Romanian Distribution Committe Magazine Volume 7 Issue 2

EDITORIAL BOARD

Romanian Distribution Committee Magazine

Volume: 7 Issue: 2 Year: 2016 Scientific Review of the Romanian Distribution Committee

2

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

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

YOUNG EDITORIAL BOARD MEMBERS REVIEWERS

SCIENTIFIC COUNCIL

4

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

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

Hello, reader.

Our Readers are invited to submit articles for the 2016 (3&4) Issues of the Scientific Review of the Romanian Distribution Committee – „Romanian Distribution Committee Magazine”.

http://www.distribution-magazine.eu/submission

You can find out more about us just by clicking http://www.distribution-magazine.eu/about

Romanian Distribution Committee Magazine Volume: 7 Issue: 2 Year: 2016

The responsibility for the content of the scientific and the authenticity of the published materials and opinions expressed rests with the author.

6

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

CONTENTS

Editorial: Understanding what is Expected, Prioritizing Activities, Delivering on the Promise, and Adapting to the Future by Reskilling Theodor Valentin PURCĂREA

Information and Communications Technologies Go Greener Beyond IOT - Behind is All the Earth, Part 1 Victor GREU

The Future of Marketing in 2016: Trends in the New Digital Age

George Cosmin TĂNASE

The Challenge of a Truly Omni Channel Approach for Retailers Theodor PURCĂREA

(by courtesy of) - “Ethics and Sustainable Development” and published in the prestigious “Distribution d’aujourd’hui”, 57ème année, Février 2016, Brussels Léon F. WEGNEZ

Top 10 Retailers on the Romanian Market by Net Turnover 2015

George Cosmin TĂNASE

(by courtesy of) - Challenges of Food Waste Management, SPAR Wholesale, European Training Foundation, CORP Hamburg, EU-Project FUSIONS, New CIRCLE Initiative, Urban Soul, Cool Chain/Handbook, Best Department Store of the World/IGDS Bernd HALLIER

A Short Presentation of our Partner Journal „Contemporary Economics”, Vol. 10, Issue 2, 2016, Quarterly of University of Finance and Management in Warsaw Irina PURCĂREA

EDITORIAL: UNDERSTANDING WHAT IS EXPECTED, PRIORITIZING ACTIVITIES, DELIVERING ON THE PROMISE, AND ADAPTING TO THE FUTURE BY RESKILLING

At the beginning of this year, SmartStorming Partners Mitchell Rigie and Keith Harmeyer communicated to us, via e-mail, that an excellent starting point for building an innovative thinking foundation is understanding and nurturing the seven key traits of “Innovative Thinking Superstars”: Curiosity; Imagination; Intuition; Inventiveness; Playfulness; Flexibility; Persistence. In the same month, the Director of Consulting at Stellar EVOLVE, specialized in defining next generation customer management strategies across the customer lifecycle, argued that simplicity is the new black for customer experience professionals, (Bhattacharyya, 2016) and summarized his thoughts in four laws: the opposite of simplicity is not complexity but confusion; the path to simplicity is through complexity; complexity is never eliminated but can only be reduced or concealed; simplicity is achieved by finding the right balance between usability and usefulness. He concluded that in the words of his idol – Albert Einstein – “Things must be made as simple as possible - but never simpler”.

Dealing with the insane pace of change, and considering a shift to a more “customer centric” strategy 8

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

We all know that the ever-difficult task of “keeping it simple” was considered (Project Management Institute, 2011) one of the so-called (by Tom Peters) “obvious ideas” (now considered “standard operating procedure” in businesses around the world) reemphasized in the 1982 bestseller “In Search of Excellence” (by the authors Tom Peters and Bob Waterman). In an interview for McKinsey Quarterly, September 2014, Tom Peters showed, among others, that to deal with the insane pace of change involves living to get smarter and to learn new things, going up the value-added chain beyond the kinds of tasks and roles that can be automated. He ended by recommending embracing the new technology with youthful joy and glee.

