Romanian Distribution Committe Magazine Volume 6 Issue 4

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Romanian Distribution Committee Magazine

Volume: 6 Issue: 4 Year: 2015 Scientific Review of the Romanian Distribution Committee


Romanian Distribution Committee Magazine / December 2015 /

Ion Ababii, Chişinău

Aurel Iancu, Bucharest

Constantin Roşca, Craiova

Nicolae Albu, Brasov

Mitsuhiko Iyoda, Osaka

Analisa Romani,Turin

Ruxandra Andreea Albu, Bucharest

Mohamed Latib, Gwynedd

James Rowell, Buckingham

Levent Altinay, Oxford UK

Dong II Lee, Seoul

John Saee, Virginia Beach VA

Kathleen Andrews, Colorado Springs

Min-Sang Lee, Gyeonggi-Do

Cătălin Sfrija, Bucharest

Virgil Balaure, Bucharest

Claude Magnan, Paris

Adrian Socol, Strasbourg

Dan Barbilian, Bucharest

Radu Titus Marinescu, Bucharest

Eliot Sorel, Washington D.C.

Riccardo Beltramo, Turin

James K. McCollum, Huntsville

Mihaela-Luminița Staicu, Bucharest

Richard Beresford, Oxford Uk

Nicolae Mihăiescu, Bucharest

Radu Patru Stanciu, Bucharest

Dumitru Borţun, Bucharest

Dumitru Miron, Bucharest

John L. Stanton, Jr., Philadelphia

Leonardo Borsacchi, Turin

Dan Mischianu, Bucharest

Peter Starchon, Bratislava

Mihail Cernavca, Chişinău

John Murray, Dublin

Felicia Stăncioiu, Bucharest

Ioana Chiţu, Brasov

Alexandru Nedelea, Suceava

Marcin Waldemar Staniewski, Warsaw

Doiniţa Ciocîrlan, Bucharest

Hélène Nikolopoulou, Lille

Vasile Stănescu, Bucharest

Tudorel Ciurea, Craiova

Olguța Anca Orzan, Bucharest

Filimon Stremţan, Alba-Iulia

Alexandru Vlad Ciurea, Bucharest

Gheorghe Orzan, Bucharest

David Stucki, Fribourg

Maria Negreponti-Delivanis, Thessaloniki

Elena Mihaela Pahonțu, Bucharest

Ion Voicu Sucala, Cluj-Napoca

Jean-Sébastien Desjonqueres, Colmar

Rodica Pamfilie, Bucharest

Kamil Pícha, Ceske Budejovice

Aurel Dobre, Călăraşi

Iulian Patriche, Bucharest

Laurenţiu Tăchiciu, Bucharest

Luigi Dumitrescu, Sibiu

Carmen Păunescu, Bucharest

Emil Toescu, Birmingham

Mariana Drăguşin, Bucharest

Mircea Penescu, Bucharest

Simona Ungureanu, Bucharest

Ovidiu Folcuţ, Bucharest

William Perttula, San Francisco

Vlad Budu, Bucharest

Luigi Frati, Roma, Italy

Virgil Popa, Targoviste

Eva Waginger, Wien

Petru FILIP, Bucharest

Marius D. Pop, Cluj-Napoca

Léon F. Wegnez, Brussels

Victor Greu, Bucharest

Ana-Maria Preda, Bucharest

Răzvan Zaharia, Bucharest

Bernd Hallier, Köln

Monica Purcărea, Bucharest

Gheorghe Zaman, Bucharest

Sang-Lin Han, Seoul

Cristinel Radu, Călăraşi

Dana Zadrazilova, Prague

Florinel Radu, Fribourg

Sinisa Zaric, Belgrade

Gabriela Radulian, Bucharest

Hans Zwaga, Tornio




Romanian Distribution Committee Magazine / December 2015 /

Andreea Apetrei, Iasi Adalbert Lucian Banyai, Bucharest George Bobîrnac, Bucharest Roxana Codita, München Stefano Duglio, Turin Larisa-Diana Dorobat, Geneve Marinela-Filofteia Hostiuc, Bucharest Darius Ilincaş, London

Adrian Lală, Bucharest Irina Purcărea, Bucharest Ivona Stoica, Bucharest Dan Smedescu, Bucharest Constantin C. Stanciu, New York Radu Pătru Stanciu, Bucharest George Cosmin Tănase, Bucharest Oana Patricia Zaharia, Bucharest

Alexandru Ionescu, Romanian-American University Adriana Bîrcă, “George Bariţiu” University Brasov Nelu Florea, “Alexandru Ioan Cuza” University Iasi Ana Ispas, Transilvania University Brasov Irena Jindrichowska, University of Economics and Management in Prague Costel Iliuţă Negricea, Romanian-American University Adina Negruşa, “Babes-Boyay” University Cluj-Napoca Anca Purcărea, Academy of Economic Studies in Bucharest Monica Paula Raţiu, Romanian-American University Gabriela L. Sabau, Memorial University, Sir Wilfred Grenfell College Andreea Săseanu, Academy of Economic Studies in Bucharest

Vlad Barbu, Bucharest Gabriel Brătucu, Brasov Ion Bulborea, Bucharest Mircea Buruian, Targu Mures Iacob Cătoiu, Bucharest Jean Constantinescu, Bucharest Beniamin Cotigaru, Bucharest Radu Diaconescu, Iasi Valeriu Dulgheru, Chişinău Constantin Floricel, Bucharest Valeriu Ioan-Franc, Bucharest

Gheorghe Ionescu, Timisoara Christophe Magnan, Montréal Pompiliu Manea, Cluj Andrei Moldovan, Bucharest Dafin Fior Muresan, Cluj Neculae Năbârjoiu, Bucharest Constantin Oprean, Sibiu Dumitru Patriche, Bucharest Florian Popa, Bucharest Dumitru Tudorache, Bucharest Ion Smedescu, Bucharest Victor Părăuşanu, Bucharest

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Romanian Distribution Committee Magazine Volume: 6 Issue: 4 Year: 2015

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Romanian Distribution Committee Magazine / December 2015 /


Editorial: The Magic of Growth, the New Business Models Offered by the “Crowdsourcing Economy” and Building Trusted Innovation Theodor Valentin PURCĂREA page 10

Omni-Channel Retailing: The Changing Battleground James ROWELL

page 18

Facing IoT - The New Giant Wave of the Information and Communications Technologies Development

Victor GREU page 26

Marketing the Business Online with Youtube: The Future is Now George Cosmin TĂNASE page 30

Challenges of the Modern Retail Trade Theodor PURCĂREA page 38

(by courtesy of) - “A Shopper Marketing that Captivates and Move Shopper to Loyal Customer”, and published in the prestigious “Distribution d’aujourd’hui”, 56ème année, Juillet - Août 2015, Brussels

Léon F. WEGNEZ page 42

Vasile STĂNESCU: Our world has entered a new temporality

Theodor PURCĂREA page 46

(by courtesy of) - “Asia Fast Forward” and “Asia Pacific Awards”, Postharvest Research, Climate Summit Paris, and ERA “Hall of Fame” 2016 Bernd HALLIER page 50

A short presentation of our partner journal „Contemporary Economics”, Vol. 9, Issue 1, 2015, Quarterly of University of Finance and Management in Warsaw Irina PURCĂREA


We all know that it is not easy to sustain growth as a means to creating value, which matters more than ever in a challenging environment, and that is why it must be actively and continually renewed, being known that it’s not always clear how to achieve it. (Atsmon and Smit, 2015) McKinsey’s representatives recommend companies to predict their growth momentum by identifying the unique factors that drive their sales and how these factors connect to broader economic developments, and if this is the case to focus on up-and-comers, letting go of businesses that were once important, while taking into account that outperforming the competition takes discipline and a relentlessly granular analysis, on one hand, and on the other hand, especially, a commitment to seek the kind of growth that generates real and sustainable value. Doing business in ride or in room sharing, in shop and office sharing, (Marchi and Parekh, 2015) the sharing economy players (operating as taxi firms, hotels, restaurants, and utilities) are under pressure of educating stakeholders about the benefits of this kind of economy, proving their role in offering innovative solutions while ensuring consumer protection, establishing the facts around the sharing of the economy’s societal benefits, identifying common ground and building alliances, and shaping regulatory frameworks (not just litigating). It is worth remembering that at the level of the European Union (EU), on 25 September 2013, on the occasion of a public hearing in the European Economic and Social Committee (EESC, one of the advisory bodies of the European Commission) the European Sharing Economy Coalition (EURO-SHE) was launched (following an invitation from the European Commission), its declared aim being to create public/private partnerships along the whole value chain of the Sharing Economy and improve dialogue among the EU Sharing Economy Companies, EU Business Associations, and EU Policy Makers. (, 2015)


Romanian Distribution Committee Magazine / December 2015 /

Exactly two years later, on 24 September 2015, the European Commission launched its public consultation into the “Regulatory environment for platforms, online intermediaries, data and cloud computing and the collaborative economy”, collaborative economy platforms being included, such as Airbnb, Uber, TaskRabbit and BlaBlaCar, while sharing economy also receiving a dedicated section in the consultation. From the point of view of the competition policy, (Kirrage and Davidson-Kelly, 2015) there is also a link with the sharing economy in what concerns both the so-called “vertical restrictions” between suppliers and platforms or distributors (especially investigations into resale price maintenance), and the possibility of the sharing economy intermediation markets (Lougher and Kalmanowicz, 2015) to become concentrated and dominated by a single market player (the sharing economy platforms, for which data use is key, being two-sided businesses active in intermediation). Also, in September 2015, we find out from a Briefing of the European Parliament that within the EU context of a fragmented response to the sharing economy (also called shared, collaborative, peer or access economy), the European Commission is planning to assess the role of platforms in order to see if a new regulatory framework is needed. (European Parliament) This Briefing also reminded, among others, that the sharing economy was described (Botsman and Rogers, 2010) as an economic model driven by network technologies that enables things and skills to be shared or exchanged in ways and on a scale not possible before. On October 28, 2015, Reuters (Guarascio) let us know that as the European Commission launched plans to revamp the EU single market: << Europe should not shut itself off to “new business models” offered by the sharing economy and companies such as Uber;” The EU Commissioner for the single market, Elzbieta Bienkowska, called for “one European approach” to companies such as Uber; The Commission also plans to end diverging prices for consumers based on their country of residence, a further opening up of the retail sector etc. Allow us just to remember what we underlined this year in the first issue of our Journal, (Purcarea, 2015) namely, that we are entering the third generation of marketplaces, companies like Uber delivering a more end-to-end user experience, while as the digitization of our lifestyles is becoming the norm, “the retail issue” remains a key strategic challenge, digital disruption becoming a constant for retailer marketers, and personalization, convenience and mobile experiences representing true pillars of the modern commerce. But let us go << Beyond the Rhetoric of the “Sharing Economy” >>, thanks to Edward T. Walker (vice chair of the department of sociology at the University of California, Los Angeles, and the author of “Grassroots for Hire: Public Affairs Consultants in American Democracy”, Cambridge University Press, May 26, 2014). Walker pledges to a better understanding of the “sharing economy” as the “crowdsourcing economy,” by recognizing the sector’s technology and approach without misleading by moralization, by stopping assuming that this sector plays by an entirely different set of rules. On the other hand, two researchers from the Department of Sociology at Stanford University, Paolo Parigi (interested in social networks, trust, and cooperation) and Karen Cook (studies social exchange, social networks, and trust) concluded that: “Internet-mediated interactions tend to become less open-ended and unexpected the more information the community accumulates about its members”. (Walker, Parigi and Cook, 2015) And coming back to the old good habits, as we are now at the end of 2015, let us finally take the usual look at the (this time) 15th annual Edelman Trust Barometer (33,000 people in 27 countries around the world were surveyed on their trust in the institutions of government, media, business and NGOs), highlighting that this year offered key insights into the factors that increase and decrease trust (that institutions must understand and properly build, and is also an important factor in driving market acceptance of new business innovations), and defined a new formula for building trusted innovation (Trusted Innovation = [Discovery + Benefit + Integrity]Engagement). The authors (2015 Edelman TRUST BAROMETER) consider that building trust (trust in specific innovations vary) is essential to successfully bringing new products and services to market, and building trust in new business innovations (the pace of change is considered too fast – 51% of respondents) requires that companies demonstrate clear personal and societal benefits (81% agree), behave with integrity and engage with customers and stakeholders throughout the process. Let us prepare to face the challenges of the New Year 2016 holding that conviction of behaving accordingly, with integrity and engaging with customers and stakeholders throughout the above mentioned process.

