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2 This report examines insights for the fashion retailing industry in Australia. By compiling top searches from , we are able to better understand the consumer behavior during discovery and inspiration.

3 To identify a list of compelling insights, we analyzed the top volume queries related to the following categories: apparel, sport apparel and retailers. We then examined the monthly volume from January 2015 to December As a result from this approach, we curated the most impactful trends to develop a smarter understanding of customers.

4 Fashion searches grew 13% in Microsoft internal data, Australia, Jan Dec

5 accessories clothing Shoes 15% Lingerie 9% Clothing 47% +75% volume of generic searches Accessories 29% Microsoft internal data, Jan Dec. 2016, Australia.

6 Clothing Accessories Shoes* Lingerie* dress watch boots panties shirt jewellery heels bra top ring thongs underwear skirt hat sandals corset pant handbag sneakers stockings Microsoft internal data, Jan Dec. 2016, Australia. Note: Products ranked by volume of generic searches. * Note: Shoes and lingerie ranked first on each respective category.

7 TOP 5 PRODUCTS Dresses, shoes, watch, jewellery Clothing Accessories Shoes* Lingerie* dress watch boots panties shirt jewellery heels bra top ring thongs underwear skirt hat sandals corset pant handbag sneakers stockings Microsoft internal data, Jan Dec. 2016, Australia. Note: Products ranked by volume of generic searches. * Note: Shoes and lingerie ranked first on each respective category. and rings account for 44% of generic searches. DRESSES Dress related searches are greater than shoe searches by 2.4X.

8 Monthly search volume jewellery stores online shopping dresses online australia plus size clothing plus size lingerie plus size dresses activewear basketball shoes Sportwear Microsoft internal data, Jan Dec. 2016, Australia.

9 Monthly search volume jewellery stores online shopping dresses online australia Retail & online store related searches plus size clothing plus size lingerie plus size dresses Plus size related searches activewear basketball shoes Sportwear Sport apparel related searches Microsoft internal data, Jan Dec. 2016, Australia.

10 Monthly search volume wedding dresses bridesmaid dresses mother of the bride dresses review clothing review dresses smart watches brown cardigan maternity clothes gumboots Microsoft internal data, Jan Dec. 2016, Australia.

11 Monthly search volume wedding dresses bridesmaid dresses mother of the bride dresses review clothing review dresses smart watches brown cardigan maternity clothes gumboots These trends are expected to decline over the next year. Microsoft internal data, Jan Dec. 2016, Australia.

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14 Monthly search volume Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Microsoft internal data, Jan Dec. 2016, Australia.

15 Monthly search volume Occasions and colour dominate the research for Australians, when it comes to shopping for dresses. Non-brand related volume accounted for more than79%. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Microsoft internal data, Jan Dec. 2016, Australia.

16 Social occasions are the most popular 1. wedding dresses 5. party dresses 2. formal dresses 6. prom dresses 3. cocktail dresses 7. summer dresses words to narrow results for dresses, well above other filters like price, size, colour or fabric. 4. evening dresses 8. graduation dresses Microsoft internal data, Jan Dec. 2016, Australia. Note: Queries ranked by volume of searches.

17 wedding formal cocktail evening party prom summer graduation Social occasions are the most popular words to narrow results for dresses, well above other filters like price, size, colour or fabric. In , the volume of formal/evening dresses was up 2x compared to cocktail/party dresses. Microsoft internal data, Jan Dec. 2016, Australia. Note: Queries ranked by volume of searches.

18 Query Index Growth plus size dresses 100 7% plus size dresses australia 22 50% plus size wedding dresses 17 26% plus size evening dresses 16-1% plus size formal dresses 15 81% mother of the bride dresses plus size 15-40% plus size dress for special occasions 12 20% plus size cocktail dresses 12 40% plus size formal dresses australia 10 54% plus size maxi dress % Microsoft internal data, Jan Dec. 2016, Australia. Note: The index is on a comparative scale.

19 plus size models plus size fashion shows Year Revenue $ million Growth % % % % % more fashionable and appealing pieces % IBISWorld, IBISWorld Industry Report: Plus Size Clothing in Australia, January 2017.

20 Search volume 30% 20% 10% Female audience take the lead for dress-related searches across all age groups accounting for 80% of total volume. 0% Female Male Microsoft internal data, Jan Dec. 2016, Australia.

21 Search volume 30% 20% 10% Female audience take the lead for dress-related searches across all age groups accounting for 80% of total volume. 0% Microsoft internal data, Jan Dec. 2016, Australia. Female Male Women in the age group of are responsible for driving 22% of total volume.

22 0% 10% 20% Fashion Personal care Department stores Online spending remains dominated by people aged between 33-44, their share is the highest at 24%. Daily deals National Australia Bank (NAB), Online Retail Sales Index: In-Depth Report - December 2016, Feb In 2016, their share of online spend on fashion products was 15.2%.