Customers know what outcomes they want, and that innovation is what brings new value to them, what significantly improves a main parameter of customer value, businesses being continuously challenged to measure customer value the customer’s way. (Hunsaker, 2015) And if customers’ experience means all interactions they have with or about a solution, the secret to customer experience excellence is value, (clearactioncx.com) customers buying capabilities to do something via solutions that have been offered (known as the customer’s “job-to-be-done”), while customer experience innovation creates mutual value within the experience with a solution.

Customer value (customer value attribute tree) means benefits (product, service, image, emotional and psychological factors, people, convenience, relationship, association, information, retailer, availability of the product, non-price terms etc.) plus cost (price, non-price), customer experience being built into each of the above mentioned items (each item having a relative importance coming from market research with customers through statistical analysis), while customer perception is understand influenced by a variety of factors, such as experience, emotions, increasing number of users of the same product etc. A customer can also be understood by building a customer’s waterfall of needs (a customer journey: need, prospecting, shopping, buying, post purchase, use, after use), and take the attributes from this. The key to what value a business needs to be selling is the relative importance of these many factors or attributes in buying to the customer. (Mahajan, 2016) The President of Customer Value Foundation (the leading global leader in Customer Value Management) argues further that in order to move ahead, it must also get the customer’s perception on whether the business is creating less or more value on each of the attributes, this being called “Customer Value Added” (defined as customer’s perceived rating or score of the value a company delivers divided by the perceived rating or score competition gets on the value they deliver to their customer). He recommends: to measure the Customer Value Added score (a comparative one), to conduct a Customer Value Added study, identifying the differences between a value study and a satisfaction study or a transaction study, and to do it yourself. (Mahajan, 2016) There is no doubt that the entire relationship between companies and their customers has changed in our challenging hyper connected world, businesses considering a shift to a more “customer centric” strategy so as to effectively deliver a great customer experience, company’s experience strategy ultimately becoming company’s business strategy. (Hinshaw, 2016) What also presupposes re-thinking company’s basic organizational structure, and better empathizing with and serving company’s customers by using tools such as customer listening and personas, analyzing and taking action on customer feedback, monitoring how well company is doing at delivering the experiences its customers actually want, knowing exactly what the company is trying to deliver to its customers.

Let us be innovative thinkers and to break the organizational walls and instill more collaborative mind-sets by using the social technologies (paying attention to the new sensitivities raised by them), better interacting with customers, and networking with company’s employees and outside stakeholders, co-creating and sharing the organization’s mission and vision, and tapping new sources of creativity. (Harrysson, Schoder, and Tavakoli, 2016) McKinsey’s representatives also recommend the reliance on the practices that contribute to accountability (defined as the ability of people to understand what is expected of them, exercise authority, and take responsibility for delivering results), such as: managing performance contracts, role clarity (clear organizational structures), personal ownership (a culture of personal responsibility), and consequence management. (Bazigos, Ellsworth, and Goldstein, 2016) We are all customers and citizens looking at meaningful change that reflects our needs and wants We are all customers (seeking to fulfill our individual interests through private decisions and expressing our dissatisfaction passively) and citizens (seeking to fulfill our community interests through public participation and decision-making and expressing our dissatisfaction through public voice).

(Nalbandian, 1997) Many of today’s most sophisticated business techniques and enabling technologies used by businesses to better understand and respond to the needs of their customers are already beginning to be

used by government offices around the world in order to help make more successful policies and smarter decisions (by rethinking information management, engaging citizens and using data they already have) on the public’s behalf. (Pitney Bowes, 2015) A recent talk between McKinsey’s representatives (Corydon, Grant, Lin, Ma Zecha, 2016) approached the new skills governments around the world must develop in order to bring meaningful change that reflects the needs and wants of their citizens. There is clear evidence that governments are facing better setting priorities amid swift technological change, budget constraints, and the need to adopt more transformational mind-sets, taking into account that: citizens expectations are driven by the private sector, for example by citizen digital experience with a bank, by citizen experience with his mobile-phone provider or his pay-tv provider; world-class consumer companies are looking at the value of a customer over a lifetime (the value of that customer journey, that customer experience, over the whole time of the relationship). Singapore is a very interesting case from the viewpoint of thinking about what a strategy is for the country to be competitive in the future, this year two very large programs being undergoing: the “Committee on the Future Economy” (reevaluating the entire structure of the economy, in order to set Singapore up for the next 50 years); the “SkillsFuture” program (ensuring that every single Singapore citizen age 25 and over has a SkillsFuture account, putting money every year in order to be used toward reskilling an individual for the rest of his or her life).