References Yuval Atsmon and Sven Smit - Why it’s still a world of ‘grow or go’, McKinsey Quarterly, October 2015, retrieved from:, 10/31/2015

Alberto Marchi and Ellora-Julie Parekh - How the sharing economy can make its case, December 2015, retrieved from:, 12/21/2015 European Sharing Economy Coalition, retrieved from:, 12/21/2015 Katherine Kirrage, John Davidson-Kelly - The sharing economy and competition law: how does the European Commission’s growing focus on the digital economy affect sharing platforms? 5 November 2015, retrieved from: connected-insights/blog/sharing-economy-and-competition-law-how-does-european-commissions-growing-focus-digital-economy-affect-sharing-platforms/#sthash.KIpTvV1y.dpuf, 12/21/2015 Guy Lougher and Sammy Kalmanowicz - EU Competition Law in the Sharing Economy, retrieved from:, 12/21/2015 European Parliament - The sharing economy and tourism - European Parliament, Briefing, September 2015, retrieved from:, 12/21/2015 Rachel Botsman and Roo Rogers, ‘What’s Mine Is Yours: The Rise of Collaborative Consumption’, 2010. Francesco Guarascio - UPDATE 1-Europe should embrace sharing economy – Commission, Wed Oct 28, 2015, retrieved from:, 121/21/2015 Theodor Purcarea, 2015. “Uberization, fleeting innovation, and the reality of the pleasure purchase,” Romanian Distribution Committee Magazine, Romanian Distribution Committee, vol. 6(1), pages 06-08, 03. Juliet B. Schor, Edward T. Walker, Caroline W. Lee, and Paolo Parigi and Karen Cook - On the Sharing Economy, retrieved from:, 11//20/2015 2015 Edelman TRUST BAROMETER - Trust and Innovation, , , retrieved from:,12/22/2015


Retailing: the changing battleground James Rowell, Lecturer Operations and Supply Chain Management, Business School, University of Buckingham Š James Rowell 2015

Abstract The world of shopping is continuing to change, and the parameters for success or maintaining an advantage are also changing. There are recent and important changes in this business ecology. With new market entrants, changes in consumer behaviour, the introduction of consumer technology, Omnichannel has become even more competitive. Retailers are reviewing from marketing and operations perspective the range(s) of products made available through different channels and/or locations. Speed has become a crucial competitive factor. There is a real need to develop the operating model(s) which are attractive to their market segments and customer base, and retain their loyalty.


Omni-Channel Retailing, Pressure for Change, Customer Benefits and Loyalty

JEL Classification: L81, L86, M31


Romanian Distribution Committee Magazine / December 2015 /

Introduction The use of the internet for shopping has almost become ubiquitous, from books to holidays, entertainment to insurance, and none more so as in areas such as groceries, clothing and household goods. In recent years the different channels for internet shopping have become more diverse, leading to the phrase ‘Omni-channel’ being coined, and emanating from the UK-based John Lewis Partnership (JLP), as reported by Rowell (2013). In that 2013 article I concluded by stating “Clearly, managing these multi-channels is not easy… ... it is imperative for 21st century retailers to create customer benefits and loyalty in an increasingly dynamic and competitive market”. At that time the JLP department store had already recognised the positive impact on customer behaviour, and sales through this multi-pronged access of customer to products. Andy Layton, Director of Multichannel Operations at the John Lewis Partnership (Rowell, 2013) quotes, “Statistics collected by the company show how shoppers’ behaviour has been changing: 29% (of customers) research in-store then shop in-store; 63% research in-store then order online. But what JLP has noticed is that shoppers buying on-line also return to the store to shop, meaning that the process of on-line shopping is driving additional purchasing in the store itself.” However, the world of shopping is continuing to change, and the parameters for success, or maintaining an advantage are also changing. This article discusses some of the most recent and important changes in this business ecology. Omni-Channel Retailing In simple terms ‘Omni-channel’ retailing means we (customers) can order goods however, wherever, and whenever we want, and furthermore have those goods delivered however, wherever, and whenever we want; to meet our needs at the time (See Appendix 1 for details of fulfilment models). Companies have been providing an internet shopping experience, made famous by Amazon’s books, since the early 1990s. Major grocery stores on the other hand followed this channel from the early 2000s; very tentatively at first. They tended to use one of two methods to support the fulfilment processes; Model 1- pick from a centralised warehouse, or Model 2 – pick from a convenient existing store. (See Appendix 1). At about the same time, in 2002, Ocado, an independent fulfilment service provider, focussed on their own operation, to support internet shopping of the grocery chain Waitrose. Their model was to pick, pack and deliver to customers’ homes from their centralised, and very sophisticated fulfilment centre. These developments were successful for some (e.g. Ocado), but not for others (e.g. Webvan in the US, Rowell (2013)). Alternatively some grocery retailers such as Leclerc, and Auchan in France, took a third route which was to build new ‘solo’ stores (Colla and Lapoule, 2012). These ‘solo’ stores are really only a warehouse where goods are picked by the retailer; and the customer drives to it in their car to collect their goods – referred to as “Click and Collect” in the UK, or in France, ‘Click and Drive’. The additional benefit to the retailer is the ability to expand their geographic footprint with a far lower level of investment needed; whilst at the same time providing an ‘up-to-date’ service. In the UK grocery retailers such as ASDA (owned by Walmart), Tesco, Sainsbury’s, have added this ‘click and collect’ operation alongside the regular store. To outline a schematic model for grocery shopping on the internet – a shopper logs on to the retailers website, tags the products required, pays by credit/debit card, and selects a delivery ‘slot’. The delivery slot can be made in the future, or at best the next day. The order contents may be changed (for some retailers) up to midnight the day before delivery. Depending on the actual

retailer the delivery slot is set as a 1-hour (e.g. Ocado) or 2-hour window (e.g. Tesco). In addition some delivery times are more popular than others and customers can select a convenient one for them; this will vary the delivery charge (£2 or £4-5; between 2.5 – 6 euros). Pressure for Change As we move into the middle 2010s how convenient it would be for retailers if the simple service of picking, packing, and delivering goods would be attractive, and satisfy their customers. However, with new market entrants, changes in consumer behaviour, the introduction of consumer technology, Omni-channel has become even more competitive. Firstly, it is worth noting that in the UK over 70% of grocery shopping is controlled by the 4 major companies, ASDA, Morrison’s, Sainsbury’s and Tesco. This has been the situation for over a decade, and whilst there are other renowned grocers, e.g. Waitrose, Marks and Spencer, plus a number of ‘discounters’ such as Aldi and Lidl, the ‘majors’ have been in a fairly stable position in the market. To explain the changes in consumer behaviour, and particularly in the grocery sector, what we find is that more and more customers are doing a “large shop” of everyday, heavy, goods via the internet each two-weeks or monthly ( This cuts out the need to spend lots of time in the supermarket, and removes the chore of lifting lots of ‘heavy’ goods. Subsequently they then “top-up” with more frequent small shopping expeditions for ‘fresh’ goods (e.g. fruit/vegetables, milk) on a daily/two daily basis at a local/convenience store. This has the effect of changing the shopping experience at the store, and what customers might expect to see there, and the range of products available on the shelves. At the outset of internet shopping users accessed the internet from a PC at home, at the office, and mostly from a desktop PC; later via a laptop computer. More recently user devices have become more mobile with the introduction of tablets, and smart-phones. In particular the takeup of smart-phones has changed the way in which mobile ’phones’ are used, and have almost ubiquitously become mobile computers. This enables customers to access the internet, make product/price comparisons, and order goods, independent of the user’s physical location. For the retailers this has meant that they need to provide service to its customer by developing a phone ‘app’ suited to the screen size format of a smart-phone. In a different way, Tesco, branded as ‘Homeplus’ in South Korea, offers its customers the facility to shop online at a ‘virtual store’ on the subway station platform whilst waiting for their train. (http:// Areas of the station carry images with product QR codes which can be read by the shopper’s smart-phone. In ‘ideal’ circumstances the delivery of groceries is “right after you get home”. Before being sold by Tesco ( shares-search-results/t/tesco-plc-ordinary-5p/share-news),Tesco Homeplus had become the Number 1 online grocery store in South Korea. From the organisations’ perspective, there is recognition of these trends and a host of other competitive factors from close and distant competitor organisations. These include: •

New entrants


Delivery speed

Loyalty mechanisms

Product range

New entrants Whilst not exactly new to the UK, the two German retailer discount stores, Aldi and Lidl, are finding their proposition more attractive to the general public in the UK. An interesting change that 12

Romanian Distribution Committee Magazine / December 2015 /

Aldi, well known for its “flash sales”, made at Christmas 2014 was the proposition to offer caviar and champagne at low prices; not the usual products for a ‘discounter’. This set it on the road for an Aldi shopping bag becoming “acceptable” to carry, amongst the middle classes, thereby extending its target market. As reported by The Telegraph, almost 1 in 3 people now shop at Aldi or Lidl quoting - “and that’s why you now see plenty of Audis, BMWs and Mercedes parked outside Aldi and Lidl - it’s now seen as a badge of honour.” http://www.telegraph. In 2015 Aldi and Lidl set out its plans to enter into the field of internet groceries. Aldi (in the UK) is to use the same distributor as Fortnum and Mason (a very high class retailer) for its wine deliveries. Lidl in its German market is planning to offer a limited range of products that can be collected by the customer from a lockable storage box (‘Vorratsbox” in German), (http:// this follows a similar launch by competitor Amazon, in Germany, under the branding of Prime Pantry. In the UK Amazon has launched its internet home delivery offering (Amazon Fresh), but limited to only two major cities, London and Birmingham ( aspx?id=117&tid=11&trid=4&nid=13938). To make this choice customers need to be Amazon Prime members (£79 (105 euros) p.a. subscription) and pay a delivery charge of £6.99 (9 euros) to have goods delivered within one hour. In the US, Amazon has been running its internet Amazon Fresh since 2006, and has been developing its capability and market presence; but Amazon is not the only non-grocery company entering the market there. In response, in October 2015, Google announced its Google Express offering for fresh food products, and that will be competing with Amazon for grocery distribution in the major US cities by 2016.

Accessibility The first company to explore here is Doddle, it has invested in a new infrastructure by creating independent collection locations, e.g. at Rail stations, and Metro stations; developing some 300 outlets in 2014-15. Goods, mostly clothing (initially) can be delivered to these locations from any retailer/supplier (who have an agreement with Doddle). The customers can collect, try on the new clothes, and even return them, at the same outlet. Being based at a rail station, the convenience for many customers is that it is on their regular commuting route (Dorfmann, 2014). People shopping at John Lewis can now shop in-store, shop online, and then either collect at the store, have goods delivered direct to home, or collect from one of the many outlets (including JLP, Waitrose). This extends its geographic footprint from the 45 JLP stores (http://www. to add the 300 Waitrose stores (http://www. to its collection locations, making it even more convenient for the shopper. Sainsbury’s supermarket has also attempted to increase the convenience for its customers. The company has a market share of around 16% (Kantor Worldpanel, reported news/business-29442383), so a close second to ASDA in the UK. They had installed grocery collection points at London Underground (Tube) stations, but found the take-up in terms of usage could not support an on-going development of that particular method. Rather than people collecting their groceries as they exit the station, the lockers were mostly being used by people to drive to. Sainsbury’s thinking that the additional cost outweighed the benefits, have dropped their plans for this expansion, to focus on ‘Click and Collect’ sites at existing stores. Whilst Tesco is, by far the largest, grocery retailer in the UK market with 30% market share (Kantor Worldpanel, reported ( its fortunes have recently been dented by poor financial results, and the uncovering of misreporting in the annual

report. Some element of retrenching and restructuring the company has been taking place. Some overseas assets have been sold (e.g. Homeplus in South Korea; ( shares-search-results/t/tesco-plc-ordinary-5p/share-news) and significant retrenchment in the UK market. The changes in shopping habits is making their large store format look old-fashioned, and costly to run. Their breadth of target market, very wide in previous years, is no longer working for them in the new economic environment. In a positive move they are re-arranging product on the shelving, to group products together that would be used together (rather than by product type) – to make the shopping experience more pleasant and easier. On the other hand, Lidl are taking advantage of the trend by shoppers to make small purchases and are opening over 280 new (small) stores in London, including affluent areas such as Chelsea and Mayfair ( As discussed above retailers are reviewing from a marketing and operations perspective the range(s) of products made available through different channels and/or locations. Examples such as Amazon in the UK, and Walmart in their US market are limiting the geographic coverage of their internet offering. Similarly the examples of Aldi and Lidl are (initially) limiting the range of products available through their different channels. Undoubtedly the product range available through the internet channel will extend as the companies find their place in the market, already Amazon has added both chilled / frozen foods to their UK listing ( aspx?id=23&tid=3&nid=14378&ecid=12580). Delivery speed As discussed above the typical model of shopping by internet for grocery products is “next day“ delivery, or maybe you can plan in advance for a longer time period, e.g. ordering on Wednesday for a weekend delivery. But speed has become a crucial competitive factor. In the grocery market Amazon Fresh (available to Amazon Prime subscribers) have launched their same day delivery, with the delivery allocated to within one hour of ordering. See above for the full Amazon Fresh proposition. In a similar vein a non-grocery company, Argos, have launched their delivery service Argos “Fast Track”. Argos are a household goods store (everything from wardrobes, to lawnmowers to watches) that uses a catalogue/ website, with its traditional collect in store model. Large items could always be delivered to the customer’s home. Now with “Fast Track” for a delivery charge of £3.95 (5 euros) products can be delivered on the same day, it emphasises this, its publicity states – “Buy before 6pm, delivered by 10pm” ( fast-track.htm?tag=ar:home:editrow1:slot2). Until their new service was launched a customer would have only the possibility of selecting the day of delivery; and previously a delivery slot would have been anytime that day between 07.00 and 20.00. Whilst Argos is not a grocery retailer, it does add to the competitive arena, and customer expectations are set in the public arena. Loyalty mechanisms Supermarkets have for many years attempted to create loyalty amongst their customers, the most significant method being a ‘loyalty’ card, e.g. Tesco (Clubcard), Sainsbury’s (Nectar). The most obvious example of a different form of loyalty card is that promoted by Amazon, with it Amazon Prime subscription; by holding this it enables the customer to access other superior service options not available to non-subscribers; e.g. Amazon Fresh (see above). Recently the grocers, Waitrose, have added to their ‘myWaitrose’ loyalty proposition by encouraging members to “Pick your own”. This new facility allows members to select 10 of their favourite products through their ‘myWaitrose’ account, and by doing so will receive a 20% discount on the regular price every time they buy those products. 14

