We have some big targets in FY25

[Virtual Presenter] Let’s not shy away from this. As an online business we have some big sales targets that we need to achieve in FY25..

[Audio] We need to growth the Kmart & Target online business by 11%..

[Audio] And this is in a retail marketing that is not predicted to see a lot of organic growth.

[Audio] So how are we going to drive growth in FY25.

[Audio] Achieving these goals will rely on the success of many different strategic focuses from the FY25 online strategy..

[Audio] And a critical piece will involve aiding customer product exploration by driving online customer acquisition and retention.

[Audio] Delivering on the FY25 sales growth targets will require a significant step up in web and app traffic across both brands. Target growth may look relatively small here by comparison, but this has to be taken in the context of the fact that Target traffic has declined -10% in FY24. So turning that trend around into a positive is going to be a big challenge next year?.

Person holding credit card using laptop. Where does our traffic come from?.

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[Audio] In total, 70% of our online traffic and sales come from performance marketing channels – so these will be critically important in achieving our growth targets in FY25. But before we dive deeper in to that, let's take a step back and answer the question "what is performance marketing"? And why is it so important?.

[Audio] Performance marketing is really an umbrella term that encompasses a wide range of marketing channels. The key attributes that they have in common are: First and foremost that they are channels where the marketing investment is results driven and optimised towards an action like a purchase or a sale – this is unlike traditional advertising where the focus might be on building brand awareness or simply reaching a lot of customers with a message As such these are highly measurable channels with completely transparency and measurement around how many times they were seen, clicked on and whether they delivered the desired outcome such as a sale The large amount of data accumulated by such a highly measurable channel means that this data can then be used to see what's working and what's not. This data driven approach is then used to optimize the investment further to drive maximum returns. The data can also be used to deliver highly targeted campaigns to find the right customers for your business. Performance marketing channels are all highly cost effective where you generally only pay for the desired outcome. For example, if the customer clicks through to your website or app. However, this can be used flexibly to optimize your marketing dollars to different kinds of outcomes whether that be driving traffic, sales, leads or whatever your business goals. It can also be quickly and easily dilled up, down or off to react to changing business requirements. Lastly, performance marketing channels tend to be very scalable. Investment can be as small as you like. But they generally offer the ability to also access to large audiences of highly engaged customers as well..

[Audio] At Kmart and Target, Performance marketing represents 5 main channels today: Paid search - Paid ads within Google & Bing search results targeted to specific searches that are highly relevant to our business. Also includes ads on other Google properties (Shopping, display network, YouTube, Gmail, and Maps) Organic search - Free clicks within search results – primarily Google given their dominant market share in Australia & NZ. Email – this sits within the performance marketing team at Kmart only. All of the Kmail customer communications are built and set up in the marketing automation system by the performance team and drive engagement from our Kmart customer base. Affiliate marketing – is specific to the Target business and represents a wide range of different partner sites that we invest in to promote Target products and drive traffic to the website and app. This is a high return channel as we only pay for traffic if it ends up converting into a sale. Lastly, for Kmart only, we have paid social advertising – as a business Kmart invest heavily in advertising via social media platforms to reach a wide audience and drive increased awareness. The performance marketing strategy targets customers at the bottom of the purchase funnel with highly relevant products and optimises this investment to a sales outcome..

[Audio] And we have a very talented cross functional team of performance marketing specialists with extensive experience of delivering business success from the different areas of performance marketing. Leveraging these capabilities will be key to delivering success in FY25. If you ever need to speak to a specialist in any of these areas, reach out the right person on this chart and they will be more than happy to help you..

[Audio] So how are we going to win in performance marketing in FY25?.

[Audio] Firstly, we need to recognise that we have some significant challenges to overcome: We live in a time of increasing audience fragmentation which means that there are some many different channels and mediums where customers spend their time and attention. This includes an increasing number of different devices, a wider range of different websites, apps and social media platforms, online TV and streaming platforms. Getting cut through with customers is getting harder and harder. With increasing customer concerns and regulation around customer data and privacy, it's also getting harder to measure success and performance from our marketing investment and target customers online. The previous performance marketing standard using browser cookies are being phased out and new solutions require using hashed & encrypted first party customer data. Both the retail and performance market and becoming increasingly congested with major global pure plays such as Amazon and Temu investing more and more in performance marketing in our markets. This drives up cost and takes market share – making it harder to reach customers in a cost effective way..

[Audio] Achieving our Online business goals in FY25 relies on… Finding more of the right customers Engaging them with the right message at the right time And driving those customers to our web and app properties to provide them with an amazing shopping experience in order to convert those prospects into a sale. And we need to do this at scale..

[Audio] This will rely on 3 strategic pillars: Reach more customers Improve engagement And driving more profitable sales And here's how it will be executed across our 5 key channels….

Kmart & Target FY25 Paid Search & Social Key Initiatives.

Target FY25 Organic Search Key Initiatives. Reporting & Auditing Category PLP optimisations Link Opportunities Migration planning Full technical audit of the Target website & app Identify key areas of opportunity Develop roadmap, objectives, KPIs, and measurement of success. Fix duplicate pages Optimised copy Meta data optimisation Internal contextual links to pass SEO value through the website Digital PR content strategy to build backlinks from high-authority publisher websites Minimise impact of website platform migration Optimise SEO elements of the new platform.

Kmart FY25 Organic Search Key Initiatives. Technical On-Site Offsite Link Building Backend and code enhancement Improve crawlability Core Web Vitals, Nav Structure Canonicalization Schema mark up Internal linking ​ Content On-Site Product copy Content hub Content development to support key categories New publisher content partnerships Primary goal to increase search rankings for key category pages Bonus improved exposure and referral traffic New category content Inspirational evergreen content Generative AI.

Kmart FY25 Email Key Initiatives. Flybuys & NZ Braze Platform Migration Push & app messaging Journeys – incl. cross channel Customer segmentation & dynamic content testing ROBIS Expand reach by resuming contact with Flybuys customers And NZ Attribution beyond online sales outcomes Linking email interaction to in-store purchase through Flybuys data Realise the full value of email Optimise to omni-channel outcomes.

Target FY25 Affiliates Key Initiatives. Increased investment Partner diversification Product feed & meta data enhancements +100% YOY increase in investment Optimisation of investment to new & lapsed customers And building bigger baskets Improve cost efficiency by growing partner network Increased competition for Target marketing investment New opportunities to reach customers Dynamic commissioning by product type to drive improved profitability Optimise to customer type Opportunity to drive omni-channel sales.