Indeed, now “it’s time to explore tools to crowdsource a rich fact base of performance observations”.

(Bazigos, Ellsworth, and Goldstein, 2016) At least because as we argued in another editorial some time ago: “We observe that yes we do change, we change consuming (knowledge, news, words, food etc.), and changing the subject of life conversation, speaking about another crisis, another recession, another global food crisis, about the confidence crisis, about preparing to face the hunger… of justifiable choices. What does being rich mean to us? How rich together are we today?”

Theodor Valentin PURCĂREA Editor – in – Chief

References

Bazigos, M., Ellsworth, D. and Goldstein, D. - Where accountability really matters, McKinsey Quarterly April 2016, retrieved on 12.04.2016, from: http://www.mckinsey.com/industries/travel-transport-and-logistics/our-insights/Where-accountability-really-matters?cid=other-eml-alt-mkq-mck-oth-1604 Bhattacharyya, A. - Simplicity ≠ Simplistic, Jan 13, 2016, retrieved on25.01.2016, from: http://customerthink.com/simplicity-≠-simplistic/?

Corydon, B., Grant, A. and Lin, D-Y. talk with Ma Zecha., C. - Making government for the people, McKinsey Podcast June 2016, retrieved on 08.06.2016, from: http://www.mckinsey.com/industries/public-sector/our-insights/making-government-for-the-people?cid=podcast-eml-alt-mip-mck-oth-1606 Ewenstein, B., Hancock, B. and Komm, A. - Ahead of the curve: The future of performance management, McKinsey Quarterly May 2016, retrieved on 17.05.2016, from: http://www.mckinsey.com/business-functions/organization/our-insights/ahead-of-the-curvethe-future-of-performance-management Hinshaw, M. - Implications of a Customer-Centric Strategy: 7 Takeaways, May 18, 2016, retrieved on 25.05.2016, from: http://customerthink.com/implications-of-a-customer-centric-strategy-7-takeaways/ Harrysson, M., Schoder, D. and Tavakoli, A. - The evolution of social technologies, McKinsey Quarterly June 2016, retrieved on 29.06.2016, from: http://www.mckinsey.com/industries/high-tech/our-insights/the-evolution-of-social-technologies?cid=digistrat-eml-alt-mkq-mck-oth-1606 Hunsaker, L. - Measure Customer Value the Customer’s Way, May 3, 2015, retrieved on 04.06.2016, from: https://clearactioncx.com/measure-customer-value/ Mahajan, G. - Components of Customer Value: How to Build a Waterfall of Needs and Attribute Trees, retrieved on 15.02.2016, from: http://customerthink.com/components-of-customer-value-how-to-build-a-waterfall-of-needs-and-attribute-trees/?

Mahajan, G. - Measuring Value (Customer Value Added), Apr 16, 2016, retrieved on 29.04.2016, from: http://customerthink.com/measuring-value-customer-value-added/?

Nalbandian, J. - Notes for Greater KCASPA Chapter Workshop on Customers and Citizens, November 7, 1997, retrieved on 09.06.2016, from: http://people.ku.edu/~nalband/kcaspa.htm *** http://smartstorming.com/about-us *** http://www.stellarevolve.com.au/about-us/ *** https://www.pmi.org/Get-Involved/LIM/LIM_NA/Keynote-Speaker-Tom-Peters.aspx *** http://www.mckinsey.com/business-functions/organization/our-insights/tom-peters-on-leading-the-21st-century-organization *** https://clearactioncx.com/customer-experience-innovation-creates-mutual-value/ *** When the customers are citizens. How a new focus on building relationships is helping government agencies improve citizen engagement and satisfaction, A Pitney Bowes white paper, 2015, https://www.pitneybowes.com/content/dam/pitneybowes/australia/ en/locationIntelligence/white-papers/15_DCS_05203_When%20Customers%20Are%20Citizens_White%20Paper_ANZ_WEB.pdf