Romanian Distribution Committee Magazine / December 2015 /

A different form of mechanism to encourage loyalty to a particular retailer has been implemented by the French retailer Carrefour in Belgium. According to IGD, Carrefour Belgium has unveiled the Afterwork Pick-up Point at the offices of television and radio stations RTBF and VRT in Schaerbeek which house more than 3,000 workers ( aspx?id=117&tid=11&trid=4&nid=13938). “Users place orders via a dedicated website, which offers 7,500 lines including fresh daily bakery products, by 11.00 on the day required. Orders can be collected between 15.30 and 20.00”. For Carrefour this launch of ‘Private Drives’ in Belgium (as they are titled), and with others coming on-stream in France, its expectation is to make online shopping more convenient; and therefore translate into customer loyalty. Product range Over the decades the major UK supermarkets have prided themselves on providing a range of products, being able to offer products at different price/quality ranges. Amongst the very large ones, supermarkets such as Tesco and Sainsbury’s differentiate their ranges with designations such as: Everyday value – Finest (Tesco); and Basics – Taste the Difference (Sainsbury’s). With this they have been able to serve a breadth of market segments. In addition the major supermarkets have over the years developed the ambience of their stores to be more attractive, and provide a pleasant shopping experience. More recently with the influx of the ‘discount stores’ e.g. Aldi, Lidl, the business model is changing. For them their proposition has been based on a limited range of goods, low prices and a simple operating model. Alongside this, until the current year they had little interest in developing an online presence; thinking it to be too costly and add additional complication to their operating model (Daily Mail b 2015). As discussed above their proposition has become more and more attractive, with focussed excursions into offering product types not normally associated with the discounters. This has attracted new customer types, and has enabled Aldi to open over 40 stores in 2014, with plans to open 65 more in 2015 (Daily Mail b 2015). It is also developing its store-based product range; and it has launched itself into the internet shopping arena, albeit offering a limited range of products through this channel. In contrast, under pressure Tesco is reducing their 90,000 item product range by one third, to refocus their market targeting and save costs (Daily Mail a 2015). Some 20,000 items will no longer be available on the shelves. At the same time it is promoting its internet shopping – home delivery and click and collect to retain its market share. These developments are summarised in Table 1 below.

Table 1 Internet Shopping Developments in 2015 Company

Process /Focus




Internet shopping

Wine online / using same delivery Co as Fortnum and Mason, and Waitrose

Limited product range for this channel

Amazon Fresh

Internet shopping / Same day delivery

Adding Chilled and Frozen foods to a total of 10,000 skus

London and Birmingham only. Amazon Prime £79 pa + £6.99 delivery

Argos (nongrocery)

Internet shopping

Same day delivery Nationwide distribution

£3.95 per delivery

Carrefour (Belgium)

‘Private Drive’

Onsite delivery /collection point for office workers

Commercial relationship with TV and Radio company


Independent collection stores

Collection, and return locations based at mainline train stations

Network of Retailers / Logistics companies

Lidl (Germany)

Internet shopping

Wine Tea coffee. Uses ‘Vorratsbox” – storage box as a collection point

Limited product range for this channel

Google (USA)

Internet shopping / Same day delivery

Fresh foods

San Francisco only


Tube station lockers

Company is dismantling these collection points

Not used by the expected targets, so removed them


Store layout

Grouping products together by use

To make shopping easier

Reduced Product range

Source: Author

90,000 items reduced by onethird (minus 20,000 items)

To compete more easily with Aldi / Lidl ‘s focussed in store product range

Dynamic and Competitive Environment In the UK the grocery market has been dominated by the 4 major supermarkets with over 70% (Kantor Worldpanel, reported But changes to how the market will be served is characterised by the Institute of Grocery Distribution (IGD) forecasting that the market for internet shopping of groceries in the UK alone is to double by 2019 to £17bn (12.5 million euros); ( With shoppers response to the economic crisis, the accessibility and sophistication of internet shopping and new entrants it is clear that it is a fiercely and divergent ecology. New players, in the area of internet shopping for grocery products (in the UK, such as Amazon Fresh, Aldi) will have to establish their markets, and generate a customer following; whilst the existing organisations will need to adapt to changes in shopper’s behaviour and continue to create benefit from their large footprint stores. All the international major supermarkets (e.g. Carrefour, Tesco, Walmart) have some very large footprint stores. All these organisations will need to develop the operating model(s) which are attractive to their market segments and customer base, and retain their loyalty. At the same time they will need to recognise that the overall fulfilment operation (product supply, management and delivery to the customer, and the customer contact point) may be supported by external or partner companies. As competition becomes stronger this will become an even greater challenge for their management teams.


Romanian Distribution Committee Magazine / December 2015 /

Appendix 1

Table of Omni-Channel Retail/Fulfilment Models Model



Post-Transaction Processing


Delivery mechanism


Browse internet


Pick from warehouse

Deliver direct to home

Courier / Postal service/ Retailer


Browse internet / Retail Store


Pick in store

Deliver direct to home/ office/ workplace

Courier / Postal service/ Retailer


Browse internet


Pick in store

Collect at Retail Store



Browse internet


Pick from warehouse

Collect from “Click and Collect” store



Browse internet


Pick from warehouse

Collect from local store / Convenient location



Browse in Store Order in Store / Shopper mobile phone

Pick from Deliver direct to warehouse or in home store

Courier / Postal service/ Retailer


Browse in Public Space

Pick from Deliver direct to warehouse or in home store

Courier / Postal service/ Retailer


Browse internet, Order Public Space/ Mobile

Pick from warehouse


Order in Public Space – mobile phone

Collect from convenient Independently owned location

Bibliography / References Colla E, Lapoule P, (2012),”E-commerce: exploring the critical success factors”, International Journal of Retail & Distribution Management, Vol. 40 Iss: 11 pp. 842 – 864 Dorfmann L, (2014), Talk “Challenger Businesses”, Radcliffe Centre, University of Buckingham, UK Hawkes S (2013) “Amazon ‘among retailers looking at Ocado’ Daily Telegraph, UK Layton A, (2012) Presentation at Operations Management Workshop, Roehampton University, UK Rowell J. (2013) “ Omni-Channel Retailing”. Romanian Distribution Committee Magazine, Romania Vol 4, Issue 2, p12-15 Romanian Distribution Committee, Romania Daily Mail a “Why you might get lost in Tesco…” (2015) Daily Mail 2/09/15 Daily Mail b “Aldi offers bargain fine wine online” (2015) Daily Mail 29/09/15 accessed 24/6/2013 accessed 18/4/2013 accessed 24/6/2013 accessed 12/6/2013

accessed 12/6/2013 accessed 28/10/2015 accessed 05/06/2015 accessed 02/10/2015 accessed 23/10/2015 accessed 23/10/2015 accessed 28/10/2015 accessed 28/10/2015 accessed 2/11/2015 accessed 6/10/2015 accessed 6/10/2015

© james rowell 2014

Prof. Eng. Ph.D.

Victor GREU

F a c i n g I oT - T h e N e w G i a n t Wa v e of the Information and C o m m u n i c a t i o n s Te c h n o l o g i e s Development


In Calarasi City, on the left shore of Borcea a Danube branch

Romanian Distribution Committee Magazine / December 2015 /

Abstract: The paper main goal is to systemic analyze an emergent field of the information and communications technologies (ICT), the Internet of things (IoT). Starting from premises as the mass proliferation and the „giant wave” of IoT in the larger context of Information and Communications Technologies (ICT) exponential evolution in the Information society (IS) toward Knowledge Based Society (KBS), which penetrates and transform almost anything, the paper identifyed and analyzed the essential implications/conditions of IoT development at Earth scale: the main driving factors(DFAC), resources(RES) and challenges(CHA). For DFAC, a systemic criteria, generally for ICT evolution and then for IoT development, would be to follow simplicity and essential needs rules when expanding, because despite all expected benefits of any application, especially when large numbers are expected, negative consequences could refer to Earth resources fading, climate changes (CO2 footprint at planetary scale), humankind healthy/secure evolution or World social unbalances. A special focus is on health, because despite the real amazing achievements IoT could bring, considering the actual ones, we have to watch the IoT development as some products/services and facilities could directly or indirectly harm humankind healthy evolution. For RES and CHA, the technical essential implications/conditions of developing IoT at Earth scale are analized. Here IoT as a Big network of networks, Big Data processing, the survival of Moore Law and power/ energy sources were analyzed pointing the corresponding main challenges and solutions perspectives. Finally, among the big „Questions” concerning the main challenges of IoT development, the paper adresses the complex field of educational consequences, concluding on the tremendous influence of IoT/ICT in IS/ KBS on humankind evolution and emphasizing the capacity to optimally use the technological progress (first considering the Internet) and the creative potential – which eventually influences innovation and...ICT.

Keywords: Internet of things, communications and information technology, , content centric networks, mobile-cloud convergence, climate changes, information society, knowledge based society.

JEL Classification: L63; L86; M15; O13; O33

1. What could hide a giant wave? We recognize that our question is a little rhetorical, as the intention was to point the high level of incertitude we have to expect, inherently, from something „giant”. Anyway, for finding an estimate we have to recall again our best „friend”: the imagination. Speaking about imagination, how could we forget in this context the Albert Einstein magnificent words: Imagination is more important than knowledge (because the last is limited). This introduction is perhaps too complicated, because we try to identify in this paper some essential implications/conditions of developing Internet of Things (IoT) in the larger context of Information and Communications Technologies (ICT) exponential evolution, after we have analyzed some important aspects of IoT in our previous papers [2][4][8]. One of the relevant mentioned papers conclusions was the fact that the digital era we live in the Information society (IS) toward Knowledge Based Society (KBS) could be mainly characterized by the ICT driving power, which penetrates and transform almost anything. Now it is easy to understand all the context of developing IoT, as many actual definitions [7][6][10] [11][5] consider, more or less directly, IoT as Internet of Everything. This way we came back to our initial question and its obvious answer: something „giant” like IoT has clearly the potential to hide (cover) almost anything. As a matter of fact, for this paper the question point is to focus on the necessary implications, meaning conditions or problems to be solved in order to (optimally) develop IoT at planetary scale. Of course we are focusing, as we have mentioned above, on essential implications of IoT development and we include here the main driving factors(DFAC), resources(RES) and challenges(CHA). In the same time we have to agree that these three issues could not be approached whithout some inherent explicit connections with IoT actual status (developing phase), implemented applications/areas and already visible difficulties we have mainly analyzed before [2][4][8]. It is also clear that such a huge and complex process, which is developing IoT at Earth scale, is anyway impossible to be accurately foreseen and this is mainly the case when we point the essential features. A first difficult issue is to define what is essential, even after we have considered, as a first approximation, three main aspects.Then we have to define each aspect, mainly by identifying some of its subsequent components. As a minimal systemic approach, we consider that a first observation is necessary, as it is also obvious that our approach for the three „main issues” is very relative and they are not accurately independent. The goal of this analysis is to provide criteria for a stable/sustainable and optimal development of IoT, taking into account that a chaotic mass proliferation of IoT could generate huge resources consumption and other unpredictible consequences. Of course, one could say: On Earth there is generally a free market economy and globalization is also obvious. So what about limits, criteria or selective development? Here we must recall something about Earth resources fading, climate changes, humankind healthy/ secure evolution or World social unbalances! Speaking, for example, only about climate changes, the specialists already expressed skeptical opinions on the recent achieved Paris Agreement, which is trying to obtain the maintaining of temperature increase under 2°C until 2100. The details of this skepticism will probably be provided by every season’s weather increasing agressivity and ... temperature. In particular, IoT/ICT contribution to CO2 footprint could become consistent considering „the giant wave”. As a consequence, a systemic criteria, generally for ICT evolution and then for IoT development, would be to follow simplicity and essential needs rules when expanding, because despite all expected benefits of any application, especially when large numbers are expected, the CO2 footprint at planetary scale must be carefully analyzed. Although IoT/ICT products and services are implemented for an immense diversity of areas, the standardization must have an essential role for conformity with technical requirements but simplicity and essential needs rules could be also included. On the other hand, it is quite impossible to build a rigorous model for a such huge process and that is 20

