐Softlines 77.7% 86.6 $2,386.0 $55.0
Source: wRatings, as of March 29th, 2013

23. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 23
Building Social Strength: Luck or Skill?
Source: Michael Mauboussin, The Success Equation
Gary A. Williams analysis
Pure
Luck
Pure
Skill
“Greater
Purpose”
Social
Strength

24. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 24
Retail Nirvana is within your reach . . .
1. A New Model for Capitalism
Drive success by building social strength
Find Your Greater Purpose
Trace your history to rediscover the why
2.
If You’re a Dog, Everyone Knows It Already
Be authentic and transparent
3.

25. © 2013 wRatings & Brady Capital Research. All rights reserved. Page 25
Thank you . . .
Gary A. Williams
gawilliams@wratings.com
To obtain the Greater Purpose
white paper, go to:
www.bradycap.com/research
To obtain a copy of this presentation, send a note to: