PowerPoint Presentation

From Data to Delight: An Insight-Driven Revolution of the In-Store ExperienceROD SIDES, Retail, Wholesale and Distribution Leader, Deloitte LLP, ModeratorMIKE MAULER, EVP and President, GameStop International, GameStop CorporationCOLIN WATTS, Chief Executive Officer and Chief Health Enthusiast, The Vitamin Shoppe

Good morning everyone. Big hand to Mike Mauler? Stunning stuff from GameStop.My name is Colin Watts,Chief Health Enthusiast and CEO of the Vitamin ShoppeTalk about dual title later.3

Not familiar with Vitamin ShoppeOne of the first Health and Wellness retailersCelebrating our 40th anniversary Founded here in New York City Long history of leadership and growth4

Havent always talked about ourselves as a Health & Wellness retailerIll be honestnot in love with the term Health and Wellnessambiguous descriptor many forms over many generations So today Ill share our Vitamin Shoppe story which is one of a transforming consumer riding one of the biggest Mega-Trends of this generation reinvent a retail experience to match that intensity.5

In the past

Take a step back to look at the consumer trends60s, Wellness was truly a fringe phenomenon: peace, love, granola and yoga70s brought us the advent of the calorie counting craze and an obsession with self help gurusThen low-fat diets, spandex and the aerobics wave90s had us cutting carbs, checking nutrition labels, and cardio kickboxing6

Not surprising that people historically equated Health & Wellness tofad diets trendy exercise regimens and anIndustry overly focused on pills and powders7

Fast forward to today Wellness is no longer a fringe or fad notionFor this generation a total lifestyle choice Food, ideas and exercise that were once on the fringe are now mainstream Represent billions of dollars of consumer spending that continues to grow every year8

striving for the Good Life.9

QUESTION

A

Think about yourself 10

How many of you got 8 hours of sleep last night? How many of you think you had a healthy, balanced meal in the past day? How many of you feel stressed out, overworked, overwhelmed?

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Now how many of you are doing something about it? Wearing a fitness tracker? Anyone switch to a standing desk at work? Making the choice to add more protein to their diets? Paleo diets? Gluten free?More than ever, people are looking at wellness as a lifestyle choice,Not a fad, but a way to live your best life as your best self.12

This is both amazing and unsettling newsOn the one hand, there has never been a better time to be in Health and Wellness 13

DRUGSTOREBIG BOXONLINE

On the other hand, we have never seen more fierce competition: Everyone from drugstores to mass merchants to online Have been dabbling in selling nutritional supplements14

We had begun to see signs that parts of our core offering was becoming commoditized. 15

Our challenge wasnt just reinvigorating our retail experience, we needed to reinvent our business model

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About 2 years ago, working with our partner, Jackman Reinvents, We embarked on our journey to transform the Vitamin Shoppe17

and the first step was to stop looking at our business strictly from a transactional perspective

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and begin to deepen our holistic understanding of our customers Focusing on uncovering the role we could play to help them reach their lifestyle goals19

MALE27 YEARS OLDCOLLEGE GRAD$527 SPENDING

For instance, a typical retailer might look at simple customer demographics and transaction datathat would report a customer like this20

DAD

TENNISPLAYER

SAILORWho am I?

where at the Vitamin Shoppe We are engaging our customers with profile data like mine here

With a goal of unlocking their total life ambitions and needs21

&ANDREWDONNA

Once we better understood our core customersWe found that 70% of our sales come from two types of people Donna and Andrew22

GOAL SETTERS

Women and men like Donna are motivated lifelong goal setters.They are looking for ways to continuously improve: Eat better, sleep better, build muscle tone and strength for everyday life

Andrew represents men and women that are in-the-know health & fitness advocatesThey are tricky customer to serve because they stay so well informed and ahead of the curve when it comes to innovation.But they are always looking to try something new and appreciate external validation of their knowledge

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Changing our lens from customer transactions to human relationships We realized that we needed to join Donna and Andrew on their journeys To meet our customers needs, our proposition needed to change from selling pills and powdersTo becoming a trusted partner on our customers wellness journeys A partner who would not only provide inspiration but solutions

In focus groups, the lack of a trusted source for advice would come up again and again

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FAMILY

People were turning to all kinds of sources like family, friends, media and online looking for answers25

FRIENDS

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MAGAZINES

INTERNET

For complex and highly personalized health & lifestyle choices

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What people were looking for was someone to engage with in their everyday life

And here is where our competitive advantage as a retailer became apparent

our Vitamin Shoppe Health Enthusiasts.

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CLICK ONCE AND SLIDE WILL BUILD AUTOMATICALLYWe learned that our best Vitamin Shoppe Health Enthusiasts already filled that role - but there was an opportunity to do this more systematically and consistently at all our customer touchpoints

You see, the Health Enthusiast is a special breed by design We actively recruit and then train and develop men and women who take great joy out of living healthy lifestyles and imparting expertise and knowledge to their customers. If youve ever worked with a great fitness trainer, think of our Vitamin Shoppe Health Enthusiasts as great wellness trainersThey inspire you to be your best self every day Earlier I mentioned my dual title? Everybody at The Vitamin Shoppe is a Health Enthusiast.let me share a quick video that really captures our culture and our ethos30

HUMANIZEDIGITAL

So today, here at The Big Show, we wanted to take the opportunity to unveil some of our most recent steps in our transformationSteps we have taken to transform both our digital and retail experience

CLICK SLIDE MOVIE WILL PLAY AUTOMATICALLY

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A few months ago, we started to rollout a dramatic retail store transformation that moves our retail experience from overwhelming shelves of pills and powders into a true healthy lifestyle destinationA place where people could come to learn and be inspired We remerchandised and redesigned the store experience from top to bottom to support Donna & Andrew on their journey32

We started with a dramatic upgrade of the exterior33

To create a beacon for customers driving by our new store

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We gutted the old store to create three distinct zones:The entrance and foyer was designed to Embrace our Customers; An innovation zone that is our Engagement area; And a comprehensive product solution area that is our Empower Zone.35

There are also tons of surprises and delights: A Kombucha-On-Tap Bar where we convene Kombucha happy hours for our customers 36

The most comprehensive Healthy Beauty section weve seen in the country 37

An industry first sports protein sampling and tasting station38

A Solutions Wall, where we highlight the most important Wellness interests of our customers and provide them with a variety of solutions to address their challenges.39

Weve even installed a comprehensive Aroma therapy bar40

And the first of its kind Fit freezer case41

and finally, our gathering place in the heart of the store

our Health Enthusiast Solutions Bar 42

where our SPARK workshops and 1/1 nutrition sessions come to life...43

We spend time with individual customers, providing nutritionist-led 1x1 consultationsAnd multiple evenings a week44

We also conduct our signature Spark Workshop sessions to teach and inspire our customers on a variety of wellness topics45

WERE ALL YOU NEED ON YOUR JOURNEYTO YOUR BEST SELF.

Wed like to think that with our new transformationWere all you need on your journey to your best self46

Altogether, you can see that Vitamin Shoppe is transforming from;a purveyor of pills and powdersto a Trusted Authority for those engaged in a healthy lifestyle.

In summary, our transformation was borne out of -

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DEEPLY UNDERSTANDING OUR MARKET

Deeply understanding our market48

ALIGNINGOUR BEHAVIORTO OUR CUSTOMERS

Aligning our behavior to our customers49

UNCOVERING AND AMPLIFYING OUR COMPETITIVE ADVANTAGE

Uncovering and amplifying our competitive advantage50

BUILDINGLONG-TERM RELATIONSHIPSTHAT BENEFIT PEOPLE

Building long-term relationships that benefit people51

So I hope you now can understand how at the Vitamin Shoppe, the term Health & Wellness falls a bit short.Weve transformed that too.52

THRIVE.

Our research supported that what todays consumer means by health & wellness shifts from the passive to active engagementThey want to engage with retailers who are prepared to make that leapOur new mission is a focus on Nourishing bodies and inspiring minds to help people thrive every day. In turn, they have helped our business thrive too.

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3xFIRST TIME CUSTOMERS

3 times the number of first time customers54

2xLONGER IN STORECustomers Spending Almost

Spending 2 times longer in store55

91WOULD RECOMMEND TO FRIENDS/FAMILY%

91% likelihood to recommend us to a friend56

Thank you for your time and your attention this morning, andI hope each of you continue to thrive every day.57