Romanian Distribution Committee Magazine / December 2015 /

why we will detail the components of the considered issues as much as possible close to these premises. Still we have identified [2] the main rule of the driving factors for IoT: to obtain added value by processing the collected data, for goals like energy (power, fuel etc.) consumption reduction, health improvement and almost always ... money/resources savings. Now we add, as a complementary criteria, the well known principle of medicine: „Heal as much as possible, but do not harm!” So IoT must optimize as much as possible, but without considering a single criteria while totally neglecting/omitting others. In order to obtain added value, but keeping the risk (secondary effects) at controlled levels, IoT future devices/applications must be „smart”, this way providing the specific difference versus existent electrical/ automation devices and premises. An other systemic approach element is the separation of the there issues in two categories. The first category (DFAC) is associated with humankind needs and social/political aspects, as the main driving factors of IoT implementation. That is why this will be first analyzed. The second category, to be presented in the next section of the paper, includes the resources and the challenges we suppose to be (considered) mainly technical, but we agree that this assumption is again a relative true. In order to identify the DFAC main components, we have inherently to observe, by some examples, the actual tendencies, needs and features of the IoT applications, without repeating the details from [2][4][8], but rather sending, when necessary, to them. We have already proposed [2] a systematic approach describing the actual main directions of IoT development, but here we have to add for them some possible associated criteria of selection. The principal direction of IoT applications are focused on collecting and processing data concerning the operation/existence of a „thing”/device in order to optimize that thing/device operation/existence. The problem is that the actual tendency is too general, as such „things” could include industrial machines, home appliances, cars, toys, animals or ... trees. Here the associated criteria of selection should provide orders of priorities to be considered for investment and development. For example, the entertainment industry is now including personal products/services by „assistents” (as robots, games etc.) matching the individual actual emotions/disposition, toys, gadgets for pets etc. Even in the more „natural” optimization fields, like home appliances, we should analyze whether is efficient/justified or not to extend IoT applications for „everything” (like decorative automatization, air smelling or colour/design variations etc.). Here the criteria could apply for energetic efficiency, but also for cost or security reasons. The second main direction we identified is focused on individual/human body, in order to collect personal data useful for that person (generally for health, but not exclusivelly) or for entities interested in person’s behaviour. Here the diversity and dynamic of IoT applications is huge and difficult to be selected by concrete criteria. Still we can make some pertinent observations, just because the focus is the humankind and the long term consequencies, either positive or negative, IoT applications could bring for him. Because health is always on top, despite the real amazing achievements IoT could bring, considering the actual ones, we have to watch the IoT development as some products/services and facilities could directly or indirectly harm humankind healthy evolution. For example, we have to stimulate applications that leverage health/life improvement, education, creative potential and respect for human/environment values, but not the ones which enable the sedentary behaviour, human body invasive or immature devices/procedures, environment pollution etc. All the above mentioned negative consequencies could already be observed or foreseen, as excessive/ inefficient automation or immature health/clothes IoT devices are possible. It is important to also observe that the real concerning is probably not coming from the examples of above „short” list, but from the ones, probably not in a short list, we did not expressed/identified yet. Among the other fields, along with health, the largest area of all, in fact huge versus all other (including health) will be covered by IoT industrial and commerce applications.

That is why, the aim of „outcome economy” is the expression of the intermediate steps to optimize IS/ KBS, as products and services, at most from ICT, which will be designed and implemented to provide specific (customized) results [6][12][14][15][2]. Despite this remarkable feature of customized results (sometimes just because of that, single criteria is probable), the risks of generating undesired consequencies remain, considering the large diversity and especially the huge number of applications of IoT at Earth scale. It is sufficient to imagine what could bring for humankind and generally for the Earth environment, the expected (by 2020) 20-50 billions of IoT devices [19][11][13], from the point of view of consumed resources, data/information collecting/transmitting etc. Again without claiming completeness, we can add, after the health field, other important fields, like Earth resources/environment or legal conformity (including intimacy or security), we have detailed, as purposes, in[2]. As we already have mentioned that the analyzed categories are not totally independent, lets conclude here the first (even incomplete) category, for continuing the analysis in the next section. 2. Facing Big Networks, Big Data and ... Big „Questions” The technical essential implications/conditions of developing IoT at Earth scale, we intend to analyze here, are also difficult to define/identify, for a such huge, complex and dinamic process, in the context of exponential pace of ICT evolution on IS way towards KBS [2][4][15][16][18]. Why starting with Big Networks? It is largely agreed that IoT will be, from the point of view of communications infrastructure, a network of networks. As we are speaking about more than 20 billions connected IoT devices, either small or big, all together will increase the World Internet at dimensions never foreseen and consequently we will have to face very complex challenges when billions of new sensors will require unique IP addresses. We have mentioned of course [2] that the extension of IPv6 (replacing IPv4) will provide practically unlimited number of adresses and make the management of networks easier due to auto configuration capabilities, offering too improved security features [11]. IP adresses represent still only a necessary, not sufficient, condition to technically be fulfilled in order to have a functional IoT at Earth scale. The future Internet challenges, relevant also for IoT evolution, include a diversity of new approaches to be studied and eventually implemented. Among these Internet approaches we can include Content/Information Centric Networks, MobileCloud Convergence or WiFi-LTE Integration etc. Everyone of these new concepts could take some pages to be shortly presented, but here the point is to focus on the estimated essential problems/solutions picture, emphasizing the unbalanced categories. In the case of Internet, a system approach tell us that the challenges are so overwhelming, even without the emerging IoT, considering the actual phase of ITC and cloud computing/services, that despite all the actual research, it is difficult to estimate the real balance problems/solutions foreseen for more than 5 years. Content Centric Networks could optimize the traffic speed for the ever increasing request of information/ data downloads (search for topics – Google type), by introducing „name-based routing protocols” [1]. Although IoT will be deployed in a huge diversity of fixed sensors applications, for performance applications mobile Internet traffic will represent the worst case scenarios. On this way, the actual tendencies are characterized by searching new strategies allowing to shorten the distances (reducing latency). Among the most important and realistic approaches toward this goal are Mobile-Cloud Convergence and WiFi-LTE Integration. These approaches have also the advantage to be relatively easy to implement as they basically combine existing technologies (WiFi-LTE Integration) or needs small/feasible adding to existing technologies (MobileCloud Convergence). Mobile-Cloud Convergence represents, by our opinion, a prominent tendency/approach of future Internet/ICT, which will have important consequences for IoT too, considering not only the mobile IoT devices 22

Romanian Distribution Committee Magazine / December 2015 /

but the applications/services that will use fixed IoT devices connected with mobile users like smartphones, tablets, laptops etc. For instance, in Romania (population under 22 millions), where the broadband Internet performances are prominent for Europe (EU too), the number of SIM cards (by ANCOM-The National Authorithy for Management and Regulations in Communications) are over 22.7 millions (in 2014, +1,8% versus 2013). In fact, Mobile-Cloud Convergence is a general concept (an ever increasing „desire”), but some concrete solutiones are already foreseen. For example, a natural approach is to built Internet-edges data centers (cloudlets), in order to reduce traffic on backbones and also latency by shortening the distances end-to-end [9]. Big Data is an emergent, but very general concept, regarding an ever encreasing challenge of ICT and IS/KBS. „Very general” means, in the case of Big Data, the fact that there are a lot of interpretations around of these two words. We also presented [15][17][20], that the emergent „data deluge” is a very serious challenge for IS/ KBS, but meantime, the profound and esssential significance of the tremendous process of generating data on Earth (think also to Pluto mission!) has been partially wasted. With other words, today Big Data is often used to express application that deal with a lot of data, fact that is not totally wrong. Our opinion is that the term which regards the ever increasing amount of data generated in a single application must be different from the generic term for the top/special data flows generated in the prominent World projects (like Large Hadron Collider, climate changes, brain map etc.). Anyway we have to recognize that the difference between the two generic cases is very dynamic (time sensitive), due to the exponential pace of ICT. Remember that it took decades to add other projects to the huge computing power needed for nuclear explosion simulations and now we have many similar projects but the computing power figures have radically changed. The reason we prefere a particular term for the highest data flows generated of ICT is just the essence we foreseen relevant for IoT in this paper. Here we want to emphasize that a „data deluge”, like top World projects generate and also IoT is expected to do as a whole or by special applications, needs new approaches concerning the data processing, storage and interpretation. Thus we need adequate strategies and algorithms in order to face the „data deluge”, especially in real time applications, but not exclusively. Considering these premises, our opinion is that the medium/long term evolution of ICT and generally IS/KBS, including IoT, will have to find new approaches in order to optimally use and benefit from the immense volume of data that will be available. For IoT, but not only, a special remark must be considered, as it essential to understand that the „self managing” power/services that will be eventually provided by IoT optimization applications do not replace (cover) the ever increasing need for data analysis (now covered by data analytics), information refinement and finally knowledge/decision creation for responsible people/authorities, as we already generally mentioned [17]. An interesting observation we propose for analysis is just about the Internet itself, as the biggest ever created source of information/documentation, which will exponentially increase, but is far from being optimally used by the humankind. We recall that the data generated in the last 3 years is comparable with all the rest of humankind history. This picture could be incredible, but we recall that estimates for 2020 are of about 44zettaB generated, 7billion connected people and 50billion connected devices [19] [11][2][4][8]. Why ending with Big „Questions”? If all answers would be that simple: Because they never ... end! Indeed, with all World optimism, we have to agree that our Big „Questions” never end and this is something natural. Even the fact that these questions are more and more complex and complicated is natural in IS/KBS, but the unusual comes when we feel that their answers become too difficult to find!

That is why we have to watch [17] and avoid to get to that point of „no return” or „no answer”! Perhaps one of the easiest questions (for actual research it is still a nightmare!) is how to continue Moore Law or get similar, as IoT will be one of the hardest consumers of smaller and performant ICT. If we consider only health, as the most important IoT field (by our opinion that should be the case!), the state of the art ICT (and more) will be needed there. When we remarked „more” (than ICT) we thought at the most relevant example we give to students pointing the personal smartphone: Here is concentrated almost all the humankind technical and scientific progress, including ICT but adding physics, chemistry, mecatronic, biology etc. In health IoT the mixture of small performant ICT with smart textiles will get wearable IoT, to mention just the tip of iceberg. Coming back to the ICT actual „nightmare”, we mentioned in 1988 that this moment of MOS nanochannel fading will come and learning from mother nature „research” will help us [20]. The actual status is still optimistic, as latest research is testing new models of chips which integrate CPU (central processing unit) and memory [3], as one of the most promising new paradigm of future core ICT. A more difficult big question will rise from the necessity to provide power for 50 billions IoT devices, including those implanted in human body. We already presented some new approaches of this issue [2], but the good news come mainly from health IoT and are based on human body energy, confirming again mother nature role. The early solutions, like Thermoelectric Energy Generators or Electric Nano Generators use body thermic energy or movements and could transmit it directly to the implanted/wearable sensors. The other IoT apllications, from an immense diversity of areas (including mountains, forests, sea coasts etc.) containing sometimes thousands of sensors, must take their energy from environmental elements such as materials temperature, vibrations, light, airflow etc. As we observed, the chain of big questions is never ending, so we choose to select the most relevant ending, in this paper, on most important issue on long term. In the tremendous increasing IoT/ICT products and services, for facing all other (mentioned or not) challenges, we consider that education is the most efficient and necessary enabler of the optimization. It is obvious that education generally have itself a lot of components and driving factors. We already expressed [15][18] that ICT role in IS/KBS is a fundamental enabler for the humankind evolution and creative potential. That is why we have to carefully analyze how this role is generally implemented and especially how the IoT „giant wave” could influnce this role. If we only recall the essential role, for their education, of what children see around, then we could notice that the driving factors and development criteria for IoT we have analyzed in the first section must be „amplified”. The most complex component comes from the processes of design, implementation and use of IoT, where instruction/education of large categories of people are involved at large scale. Here, the known opinion of Steve Jobs is very relevant: Computer programming teach you how to think. Still we have to further and deeper analyze the future IoT and notice that if only logical thinking is enabled, the other human features and skills could step by step be reduced. Perhaps the best lesson to learn from the optimization processes associated with IoT is that any application must be systemic optimized (not only custom) and environment implications on long term carefully considered. 3. Conclusions Considering the mass proliferation and the „giant wave” of Internet of Things (IoT) in the larger context of Information and Communications Technologies (ICT) exponential evolution in the Information society (IS) toward Knowledge Based Society (KBS), which penetrates and transform almost anything, the paper identifyed and analyzed the essential implications/conditions of IoT development at Earth scale: the main driving factors(DFAC), resources(RES) and challenges(CHA). 24