23 Search volume 150% dress occasions, size and colour 100% 50% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Microsoft internal data, Jan Dec. 2016, Australia. Note: Index is the 12-month average volume

24 dresses is seasonal spikes August to November occasions plus size searches

25 female audiences aged 17-64

26

27 Monthly search volume Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Microsoft internal data, Jan Dec. 2016, Australia.

28 Monthly search volume Australians are more reliant on searches related to fitness brands and sport apparel stores to find the latest sportwear. Brand related volume Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Microsoft internal data, Jan Dec. 2016, Australia. accounted for more than 96%.

29 activewear and streetwear use 1. running shoes 4. football shoes 2. sneakers 5. golf shoes 3. basketball shoes 6. soccer boots Microsoft internal data, Jan Dec. 2016, Australia. Note: Queries ranked by volume of searches.

30 Thanks to product innovation from the 1. nike air max nike roshe 2. nike air max thea 5. adidas nmd 3. adidas yeezy 6. adidas superstars leading sport brands and collaborations with celebrities (e.g. Adidas Yeezy Boost designed by Kanye West), there is also a rise in sneaker models searches. Microsoft internal data, Jan Dec. 2016, Australia. Note: Queries ranked by volume of searches.

31 bra sportwear activewear sports gym wear Query Index Growth activewear % leotards % sports bra 58 44% sportwear 47 29% gym wear 29 25% fitwear 15-1% Microsoft internal data, Jan Dec. 2016, Australia. Note: Index is on a comparative scale.

32 Year Revenue $ million Growth , % , % , % , % reach $2.0 billion by in Australia , % , % integral part of customers lifestyles IBISWorld, IBISWorld Industry Report: Fitness and Athletic Clothing Stores in Australia, August 2016.

33 Search volume 30% 20% People in the age group of are responsible for driving 34% of total search volume. 10% 0% Female Male Microsoft internal data, Jan Dec. 2016, Australia.

34 Search volume 30% 20% People in the age group of are responsible for driving 34% of total search volume. 10% 0% Female Male Microsoft internal data, Jan Dec. 2016, Australia. National Australia Bank (NAB), Online Retail Sales Index: In-Depth Report - September 2016, Nov Although people aged make up approximately 17% of adult population, their share of online spend is the highest at 24%.

35 Search volume 150% sport brands 100% 50% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Microsoft internal data, Jan Dec. 2016, Australia. Note: Index is the 12-month average volume

36 strong year-on-year search growth activewear and streetwear use

37 searching for all things sneaker the volume share make up most of

38

39 GfK, Shopping Monitor, Oct Note: Australia, ages 18+, extremely important.

40 42% 33% 31% Easy to find all items special price offer wide selection of goods GfK, Shopping Monitor, Oct Note: Australia, ages 18+, extremely important.

41 Online stores Brick & mortar stores returns discount code deals coupon code promo code online shopping shop online sale catalogue online store Microsoft internal data, Jan Dec. 2016, Australia.

42 Online stores Brick & mortar stores returns discount code deals coupon code promo code online shopping shop online sale catalogue online store According to trending retailer searches, queries differ depending on the retailer type. Microsoft internal data, Jan Dec. 2016, Australia. Note; Queries ranked by volume of searches.

43 Online stores returns discount code deals coupon code promo code Brick & mortar stores online shopping shop online sale catalogue online store Microsoft internal data, Jan Dec. 2016, Australia. Note; Queries ranked by volume of searches. Keywords associated with special deals and flexible returns make up for online stores. Online presence and good deals are volume drivers for brick & mortar stores.

44 Search volume Online stores 100% volume 78% of total retail 75% 50% 25% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Online stores Brick & mortar stores Microsoft internal data, Jan Dec. 2016, Australia.

45 ebay 1.4X bigger Rebel Sports, 2% Other, 9% Catch of the Day, 2% Kmart, 2% Asos, 2% David Jones, 4% Target, 5% -3% drop in volume ebay, 54% The Iconic, 6% Amazon, 7% Microsoft internal data, Jan Dec. 2016, Australia. Big W, 7%

46 The Iconic Amazon Target Big W Searches related to Index Growth Big W % Amazon 95-3% The Iconic 84 24% Target 73-4% David Jones 61 12% Asos 31 2% Kmart 24 12% Catch of the day 22-1% Rebel Sports 21 8% Microsoft internal data, Jan Dec. 2016, Australia.

47 Online shopping, sale and discount related promotion of sales and offers is a great opportunity

48 2016 Microsoft Corporation. All rights reserved. Microsoft, Windows, and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted as a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. Microsoft MAKES NO WARRANTIES EXPRESS, IMPLIED, OR STATUTORY REGARDING THEI NFORMATION IN THIS PRESENTATION.

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