NATURAL STONE & TILE PLR RESETVENDOR FORUM

Reset Dates

Phase:1 June 4-8, 2012 (Reset#12467)

Phase 2: July 2-6, 2012 (Reset#12468)

Phase 3: August 6-10, 2012 (Reset#12470)

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Agenda– Reset timelines

– Forecasting & Replenishment

– Signage & display board requirements & approval process

– Flyer/advertising support

– Drop items exit strategy

– Store associate training

– Whatever/Whenever

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New releases/ Promo pod

New releases/ Promo pod

Designer mosaics

CURRENT

NEW

Reset timelinesPhase 1 (June 4-8)

Essentials

Marble threshold

Clearance Zone (June-August)

3FOR COMPLETE ITEM LISTING PER PHASE, PLEASE REFER TO ITEM LISTING PER PHASE PER VENDOR EXCEL DOCUMENT AVAILABLE ON LOWE’S LINK

New releases/ Promo pod

New releases/ Promo pod

Designer mosaics Essentials Natural Stone Porcelain /Ceramic tile

Porc /Ceramic tile

Clearance Zone (June-August)

Fash

ion

rug

CURRENT

NEW

Reset timelinesPhase 2 (July 2-6)

4FOR COMPLETE ITEM LISTING PER PHASE, PLEASE REFER TO ITEM LISTING PER PHASE PER VENDOR EXCEL DOCUMENT AVAILABLE ON LOWE’S LINK

New releases/ Promo pod

New releases/ Promo pod

Designer mosaics Essentials Natural Stone Porcelain /Ceramic tile

Porc /Ceramic tile Specialty tile

Clearance Zone (June-August)

CURRENT

NEW

Reset timelinesPhase 3 (August 6-10)

5FOR COMPLETE ITEM LISTING PER PHASE, PLEASE REFER TO ITEM LISTING PER PHASE PER VENDOR EXCEL DOCUMENT AVAILABLE ON LOWE’S LINK

Forecasting & Replenishment

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ForecastingDeseasonalized Demand (DD)Weekly rate of sale for an item at a store, based historical trends and statistical model. Updated weekly for every store/item

Base Index (BI)Weekly contribution of that week to the average week; grouped together they form a profile

Forecast = DD * BI + Override

3 Types of Forecasts•Demand – The quantity forecasted to be sold in the stores each week.•Order- Fcst purchase order quantities expected to be placed in the week specified. •Shipment- Fcst purchase order quantities we expect the vendor to ship in the week specified.

0

0.5

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1.5

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2.5

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3.5

4

4.5

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

0088382 CAN

0153916 US

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Weekly Vendor Forecast Sales forecast available to all vendors; order

forecast available for product flowing through RDC’s

Allows vendors to pull sales, purchase order and shipment forecasts on a weekly basis by RDC

Updated every week There is a 26 week and 52 week view of the

forecast that you can access on Lowes Link. Full Webcast Training that all vendors should go

thru.

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Replenishment Channel Flow and Inventory

Channel

Inventory

• 1XD = cross dock. This means that you will receive one PO per week with a ship too location of our Milton DC #1469. •  OXD = Stocked at DC. This means that you will receive one PO per week with a ship too location of our Milton DC #1469. We will hold a limited amount of stock in the DC to handle store demand. • With both the OXD or 1XD channels we would order in pallets but we may ship out to store in cases.

FTL vs LTLBased on the volume we will purchase from you weekly drives whether we should order as FTL or LTL. The initial forecast is what drives if we order as FTL or LTL. After 2 to 3 months we will review the business again using the actual’s to ensure the right decision was made.

We will not be holding more than 4 to 6 weeks of supply in our network. Due to the unknown sales potential of these new programs our expectation is that the vendor holds 12 weeks of forecast in their facility to react to demand.