Romanian Distribution Committee Magazine / December 2015 /

Considering DFAC, a systemic criteria, generally for ICT evolution and then for IoT development, would be to follow simplicity and essential needs rules when expanding, because despite all expected benefits of any application, especially when large numbers are expected, negative consequences could refer to Earth resources fading, climate changes (CO2 footprint at planetary scale), humankind healthy/secure evolution or World social unbalances. RES and CHA mainly refer to the technical essential implications/conditions of developing IoT at Earth scale. Here IoT as a Big network of networks, Big Data processing, the survival of Moore Law and power/energy sources were analyzed pointing the corresponding main challenges and solutions perspectives. In addition, Big „Questions” concerning the main challenges of IoT development adress the complex field of educational consequences, with focus on the tremendous influence of IoT/ICT in IS/KBS to humankind evolution, regarding the capacity to optimally use the technological progress (first considering the Internet) and the creative potential – which eventually influences innovation and...ICT! REFERENCES

[1] Hitoshi Asaeda, Kazuhisa Matsuzono, Thierry Turletti, Contrace-A Tool for Measuring and Tracing Content-Centric Networks, IEEE Communications Magazine, March 2015. [2] Victor Greu, The information society towards the knowledge based society driven by the information and communications technologies - from the Internet of Things to the Internet of …trees (Part 3), Romanian Distribution Committee Magazine, Volume 6, Issue 3, Year 2015. [3] Pedram Khalili, Kang L. Wang, The Computer Chip that Never Forgets, IEEE Spectrum, July 2015. [4] Victor Greu, The information society towards the knowledge based society driven by the information and communications technologies - from the Internet of Things to the Internet of …trees (Part 2), Romanian Distribution Committee Magazine, Volume 6, Issue 2, Year 2015. [5] Mark Harris, The Internet of Trees, IEEE Spectrum, Mar.2014. [6] *** Industrial Internet of Things: Unleashing the Potential of Connected Products and Services, World Economic Forum’s IT Governors launched the Industrial Internet initiative at the Annual Meeting 2014 in Davos, Switzerland, January 2015. [7] *** The Internet of Things,, 27/02/2015 [8] Victor Greu, The information society towards the knowledge based society driven by the information and communications technologies - from the Internet of Things to the Internet of …trees (Part 1), Romanian Distribution Committee Magazine, Volume 6, Issue 1, Year 2015. [9] Mahadev Satyanarayanan et all, An Open Ecosystem for Mobile-Cloud Convergence, IEEE Communications Magazine, March 2015 [10] Ovidiu Vermesan, Peter Friess, Internet of Things: Converging Technologies for Smart Environments and Integrated Ecosystems, 2013 River Publishers. [11] Dave Evans, How the Next Evolution of the Internet Is Changing Everything, Cisco White Paper - The Internet of Things, April 2011. [12] Jim Chase, The Evolution of the Internet of Things, White Paper-Strategic marketing Texas Instruments, September 2013. [13] Analysys Mason, Imagine an M2M world with 2.1 billion connected things [14] *** Internet of Things — An action plan for Europe, (PDF). COM(2009)-278 final, Commission of the European Communities -18 June 2009. [15] Victor Greu, The Exponential Development of the Information and Communications Technologies – A Complex Process Which is Generating Progress Knowledge from People to People, Romanian Distribution Committee Magazine, Volume 4, Issue2, Year 2013. [16] Bari N., Mani G., Berkovich S., Internet of Things as a Methodological Concept, Computing for Geospatial Research and Application (COM.Geo), 2013 Fourth International Conference on. [17] Victor Greu, Searching the right tracks of new technologies in the earth race for a balance between progress and survival, Romanian Distribution Committee Magazine, Volume 3, Issue1, Year 2012. [18] Victor Greu, Context-aware communications and IT – a new paradigm for the optimization of the information society towards the knowledge based society (Part 2), Romanian Distribution Committee Magazine, Volume 5, Issue4, Year 2014. [19] *** More Than 30 Billion Devices Will Wirelessly Connect to the Internet of Everything in 2020, ABI Research, London, United Kingdom - 09 May 2013, press/more-than-30-billion-devices-will-wirelessly-conne/ [20] Victor Greu, Information and Communications Technologies are Learning from Nature’s “Research” to Push the Performance Limits, Romanian Distribution Committee Magazine, Volume 5, Issue1, Year 2014.









JEL Classification L81, L82, L86, M31, M37


Romanian Distribution Committee Magazine / December 2015 /

George Cosmin TĂNASE

Done effectively, a YouTube video can add a viral component to a company’s web marketing strategy. You see, when you post a video to YouTube, that video takes on a life of its own. It will be viewed by thousands of YouTube users, posted to numerous websites and blogs, emailed around the Internet—you name it. Any user watching your video is now a potential customer— assuming that you include your website’s address or other contact information in the video itself. Not surprisingly, it appears that YouTube is replacing traditional television viewing for many users. According to Google, an average YouTube viewer spends 164 minutes online every day; in contrast, viewers spend just 130 minutes per day watching traditional television. The number of videos and users on the site continues to grow, which is great for businesses looking to take advantage of the opportunity. In fact, the growth has been nothing short of stratospheric; traffic to the site has doubled in just the past two years.

How Can YouTube be used to Market A Business? Given the huge number of companies that embrace YouTube videos, it should come as no surprise that there are a lot of different ways to use the site. Every company has its own unique goals for their YouTube marketing. Some companies use YouTube to generate brand awareness. Some use YouTube to promote a particular product or drive sales to their retail store or website. Others incorporate YouTube as part of their product or customer support mix, use videos for product training, or even use YouTube for recruiting and employee communications. Anything you can say in person or to a group of people, you can say in a video and distribute via YouTube.

YouTube for Brand Awareness

online viewers are more engaged than television viewers; the Web is a more interactive medium than the passive viewing inherent with television. Brand awareness videos are typically entertaining, using a soft-sell approach to ingrain the brand’s name and image in the minds of viewers. A good example is the series of videos produced by Old Spice, capitalizing on the popularity of its 2010 “The Man Your Man Could Smell Like” commercials.

YouTube for Product Advertising If you can use YouTube to push an overall brand, you can use it to push individual products, too. This requires a more direct approach, although it’s still important to make the video informative, educational, or entertaining. To promote a product, you want to show the product in your advertising, as Nike does with its Bootcamp Drill videos, for example. You can show the product in action or used as part of a demonstration or tutorial. Just make sure you include lots of close-up product shots and link back to your own website—where more product information is available.

YouTube for Retail Promotion You can also use YouTube to promote a company’s retail stores. These videos can be general in nature (which gives the videos a long shelf life), or more specifically targeted to shorter-term promotions (“check out this weekend’s specials!”). But a video that is nothing more than a store advertisement probably won’t attract a lot of viewers. A better approach is to find a way to showcase the store without resorting to claims of 20% off and “this weekend only” specials. For example, you might want to record a short store tour or highlight individual departments or services within the store. You can even produce educational videos that demonstrate the products or services your store offers, like the ones for Home Depot.

Large national companies and major advertisers often use YouTube to enhance the awareness of their brands. Instead of focusing on individual products or services, YouTube for Employee Communications these videos push the company’s brand, often in the same fashion used in traditional television advertising. You can use YouTube for all manner of company communications. Instead of holding a big company In fact, online videos are better at imparting brand meeting just so that the big boss can give his yearly state awareness than are traditional TV ads. A Millward of the company address, have him record the address Brown study found that online viewing led to 82% and post it on a private channel on YouTube. Employees brand awareness and 77% product recall, compared to can watch the presenter say his thing from the comfort just 54% brand awareness and 18% product recall for of their own desks, while they are on the road, or even similar television ads. Experts believe this is because at home. In fact, many companies find that YouTube is

a fast and effective way to disseminate all kinds of employee information. Done right, it gets information out there in near–real-time, with all the benefit of face-to-face communication, which is a lot better than sending impersonal memos via email.

YouTube for Recruiting Finally, don’t underestimate YouTube as a recruitment tool for new employees. If you have a company welcome video, post it on YouTube and make it public. Think of this as a PR exercise to attract new talent to the company, which means doing it up right—it’s as much a marketing project as it is something from the HR department. You can link to the video from all your recruiting materials, even from any traditional ads you place. Don’t limit yourself to a single long puff video: Produce separate videos for individual departments, as well as to illustrate company values, employee benefits, facilities, and the like.

What Kinds of Promotional Videos Should a Company Produce Let’s narrow our focus specifically to promotional videos—those videos produced to market a company, its brands, or its products and services. What types of videos work best to get your message across? While there’s a lot of variety, depending on the type of business or product being marketed, the key is to offer a video that YouTube users actually want to watch. That means a video that has some sort of entertainment, educational, or informational value. In other words, your video needs to entertain, educate, or inform—or no one will watch it. Informative Videos One way to do this is to create the YouTube equivalent of an infomercial; that is, a video that provides useful information to the viewer. This information can be anything from a guided tour of a new product to a company spokesperson talking about larger industry trends. It’s a newsy kind of approach, one that leaves the viewer more informed than he was before he started watching. For example, if you’re a travel agent, you can produce an informative video that provides a guided tour of one of your featured destinations. You could also take a more talking-head approach, and have one of your agents talk about travel trends in the coming season. Or maybe you put together some PowerPoint slides comparing travel costs to different destinations. The key is to provide information that your current or potential customers find truly useful. This helps establish your company as the authority on this topic; when the customer wants to pull the trigger, he’ll think of you because of the useful information you provided. The key is to provide enough useful information to be of practical value to viewers, and then make it easy for those viewers to click through to your site for more information or to purchase what you have for sale. It can’t be a straight advertisement; it has to be real information, presented in as straight a fashion as possible.

Entertaining Videos Informing and educating are important, and you can draw in a fair number of YouTube viewers if you do these things right. But everybody likes to be entertained, which is why pure entertainment videos typically show up at the top of YouTube’s lists of most-viewed videos. What’s entertaining? It’s impossible to say. Maybe you find some funny way to use your product or service. Maybe you put your president or CEO in a funny situation. Maybe you put together a product or industry overview that focuses on the lighter side of things. Or maybe you turn the creative work over to the pros and engage a creative agency to produce your videos. Whatever you do, it has to be something that viewers find interesting and at least a little humorous. It needs to bear up to repeat viewings, and it should be something that people might like to share with their friends. Viral videos are a result of people sharing links with each other—and people definitely like to share those videos they find most entertaining. 28

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As you can see, there are lots of ways a company can make use of YouTube videos—from traditional brand and product marketing to customer support and employee communications. In almost all instances, you don’t have to spend a fortune doing making videos for YouTube. And, of course, you don’t have to give a penny to YouTube; everything you post on the YouTube site is completely free of charge. The key is to not overthink or overanalyze the opportunity.


[1] Bhatnagar, N., Aksoy, L. and Malkoc, S.A. (2004), ‘Embedding Brands within Media Content: The Impact of Message, Media, and Consumer Characteristics on Placement Efficacy’, in Shrum, L.J. (ed.), The Psychology of Entertainment Media. Mahwah, NJ: Lawrence Erlbaum Associates, 99–116. [2] Duncan, T. (2002), IMC: Using Advertising & Promotion to Build Brands. Boston, MA: McGraw-Hill Irwin. [3] Fill, C. (2006), Marketing Communications: Engagement, Strategies and Practice. Harlow: Pearson Education; Rossiter, J.R. and Bellman, S. (2005), Marketing Communications: Theory and Applications. French Forest, NSW: Pearson Education Australia. [4] Martin, K.D. and Smith, N.C. (2008), ‘Commercializing Social Interaction: The Ethics of Stealth Marketing’, Journal of Public Policy and Marketing, 27(1), 45–56. [5] Pickton, D. and Broderick, A. (2005), Integrated Marketing Communications. Harlow: Pearson Education.

Challenges of the modern retail trade Theodor PURCÄ‚REA

Abstract: The retail space, as a crucial factor influencing the customer’s feelings, continues to be under great pressure of adopting and embedding digital processes, while supporting the food education, the fight against waste, and the respect for the environment. Today’s shoppers are turning to their mobile devices throughout the shopping experience, their smartphones becoming more integral in their daily lives, while businesses are choosing among many different ways to make the in-store experience mobile-friendly, taking advantage of this significant touch point. The evolution of the modern retail trade in Romania continues to be spectacular in what concerns competing in offering customers consistent experiences whether they interact with a brand in-store, online or via mobile. by delivering them content fast and seamlessly across all these channels, while also not forgetting that the foundation of retailing is understanding what customers want and need, and consequently developing a deep understanding of the decision journey that the new shoppers undertake. The evolution of the mobile phones in Romania is also spectacular, consumers becoming step by step more preoccupied with the features and technological qualities of their smartphones, and this is offering opportunities for stores to experiment and innovate.

Keywords: Future Food District, Food Education, ERA Hall of Fame, In-Store Mobile, Marketing, Modern Retail Trade

JEL Classification: L81; M31; M37; O14; Q55


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Challenges of the modern retail trade

Expo Milano 2015, the year’s most talked-about event, and most successful. The “Future Food District”, the culture of food, the food education, the fight against waste, and the respect for the environment As we underlined in the las number of our RDC Magazine, “Expo Milano 2015” confirmed the opening for an intercultural journey offering ideas and shared solutions, and “SHOP 2015” was challenging indeed to reflect at the retail space as a crucial factor influencing the customer’s feelings, at the necessary increased focus on integrating retailers’ various channels, while considering the impact of the converged lifestyle which has empowered consumers, and step by step understanding better the need of driving convenience, service, and relevant personalized experiences through the use of digital store technology. ” “SHOP 2015” was also a true opportunity to launch an invitation of working together to build the foundation for the “Road Map for the Store of the Future” Project. (Purcarea, 2015) And this within the framework of approaching the topic of “Distribution, the challenge of the super agility. From following the trends to actually doing something about them”, the contents of the Agenda (as Keynote Speaker) being as follows: Evolving and Reinventing the Supply Chain; Where We Are Today… facing “The eight essentials of innovation”; The 21st Century Retail Customer, and the Pillars of the Modern Commerce; Understanding the Buyer’s Journey, and the Shoppers of the Future; What Will the Bricks and Mortar Shop of the Future Look Like; Continuous Development of the Retail Market in Romania; Romania, an attractive country in terms of further investment; Best serve TODAY’s omnichannel shoppers, being ready for THE FUTURE… STORE. At the end of October this year, (Purcarea, 2015) we highlighted that as we are under great pressure of adopting and embedding digital processes (the pace of innovation being extraordinary, while performance metrics begin to include customer-satisfaction scores as a result of new or improved digital offerings and user experiences), it is our duty to reconfirm that only the passion, the competence and the perseverance of Professor Virgil Popa made it possible to build a real brand such as Supply Chain Management (SCM) for Efficient Consumer Response (ECR) Conference. The theme of this year’s SCM 4 ECR Conference (organized at the International Conference Center of Valahia University of Tȃrgovişte on October 30, 2015) was: “The New Challenges of Digital World: Consumer Engagement in SUPPLY CHAIN MANAGEMENT for Efficient Consumer Response”. And within that context, we also remembered that the Italian architect Carlo Ratti (also a Professor at the well-known Massachusetts Institute of Technology, Boston, being Director of the MIT’s Senseable City Lab) has worked together with the supermarket chain “COOP Italia” (Italy’s largest supermarket chain, which follows the natural production chains in organizing the store’s main sections; a research commissioned by Coop Italia and Sita identified 6 eating habits which mean six different ways of shopping) by bringing to EXPO Milano 2015 the so-called “Future Food District”, a supermarket functioning within a pavilion (the “Vertical Plotter”, considered the largest plotter in the world) where EXPO visitors can purchase items while having different options such as: checking out infographics aggregating the supermarket’s data on a large wall; downloading an app (which was developed by Accenture for Coop and CoopExpo, and increases visitor awareness inside this supermarket) and typing in their preferred diet etc. Their common target was to see whether introducing processed and reinterpreted digital information (about browsing and purchasing thanks to a computerized system including the arranged at the center of one stand robotic arms which are performing acrobatics as they move apples and cups into different places) into such a food store would affect the way that consumers interact with and select food, while also providing their feedback thanks to this new forms of interaction (which are facilitated by COOP Italia’s decision to substitute the usual supermarket shelves with low and long wooden tables, looking friendlier and explaining to the customers where the products were grown, for example) with food within this unique more informative, engaging and surprising shopping experience via flat screens, displays and interactive tables. It is already known that the above mentioned “Vertical Plotter” (this version designed for EXPO Milano 2015), is a device (that moves on a vertical wall and allowing the reproduction of messages, images, and graphics, converting in reality the received digital information) drawing on the facade Expo visitors faces of the supermarket, this way each EXPO visitor becoming part of an architectural process.

At the beginning of November 2015, (Purcarea, 2015) the well-known Event Portal (section “Italia da Gustare”) has attracted our attention by publishing a challenging message (http:// from Riccardo Garosci, President of Miur Committee “School and Food”, Expo Milano 2015, and Coordinator of the discussion table working on Food Education of the Charter of Milan (Table 14: “Food education: an investment for the future”): “Hunger of Self-Pride” - Before and after EXPO” (“Fame d’Orgoglio: Prima e dopo EXPO”). Riccardo Garosci spoke eloquently in support of the culture of food, the food education, the fight against waste, the respect for the environment and for Italy: << … Hungry for good “things” we didn’t have for some time: optimism, good image (individual and collective), and culture… There were six months starting slowly but growing irresistibly. The enthusiasm, but even just the curiosity of 21 million visitors… But a special thought goes to the boys of EXPO. The schools whose teachers with their passionate students – … Volunteers, tireless and smiling. To the young people who worked in the Pavilions and in the Cluster… For showing and sharing with the world that an Expo will leave in the Charter of Milan its intangible heritage: the culture of food, the food education, the fight against waste, the respect for the environment and for our country…>> Allow us to remember within this special context that Romania’s Friend Riccardo Garosci, was an inspiring Keynote Speaker for “SHOP 2015” Conference (May 3-6, EXPO Milano 2015), and he visited Romania’s food productions exhibition stands at Tuttofood (the International Food and Agriculture Show which started two days after the official opening of Expo Milano 2015). Saint Joseph’s University Professor John L. Stanton, Ph.D., Inducted into European Retail Academy Hall of Fame On December 2, 2015, it was with great pleasure that we saluted and congratulated the European Retail Academy (ERA) for Professor John L. Stanton induction in the ERA Hall of Fame. (Purcarea, 2015) ERA was founded in February 2005 at the exhibition EuroShop by Prof. Dr. Bernd Hallier and some of his academic friends to support the Bologna-process and the interaction between theory and application in the field. Today has links to more than 225 research-institutes for trade/ marketing/ tourism all over the world. The ERA Hall of Fame selects each year one professor who stands for outstanding contributions within the international interaction of research and applied sciences. Let us recall the distinguished personalities who have been honored by ERA in the last four years: Léon F. Wegnez, Romano Prodi, Klaus Toepfer, Robert Aumann.


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A few days later we received the following email communication from Saint Joseph’s University ((Media Contact: Colleen Sabatino ‘11 (M.A.), Associate Director, University Communications, 610-6603256, << PHILADELPHIA (December 10, 2015) - John L. Stanton, Ph.D., professor of food marketing at Saint Joseph’s University (SJU) in Philadelphia, Pa., was selected by the European Retail Academy (ERA) for their 2016 Honored Personality recognition and induction into its hall of fame. A full professor at Saint Joseph’s since 1984, Stanton has won numerous teaching and research awards during his tenure at SJU. He has also worked as a manager or consultant for companies like Campbell Soup, Kellogg, Kroger, Melitta and the Tengelmann Group and has authored over 100 peer-reviewed articles and 10 books on food, nutrition and health topics including a seminal article in the Journal of Marketing Research and SCIENCE. Dr. Stanton is a co-founder of the Institute of Food Products Marketing, which hosts food marketing symposiums around the world. A longtime member ERA’s board, Stanton has lived and taught all over the world, including Africa, Brazil, Germany and Ireland. He is a board member at both Herr’s Food Company and Frankford Candy Company, and has been featured on a number of global media outlets including CNN, Fortune and The History Channel. A New Jersey native, Stanton received his bachelor’s degree from the State University of New York at Syracuse and earned his doctorate at Syracuse University in 1973. Stanton directed the Food Nutrition and Health Institute at Temple University until 1984 before coming to SJU. About the ERA: With over 250 global member schools, the European Retail Academy (ERA) has as its scope to act as a virtual platform and as an initiator of workshops/seminars/conferences to bring more transparency about retail-research and retail-education at universities or universities of applied sciences. ERA also acts as a catalyst for sponsors who would like to contribute to reach a high level of trade (retail/ wholesale)-education. About Saint Joseph’s: As Philadelphia’s Jesuit, Catholic University, founded by the Society of Jesus in 1851, Saint Joseph’s University provides a rigorous, student-centered education rooted in the liberal arts. SJU ranks as a top university in the Northeast, and AACSB accreditation of the Erivan K. Haub School of Business. The food marketing department was ranked 10th in the nation for specialty marketing programs by US News and World Reports. The University is also deeply committed to the Jesuit tradition of scholarship and service, earning a place on the President’s Higher Education Community Service Honor Roll and the community engagement classification from the Carnegie Foundation for the Advancement of Teaching. With courses offered on campus and online, SJU prepares its more than 9,000 undergraduate, graduate and doctoral students to lead lives of personal excellence, professional success and engaged citizenship. >>


Let us also recall that on August 1, 2015, (Purcarea, 2015) we showed that: << Marcel Proust attracted our attention that: “Let us be grateful to people who make us happy, they are the charming gardeners who make our souls blossom.” Professor John L. Stanton is that kind of person, constantly advocating for virtues-led management, and promoting the universal values. Honorary Member of the Romanian Distribution Committee, Professor John L. Stanton is a well-known food marketing practitioner… Professor John L. Stanton has been a special invitee of the Romanian American University (RAU) in May 2011. Professor Stanton, an excellent communicator, delivered a „Strategic Marketing” course, relevant and appealing to the RAU students, proving advance knowledge about the topic. On May 11, 2011, Professor Ovidiu Folcuț, Rector of the Romanian American University (RAU) has awarded Professor John L. Stanton the Diploma of „Special Academic Merit”. >> Boosting in-store engagement. The role of in-store mobile marketing We all know that mobile phones are always with us. (Jogia, 2015) The average person spends 90 minutes a day on the phone. (Mobile Statistics, 2015) Today’s consumers take a multi-device path to purchase, 65% even starting on a Smartphone. (Marketo, 2015) The modern retail trade is facing the challenge of in-store mobile marketing, because an actual expectation for today’s shoppers is having the ability to be an informed one. In order to find the best deals and the highest-rated goods and services available, today’s shoppers are turning to their mobile devices throughout the shopping experience, their smartphones becoming more integral in their daily lives. (Levi, 2015) A few months ago,, (Laloux, 2015) for example, reminded us: << what happened in USA with the rising of mobile searches, mobile users, and mobile media consumption; that most smart phone users connect their email to their phone and even check emails on the go; that the QR code brought about the first instance of connecting the physical and mobile customer experience; the significantly evolution of the connection and opportunity between in-store and the mobile; that up to 80% of text messages are opened by mobile users; that geolocating customers and sending them text prompts with discounts when they are in your store’s vicinity is just the beginning; that according to Google 84% of smartphone shoppers will use their phone while they are in a store (8 out of 10 of these people were using their mobile phones to help with their shopping in store); that as there are many different ways to make the in-store experience mobile-friendly and take advantage of this touch point, businesses have to survey customers in-store and online in order to see what types of mobile in-store features they would be interested in receiving. >> A report (Smith, 2015) entitled “Mobile Coupons: Consumer Engagement, Loyalty & Redemption Strategies 2014-2019” (author Dr. Windsor Holden) from Juniper Research (which provides research and 34

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analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary) revealed the following findings: << there will be 1.05 billion mobile coupon users by 2019, up from just under 560 million this year; the surge in user numbers would in large part be driven by increased retailer engagement with the various mobile channels; retailers were now integrating coupons into loyalty programmes to a far greater extent (while focusing on delivering coupons direct to consumers rather than relying on aggregator sites); mobile coupon deployments were benefitting from retailers restructuring their businesses to reflect the wider transition to the utilisation of online engagement channels; while the use of MMS for couponing was expected to cease, disruptive technologies such as NFC (Near Field Communications) and Beacon had the potential to boost in-store engagement in the medium term; geotargeting has provided SMS-delivered coupons with a new lease of life, with retailers seeing high redemption rates from coupons pushed to consumers near their stores; brands are increasingly leveraging the retail database to deliver targeted coupons; lack of adequate POS redemption technology remains the key hurdle to greater deployment and adoption. >> It is worth remembering that mobile coupons (electronic tickets – used in retail stores as part of sales promotions – solicited and/or delivered by mobile phone that can be exchanged for a financial discount or rebate when purchasing a good or service; they can also be used to attract customers to entertainment attractions and other services) are often distributed to SMS (Short Messaging Service), MMS (Multimedia Messaging Service), Bluetooth etc., customers redeeming the coupon at store or online. (MMA, 2007) The Mobile Marketing Association (MMA), the world’s leading global non-profit trade association, comprises more than 800 member companies (nearly fifty countries around the world), MMA members hailing from every faction of the mobile marketing ecosystem (including brand marketers, agencies, mobile technology platforms, media companies, operators etc.), MMA’s mission being to accelerate the transformation and innovation of marketing through mobile, driving business growth with closer and stronger consumer engagement. (MMA, About ) The MMA’ s Mobile Couponing Committee (m-Couponing Committee) developed guidelines earlier in 2007 in collaboration with representatives from MMA member companies. At that time, the members of the Mobile Couponing Committee were the following: The Coca-Cola Company, Ericsson AB, Gavitec (a NeoMedia Technologies Company), Mobile Dreams Factory, SL (“MDF”, the leading Spanish group in mobile marketing, advertising and mobile commerce, as Chair), MoviDream, Nokia Corporation, Procter and Gamble, and ShopText. The above mentioned guidelines underlined, for example, that in some cases the retailer could forward the coupon to a clearinghouse or directly to the issuer (manufacturer of consumer-packaged goods). In December this year, the Mobile Marketing Association (MMA), approached again the topic of “Bridging The Digital & Physical Worlds To Boost Your Marketing Effectiveness, Mobile: The Great Connector”, (MMA, 2015) inviting marketers to go on the good way in harnessing mobile, by understanding (from MMA e-book, Volume 2 on this topic) how location data and context are coming together to enhance the entire marketing cycle. A year ago, in august 2014, the MMA, in partnership with Adidas, released the Mobile Marketing Playbook (which takes marketers through the process of mobile strategy development from start to finish). A month later, in September 2014, MMA attracted the attention on the need to speed the mobile advertising spend optimizing, arguing that marketing executives who choose to lead and move first will open a competitive advantage. (MMA, 2014) Coming back to December this year, let us note that MarketingProfs (Jarski, 2015) showed that according to SIM Partners, when smartphone users are near a store 56% of them want to receive locationbased offers on their phones, 34% of smartphone users wanting location-based offers in mobile wallets. Within this pledge for connecting with location-based offers, it was also underlined that mobile wallet offers drive a 64% higher conversion rate over static mobile Web coupons. The evolution of the modern retail trade in Romania AMRCR (, as professional association established in 2003 by a group of Romanian and international trade managers, (AMRCR, Linkedin) represents the interest of Romanian retail at European level, being also local partner of EuroCommerce and Central Eastern European Commerce Council (and also a member of Employers’ Confederation “Concordia”). On the occasion of the „Mediafax Talks about Retail” Conference (AMRCR, MEDIAFAX, 2015) – organized Tuesday, October 13, 2015, at J.W.Marriott Hotel in Bucharest, by Mediafax in partnership with the Association of Large Commercial Networks in Romania (AMRCR) – the „White Book of the Association of Large Commercial Networks in Romania” has been launched. The AMRCR’s representatives (Delia Nica, Executive Director and Antoniu