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Vendor Compliance

On-Time Shipment: 95% Requirement on Total Orders, no more than 2 days early or late • 100% Requirement on New Store, New DC, Reset, Remerchandising, One-time and Promotional Orders

Quantity Fill Rate: • 98% Requirement on Total Monthly Orders • 100% Requirement on New Store, New DC, Reset, Remerchandising, One-time and Promotional Orders

Bar coding and Packaging Requirements: • 100% Accuracy Requirement

Core Carrier Compliance: • 100% Accuracy Requirement 10

Signage & Display boards

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102”Wing rackDesigner mosaics POG/ 3 bays

Before After

Display/Signage components:• Slider

•Product display board

• Product info card

• Storyboard (front panels only)

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Designer Mosaics Wing rack POG

Display/Signage requirementsWING RACK PRODUCT DISPLAY BOARD

•Dimensions:14.5”WX15 7/16”H / Live area: 12”Wx12”H • Source: Urban Stone•Qty: 1 per item (Mosaic or Mosaic/Subway combo)

Lowe’s price label

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DON’T FORGET TO FILL OUTTHE WING RACK PRODUCT SPEC SHEET (1 per item)

Designer Mosaics Wing rack POG

Display/Signage requirementsWING RACK PRODUCT CARD

Brand

Item description:Line 1: Product nameLine 2: sq.ft for item

Item in use shot

3 reasons to buy itemFeature #1 :MaterialFeature #2 :Where to useFeature #3 :Additional info/romance

Lowe’s item#

•Dimensions:14.5”WX15 7/16”H • Source: Pratt•Qty: 1 per item

Feature logo

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Z Wall POG’s/ 15 baysNatural Stone/ Porc Ceramic Tile

Specialty tile

Before

After

After

Display/Signage components:

• Z Wall product roomscene

•Z Wall Product display board

• C Channel card

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Z Wall POG’sDisplay/Signage requirements

Z WALL PRODUCT DISPLAY BOARD

•Source:Product display: Urban Stone / Roomscene: Pratt•Qty: 8 set per bay

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DON’T FORGET TO FILL OUT THE Z WALL PRODUCT DISPLAY BOARD SPEC SHEET/ INCLUDING MAPEI GROUT INFO (1 per z wall board)

Z Wall POG’sDisplay/Signage requirements

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•Dimensions: 12”W X5”H • Source: Pratt•Qty: 8 sets per bay (complementing each Z Wall board)

BrandItem descriptionProduct name and tile size

Item in use shot(same in use shotas Z Wall roomscene)

3 reasons to buy itemFeature #1 :MaterialFeature #2 :Where to useFeature #3 :Additional info/romance

QR code or feature logo

Lowe’s item#

Z WALL C CHANNEL CARD

Urban Stone ArtAtt: Angelo Rao7835 Hwy 50 Unit 10Vaughan, ONL4L 1A5arao@bellnet.ca416-768-1001

ContactsDisplay/Signage requirements

Wing rack & Z Wall product display boards

Layout review/approval:

jf.pelletier@lowes.com

416-730-7329

Technical requests:canadase@lowes.co

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Wing rack product cards/ C channel cardsZ Wall roomscenes

Wing rack & Z Wall spec sheets

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Flyer/Advertising support

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Advertising- FlyerCurrent and stylish in use image

image

Individual product imageSilhouette

-ideally other angles available

Sell copy which:- ‘romances’ the product- provides brief product

description- - provides consumer

benefits (‘why buys’)

Image requirements: minimum 150 dpiIMAGES & SELL COPY TO BE PROVIDED ON CD FORMAT

Romance the product: This floor and wall tile combinationemulates Roman themes beautifullyand is easily used in checkerboard patternswhile maintaining the elegance of the tile design

Brief product description:12X12 Navelli Ambrato Porcelain floor tilesold individually or in 9sq.ft carton

Consumer benefit (‘why buys’):Easy to cleanStain resistant<0.5% moisture absorption

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ContactsFlyer/Advertising

support

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Item in use image/roomscene

Individual product image (silouhette)

Item sell copy

CD Ship to addressLowe’s CanadaAtt: Darin Delvechio5160 Yonge Steet Suite 200Toronto, ONM2N 6L9

Questions:darin.c.delvechio@lowes.co

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Drop itemsExit strategy

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Drop itemsExit strategy

Item count

Inventory on hand @ cost $

Weeks of supply

188 $2,212,163

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Replenishment – Turn off All drop import vendor items+All domestic vendor items with WOS>30_________________________

•Total: 108 items (58% of drops)

All other drop items to be turned off 12 weeks prior to reset (by phase) Markdown• Now->up to 45 days prior to reset: EDLP•Less than 45 days to reset: Markdown optimization: 25%-75% off

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Drop items inventoryAs of 03/13/2012