Radu, Vice Prezident) presented different actual data from this white book, such as: the modern retail will continue the positive trend of recent years and will grow in 2015, at the expense of traditional trade, rising to 55% of total business; AMRCR brings together major retailers in Romania (Auchan, Billa, Brico-Depot, Carrefour, Cora, Dedeman, Domo Retail, Hornbach, Kaufland, Lidl, Mega Image, Metro Cash & Carry, Mobexpert, Penny Market, Praktiker, Profi and Selgros; new members will join the association: JYSK, a furniture and furnishings retailer, and the sporting goods retailer Decathlon; there are also discussions with IKEA), with an aggregate turnover of 9.06 billion euros last year, and over 75,000 employees; the commerce accounted for 15.8% of Romania’s GDP last year, having the opportunity to grow in the future, and in what concerns occupancy, 22.17% of total employment at the level of 2013 worked in commerce; according to the latest data available (2013) there are a total of 126,771 stores in Romania, fell from 129,875 units in 2012, at the level of the same year, 2013, most of these, namely 118 581, being stores with small area of less than 120 square meters (it is also worth remembering that according to the retail audit company Vektor Marktforschung, the number of stores in Romania independent trade fell from 63,301 units in 2013 to 58,836 units in 2014, a reduction of nearly 4,500 units – Tanase, 2015), while the international retail chains stores raised to retail 1,353 in 2014, compared to 1,103 the previous year recorded version (so more with 250 units).); the modern trade accounts for about 25% of retail space for sale in Romania in 2013, 44.5% returning to traditional trade and 30.5% to HoReCa (Hotel, Restaurant, Catering); as shown above, the modern trade will increase this year and will reach 55% of total turnover, compared with 45% for traditional trade, while last year the ratio stood at 54% for large retailers and 46% for those in the traditional trade; since entering the Romanian market large chains have invested amounts which are at the level of billions of euros; recent years have seen a trend of FMCG retailers entering the settlements increasingly smaller, and some AMRCR members even took the initiative to open stores in rural areas; among major retailers, Kaufland (23.68%), Carrefour (13.5%) and Metro (13.29%) have the highest share in the above mentioned AMRCR members’ turnover. Combining the information regarding the AMRCR aggregate turnover of 9.06 billion euros last year with the one referring to the fact that the modern retail arrived in 2014 to hold a share of 54% of the market value, this means that FMCG total market value is about 16.36 billion euros (in AMRCR data are not taken into account Lidl network sales). (Progresiv, 2015) As shown above, according to preliminary information, the share of modern retail will increase to 55% in 2015. Let us also note that in terms of geographical dispersion on the national FMCG market in Bucharest are a third of the approximately 1,600 modern shops, Bucharest being the only city in Romania which managed to attract all international trade networks present in our country, while the counties with the highest presence of these large networks are Ilfov, Brasov, Cluj and Timis. The above mentioned white book also contains information and analysis that determines the potential impact of legislative changes on the agenda of the Government, such as the one on the closing hypermarkets on Sunday or the other one obliging retailers as a share of Romanian products in the categories meat and fresh fruit and vegetables be at least 51%. On the other hand, according to IKA Romania (IKA, 2015) – RetailerAnalysis, (IKA.Progressive Magazine, 2015), the total current number of shops (1,717 international retail chains stores) per channel type in November 2015 was as follows: Cash&Carry – 54; Discount Store – 366 (356 in March); Hypermarket – 182 (177 in March); Proximity Store – 606 (504 in March); Specialized Store – 80 (72 in March); Supermarket – 407 (377 in March); Rural Store – 22. Compared to the number of international retail chains stores in 2014 (1,353 as mentioned above), in November 2015 they increased with 364.


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Instead of a Conclusion In Spring this year we ended our article with this final comment: … “the Romanian retail market will also be an interesting “battlefield” in what concerns competing in offering customers consistent experiences whether they interact with a brand in-store, online or via mobile, by delivering them content fast and seamlessly across all these channels, while also not forgetting that the foundation of retailing is understanding what customers want and need, and consequently developing a deep understanding of the decision journey that the new shoppers undertake.” Allow us to add now two comments: ▪ according to the Country Report “Mobile Phones in Romania”, December 2015, (Euromonitor) smartphones (regarded as highly fashionable consumer electronics products; consumers are set to become more preoccupied with the features and technological qualities of their smartphones) increased this year in volume by 23%, reaching 1.4 million units (expected rising in 2020: 3.7 million units); ▪ we fully agree with the opinions (PSFK, 2015) expressed in Spring this year on making mobile part of the in-store experience: the blur between online and offline is the new normal for consumers; phones and wearable devices offer opportunities for stores to experiment and innovate; optimizing the in-store experience will be key to better serving customers; there are indeed compelling examples of how retailers and brands are integrating mobile in-store. References PURCAREA, Theodor (2015). Road Map for the Store of the Future, World Premiere, May 4, 2015, at SHOP 2015, Expo Milano 2015, Romanian Distribution Committee Magazine, Volume 6, Issue 2, pp. 36-45 PURCAREA, Theodor - 2015 SCM4ECR on-line Conference, 30 Oct 2015, retrieved from:, 12/19/2015 PURCAREA, Theodor - An inspired message from Riccardo Garosci: “Hunger of Self-Pride: Before and after EXPO”, 08 Nov 2015, retrieved from:, 12/19/2015 PURCAREA, Theodor - John L. Stanton, Hall of Fame of the European Retail Academy, 02 Dec 2015 , retrieved from:, 12/19/2015 PURCAREA, Theodor - Professor John L. Stanton, a “Charming gardener who makes our souls blossom”, 01 Aug 2015, retrieved from:, 12/19/2015 JOGIA, Rakhee - Wearables: What are the customer engagement challenges and opportunities? 14 Oct 2015, retrieved from:, 10/17/2015 Mobile Statistics - 23 days a year spent on your phone, retrieved from:, 12/19/2015 Marketo - Give Your Consumers The Omni-Channel Experience. The Benefits of Delivering a Seamless Customer Journey, retrieved from:, 10/19/2015 LEVI, Andrew - Minding the Gap: How In-Store Mobile Marketing is Reaching Across Generations, November 5, 2015, retrieved from:, 11/9/2015 LALOUX, Jason - How to make the Customer Journey 100% Mobile, Sep 8, 2015, retrieved from:, 10/27/2015 SMITH, Sam - Mobile coupon users to pass 1 billion by 2019, Juniper Research finds, 29th July 2014, retrieved from:, 12/19/2015 MMA - Introduction to mobile coupons, 2007,, 12/19/2015 MMA - MMA - Bridging The Digital & Physical Worlds To Boost Your Marketing Effectiveness, Mobile: The Great Connector - Volume 2, December, 2015, retrieved from:, 12/19/2015 MMA - How Big is the Mobile Marketing Opportunity? September, 2014, retrieved from:, 12/19/2015 JARSKI, Verónica Maria - Ring Up In-Store Sales With Mobile Wallet Offers [Infographic], December 12, 2015, retrieved from:, 12/14/2015 Conferinţa MEDIAFAX – AMRCR a lansat Cartea Albă a Marilor Reţele Comerciale din România, în premieră, published by AMRCR on October 14, 2015, Source: Mediafax, retrieved from:, 12/18/2015 Tanase, M. - Retailul independent a pierdut 4 500 de magazine, Progresiv, 16 Jan 2015, magazinulprogresiv.ro_-_retailul_independent_a_pierdut_4.500_de_magazine_-_2015-01-29.pdf Progresiv - Ce cote de piață dețin primii trei retaileri alimentari, 13 Oct 2015, retrieved from:, 10/22/2015 IKA.Progressive Magazine, December 2015, retrieved from:, 12/19/2015 Euromonitor - Country Report, Mobile Phones in Romania, Dec 2015, retrieved from:, 12/19/2015 PSFK in partnership with Braintree - Six Retailers Doing the Most to Make Mobile Part of the In-Store Experience, 9 April 2015, retrieved from:, 12/19/2015

Léon F. WEGNEZ (by courtesy of)

“A Shopper Marketing that Captivates and Move Shopper to Loyal Customer” Sharing with our distinguished Readers a well-known source of usable and useful knowledge… Prof. Dr. h. c. Léon F. WEGNEZ is an Honorary Member of the Romanian Distribution Committee, and distinguished Member of the Editorial Board of our “Romanian Distribution Committee Magazine“. The distinguished Léon F. Wegnez was honored by the European Retail Academy (ERA) as the 2015 “Man of the Year” (the distinguished personalities who have been honored by ERA in the last four years were: Romano Prodi, Klaus Toepfer, Robert Aumann, and Mikhail Fedorov). Knowing our distinguished readers’ thirst for knowledge, we offer you, by courtesy of this remarkable personality, his article entitled “A Shopper Marketing that Captivates and Move Shopper to Loyal Customer”, and published in the prestigious “Distribution d’aujourd’hui”, 56ème année, Juillet -Août 2015, Brussels.


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Romanian Distribution Committee Magazine / December 2015 /

Vasile STĂNESCU: Our world has entered a new temporality

Vasile STĂNESCU: Our world has entered a new temporality Theodor Purcărea


Abstract We continue to share the respect for those who prove passion in serving and promoting a real culture of excellence, being accomplished mentors to model the path to excellence, demonstrating and inspiring, awakening our own expectations. While the fragility and vulnerability of our planet’s projection are in ambivalence, contemporary science is moving in a greater extent to a new approach to knowledge. Keywords: Path to excellence, new approach to knowledge, human spirit JEL Classification: A14; Y30


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Entering into resonance with the history, the world, the universe or an idea In June 2009, we had the chance to remind (on the Web page of the Romanian Distribution Committee) a few significant aspects about Nicholas Georgescu-Roegen, who left us this meaningful message: “We must come to realize that an important prerequisite for a better life is a substantial amount of time spent in an intelligent manner”. To the “hourglass flowing relentlessly”, to the attempt of living “beautifully and usefully” – as well as to the fact that “we became mentally dependent on the market model, applying its laws on the human and social relations as well” – referred, among others, on 15 April 2015 (at the Scientists’ House of the Romanian Academy) the venerable Professor Vasile Stănescu, Honorary Member of the Romanian Academy. It is worth to mention that the Romanian Distribution Committee awarded the Diploma of Honorary Member to the venerable Professor Vasile Stănescu, for his tireless work to constantly promote a platform for an academic and civic dialog structured for a common understanding walking on the path towards freedom, reconfirming his indubitable conviction that the therapist is within us, in our world’s capacity to find again its sense, capacity to create and build, to love and dream. The venerable Professor Vasile Stănescu, Honorary Member of the Romanian Academy, confessed to the distinguished audience that: “Life is… a continuous oscillation between arrival and departure, between light and shadow … Years go by, memories stay in the dusty album we browse in the moments of escape from an unfriendly present…” In His opinion, life is measured in deeds, no matter who you are taken for, but how you are in reality, what you leave behind as spiritual or material value, trying to live beautifully and usefully, to be happy, to suffer and forgive, but also to dream, to dialogue with the stars and cry, entering into resonance with the history, the world, the universe or an idea.

His Excellency also confessed that: “I never had time for conflicts, avoiding visceral adversities, preferring those of opinion, dialogue. I acquired the reflection according to which knowing to listen is important… when you speak you must have something to tell… I want to hear the silence of things (Emil Cioran) and the music of spheres (Pitagora), because when you stop believing, in fact, you stop existing, you stop living history.”

Themes of meditation and reflection Arrived at the end of a rich life experience - but rejoicing that he still has programs and is dominated by curiosity, wonder and doubt – Professor Vasile Stănescu, Honorary Member of the Romanian Academy, has no time to get bored, watching the show of life (and continuing effort to understand the Self), learning about findings that do not give him peace and that he shares, “stating them only as themes of meditation and reflection”: “we are the expression of our thoughts, as well as the perception we have of the world and of our own construction; Our world has entered a new temporality ...; multiple levels of reality we live in ...; we are projected by events… waking up captives, in a continuous tension…; Today’s world does not yet exercise common destiny of human beings wherever they are, of solidarity and empathy ...; Contemporary science is moving in a greater extent, to a new approach to knowledge ... to a new methodology; Progress got so far… How could poets sing the cyborg – human being? What will replace retrieving Self, charm of reading, meditation, melancholia, dreaming? …; in these times of wanderings, crushed by the huge civilization machine, the emphasis is on the utility values of civilization at the expense of cultural and moral values, as well as patterns. Human beings are dehumanized, there are major imbalances ... The competition took a dramatic end, the fight being carried out between values and interests; ... Coupling intelligence and good taste, its feelings…with the general laws of the market… laws that induce exacerbated selfishness, not only in action but also in thought, individual and collective mind is saddening for the human being; we easily say goodbye to the past, replacing admiration and respect with the show, with rhetoric and self-sufficiency, if not ironic or higher depreciation ... We live in an ambivalence incapable of solving the idea of continuity…; Endangered is the factor of cohesion and mobilization of society: patriotism, national interests; the fragility and vulnerability of our planet’s projection are in an ambivalence that give us cold chills: stability vs. instability, peace - war, creation - destruction, progress - catastrophe, moral - immoral, empathy - indifference order – chaos; socialization - exacerbated individualism, freedom - dictatorship.” Finally, Pofessor Vasile Stănescu thanked the Romanian Academy, participating personalities, colleagues and friends who have turned the anniversary into a “spiritual celebration, of superior excitement, in idea and spirit, in feelings and empathy” also confessing boundless gratitude to the distinguished Lady Yvonne Stănescu: “Finally, in fact firstly, I would like to thank my wife who has accompanied me on my 44

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trajectory for 62 years, with her unfailing love, generosity, selflessness and understanding, I owe her respect, appreciation and all my gratitude. It represents for me a victory of the human spirit, deep soul, and unlimited availability.”

Instead of conclusions Professor Vasile Stănescu has also confessed that: “The legacy that I try to leave, as I took it from my good parents - a hot tear in their memory - is in the spirit of family, love, warmth, light, beauty and joy of emotions, in the roots, alkane myths and old traditions in which I was born and which have accompanied my childhood and adolescence, the nest where I learned about moderation, devotion, decency and rigors of labor, moral, educational and religious virtues, idyllic, mythological image, archetype. All this invaluable spiritual wealth - which is family - is the certainty, the duration, the way to breathe together, the meaning of life.” And as promised on another occasion Professor Vasile Stănescu recalled that: “... I understand to leave active life only with the abolition of taxes.” Indeed, as the venerable Professor Vasile Stănescu, Honorary Member of the Romanian Academy, underlined on another occasion, (Stănescu, 2014) we cannot look towards the future without preserving, honoring and valuing the memory of the past, as the only way for continuation, and there is a need for strategies and policies in all fields of activity, of a high professionalism and profound morality, of the restoration of the axiological scale, of models and reconsidering values. References Stănescu, V. - Path towards freedom. From sensory knowledge to trans-knowledge, Universul Juridic Publishing Press, Bucharest, 2014, pp. 329-331, 340

“Asia Fast Forward” and “Asia Pacific Awards”, Postharvest Research, Climate

Summit Paris, and ERA “Hall of Fame” 2016 Bernd HALLIER

Theodor Purcarea and Bernd Hallier, Paris, November 1999, Intercontinental Hotel, AIDA Conference

Prof. Dr. Bernd Hallier, an Honorary Member of the Romanian Distribution Committee, and distinguished Member of the Editorial Board of “Romanian Distribution Committee Magazine”, attracted our attention on great events happening in November and December this year, and allowed us to present them.


Romanian Distribution Committee Magazine / December 2015 /

“Asia Fast Forward” and “Asia Pacific Awards” Prof. Dr. Bernd Hallier, President of the European Retail Academy informed us that the bi-annual APRCE Congress and Exhibition was hosted in 2015 by the Phillippines. The opening ceremony in Manila was honored by a speech of H.E. Benigno S. Aquino III, President of the Republic and by greetings of the FAPRA President Mehmet Nane/Turkey and the President of the Philippine Retail Association Lorenzo C. Formoso. On the occasion of the exhibition, Andrew Yeo, the founder of the “Retail Asia” magazine and Professor Bernd Hallier, President of the European Retail Academy, promoted together their books “True Grit” and “From Crisis to Competence” and “Food Waste Management”.

European Retail Academy also let us know that the “Retail Asia” magazine analyzed with its partners the statistics of the Top 500 retailers in 14 key markets. The Gold Awards for each country were given to: Australia/Westfarmers, China/China Resource Enterprise, Hong Kong/AS Watson, India/Future Value Retail, Indonesia/Indomarco Prismatama, Japan/AEON, Malaysia/GCH Retail, New Zealand/ Foodstuffs, Philippines/ SM Retail, Singapore/NTUC Fair Price, South Korea/Lotte, Taiwan/President Chain Store Corp., Thailand/CP-All and Vietnam/Saigon COOP. 26 of the top-players had accepted further questionnaires to analyze their business strategies, their IT or HR-Resources or their Corporate Social Responsibilty . An international Jury (including of course Prof. Dr. Bernd Hallier) voted for the Best-of-the Best: Gold - The Good Guys/Australia, Silver- China Resources Enterprise/China and Bronze - Mercury Drug Corp./Philippines. The Awards Ceremony and Gala Dinner was held at the Solaire Resort & Casino in Manila/Philippines.

Postharvest Research On November 30, 2015, the European Retail Academy became partner of the World Food Preservation Center, which among others is promoting postharvest research and knowledge penetration (curriculum/text books/exchanges of scientists). ERA will report quarterly about the activities of the WFPC at A new step is also the idea to place a Crowd Funding Campaigne as a means of educating the public on the critical need to save food (see also B.Hallier et alia: FoodWasteManagement) and to invest more into young postharvest scientists. More via ! Climate Summit Paris On December 10, 2015, European Retail Academy also let us know that there is no doubt that the 2015 United Nations Climate Change Conference (COP 21 or CMP 11, Le Bourget, Paris, November 30 to December 11) will mark a major turning point. ERA showed that: in Western and Central Europe there is in politics at the moment the hot discussion about migration, mostly unfortunately only discussed being short-sighted aspects; and now, the Climate Conference in Paris gives a longer scope to understand the changes of the world. Also the permanent push of the European Retail Academy for a Global House of Harmony between Economics, Ecology and Ethics goes into that direction as well as its platform Global Green University (Link).


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One of the pioneers to understand this new mix out of economics, ecology and ethics is the 90 year old Honorary Chairman of Japan’s retail-conglomerate AEON, Takaya Okada-san (at the photo together with Prof. Dr. Hallier). He is a co-founder of the Federation of AsiaPacific Retailers Association, a great environmentalist having planted more than 10 million trees in Asia and the sponsor of a Foundation of Youth Development. ERA “Hall of Fame” 2016 On December 20, 2015, Prof. Dr. B. Hallier appointed for the Hall of Fame for 2016 Prof. Dr. John L. Stanton, USA. It is well-known that John Stanton has longstanding experience in the field of Food Marketing as well in the retail industry as also as an academic teacher. And last but not least he is a “bridge-builder” between continents.


ERA remebered within this context that in March 16, 2010 it was reported about joint seminars of Prof. Stanton and Prof. Hallier at the St. Joseph’s University in Philadelphia/USA - including also the knowledgepenetration of the EHI-food companies Orgainvent and Globalgap. Acording to ERA-President Hallier: “The appointment of John Stanton for the Hall of Fame underlines the strong desire of ERA to push the idea of Food Security as a basic idea within a Global House of Harmony between Economics, Ecology and Ethics”.

A short presentation of our partner journal „Contemporary Economics”, Vol. 8, Issue 1, 2014, Quarterly of University of Finance and Management in Warsaw Irina PURCĂREA

JEL Classification: Y30

“Contemporary Economics” is an academic quarterly addressed to academicians, economic policymakers as well as to students of finance, accounting, management and economics. In particular, the quarterly contains academic manuscripts on problems of contemporary economics, finance, banking, accounting and management examined from various research perspectives.


Romanian Distribution Committee Magazine / December 2015 /

The first paper of this 2015 issue, entitled „An introduction to alternative experimental models in monitoring economic failures� (Mario Arturo Ruiz Estrada, Muhamad Tahir), presents four alternative experimental models in monitoring economic failures, the main objective being to analyze different macroeconomic scenarios in monitoring and warning. The authors suggest the application of three new concepts in the study of economic failures, also arguing that their findings would certainly help both policy makers and researchers to implement and execute appropriates policies to develop their economies and to protect them from unwanted situations.

The paper entitled „Gross value added and total factor productivity in Czech sectors” (Tomas Volek, Martina Novotna) addresses the importance of extensive and intensive sources of economic growth in individual sectors, finding out that the development of total factor productivity does not match the growth of gross value added. Other findings revealed differences in the sources of growth in individual sectors.

„Oil price forecasting using crack spread futures and oil exchange traded funds” (Hankyeung Choi, David J. Leatham, Kunlapath Suckharoen) is a paper that examines the link between the crude oil spot and crack spread derivatives markets, finding out a unidirectional relationship from the two crack spread derivatives markets to the crude oil spot market during the post-crisis period. The authors show that: in terms of forecasting performance, the forecasting models based on crack spread futures and the ETF crack spread outperform the Random Walk Model (RWM), both in-sample and out-of-sample; on average, the results suggest that information from the ETF crack spread market contributes more to the forecasting models than information from the crack spread futures market.

Another paper, „ Corruption, Political Instability and Economic Development in the Economic Community of West African States (ECOWAS): Is There a Causal Relationship?” (Nurudeen Abu, Mohd Zaini Abd Karim, Mukhriz Izraf Azman Aziz), examines the causal relationship among corruption, political instability and economic development in the ECOWAS using the Granger causality test within a multivariate co-integration and error-correction framework for the 1996-2012 period. The findings indicate that: political instability Granger-causes economic development in the short term, while political instability and economic development Granger-cause corruption in the long term; positive unidirectional Granger causality from political instability to economic development in the short term and positive unidirectional Granger causality from political instability and economic development to corruption in the long term in ECOWAS countries.

One of the papers included in this issue, „ Negative Impacts of the Neo-liberal Policies on the Banking Sector in Bulgaria” (Rossitsa Rangelova Pavlova, Grigor Sariiski), studies the reforms in the Bulgarian banking sector during the transition period, analyzing the development of the banking sector and its transformation. The paper summarizes that during the transition period, a modern banking system was established to accumulate profit rather than to promote economic growth. Then the negative effects of the liberalization of the Bulgarian banking sector are specified.

The paper „ Fiscal Austerity Versus Growth in Croatia” (Marinko Skare, Romina Prziklas Druzeta) investigates the role of austerity versus the role of economic growth, also attempting to highlight the role of the theoretical context of austerity policy and the economic history lesson learned during the transition from the Bretton Woods model to Washington’s consensus. The authors argue that: no consensus on the implementation of fiscal austerity has been achieved because this complex subject has not been the subject of a sufficient methodological exploration: emphasis should be placed on defining the methodology 52

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of austerity and gathering statistical data to influence the implementation of social transfer policies; is necessary not only to take a hybrid approach to fiscal and monetary policy but also to adopt economic laws and quantitative economic relationships..

The final paper of this issue of “Contemporary Economics”, entitled „ The Impact of Banks and Stock Market Development on Economic Growth in South Africa: an ARDL-bounds Testing Approach” (Sheilla Nyasha, Nicholas M. Odhiambo), examines the impact of both bank- and market-based financial development on economic growth in South Africa during the period from 1980 to 2012, employing meansremoved average to construct both bank- and market-based financial development indices. The authors use the newly developed autoregressive distributed lag (ARDL) bounds testing approach to examine this linkage, the findings showing that: there is a positive relationship between bank-based financial development and economic growth in South Africa; the failure of finding any relationship between marketbased financial development and economic growth in South Africa; a pivotal role in propelling South Africa’s real sector it is played by the bank-based financial development rather than market-based financial development.


Romanian Distribution Committee Magazine / December 2015 /

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