10

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

Abstract INFORMATION AND COMMUNICATIONS TECHNOLOGIES GO GREENER BEYOND IOT- BEHIND IS ALL THE EARTH -PART 1Victor GREU

The paper is approaching the systemic analysis of the context of Information and Communications Technologies (ICT) exponential evolution, as driving power of the transformation of the Information society (IS) toward Knowledge Based Society (KBS), foccusing on a smart management of ICT/IS/KBS evolution, where the essential is to deeply analyze, update the solutions, refine knowledge and responsibly react to challenges/implications, in order to correct the negative consequences of such complex and mass processes at Earth scale.

The analysis approached the actual point of ICT development, dominated by Cloud Computing, Big Data and Internet of Things (IoT), starting from the premises created by “COPs21” Paris Conference context including ICT latest figures on carbon footprint and IoT emergent expansion – which show that Internet traffic is increasing with 40% / year, which would lead, without corrections, as ICT could consume in 10 years 60 percent of the Earth’s energy production.

The author opinion is that the actual “machine” trend, focussed on striving for performance, must be balanced by a greener approach aiming power efficiency and carbon footprint reduction, including a concrete approach based on relevant issues as: Identifying incertitude/risk complex and complicated mechanisms, generated by the exponential

12

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

speed of ICT development in IS/KBS and generally on Earth ecosystem; Developing greener ICT capable to induce greener solutions in all fields of activity; Designing new integrated models, algorithms and technologies for information analysis to cope with all consequences of IoT, Cloud computing, Big Data.

The paper main conclusions include the priority to fight the main difficulties generated by the extreme speed of changes induced by ICT exponential pace of development, which create such complex consequences but does not allow humankind the necessary time to real time react, with the immediate approach of this “impossible” mission as being twofold: rethink and adapt (slow) the ICT pace and on the other hand create the instruments to help us find the balance between the designed ICT pace and the capacity to cope with it!

Keywords:

Green communications and information technologies, carbon footprint, Internet of things, Big Data, climate changes, information society, knowledge based society, innovation.

JEL Classification: L63; L86; M15; O13; O31; O33

1. Wherever ICT are going beyond IoT, the “road” must be greener and smarter than “machine” Always people have tried to predict the future, like, for example, Nostradamus did, but naturally this is not an easy or clear issue.

Still, the human nature is pushing us to analyze and estimate the evolution of processes, but this approach becomes a responsibility when the technologies give us performant (sometimes never imagined) instruments and on the other hand the complexity of processes and their changes are increasing with the actual unprecedented pace.

As we have already presented [5], this complexity is generated by the context of Information and Communications Technologies (ICT) exponential evolution, which is the driving power of the evolution of the Information society (IS) toward Knowledge Based Society (KBS).

Coming back to our responsibility, this is also increasing as we are facing a spectacular transformation of the humankind life and generally dramatic changes of the Earth environment, where climate changes are only the most important consequences among other, including Earth resources fading. On this line, we expressed the dual image of humankind and Earth as apogee or decline [8].

For the accurate actual picture of ICT in IS/KBS, we also analyzed [3] the importance and the complicate challenges of the emergent expansion of IoT at Earth scale, but the dynamic of such huge processes, starting from the above mentioned context, needs step by step analyses and estimations.

Now we have just arrived to the point of necessity to estimate the evolution of these processes and their most important consequences, either good or bad.

Still, we have to mention that the main goal of this paper is not to predict, but to analyze some actual trends and challenges of ICT along with the corresponding efficient corrections solutions.

In fact, our opinion, considering the above issues, is that specialists have the responsibility to carefully and continuously evaluate all the consequences of ICT/IS development, in spite of the amazing speed of changes, but specially to find, in real time, the appropriate solutions to correct the negative implications of such complex and mass processes at Earth scale.

In simpler words, we called this approach a smart management of ICT/IS/KBS evolution, where the essential is to deeply analyze, update the solutions, refine knowledge and responsibly react to challenges/implications [11].

We consider that this “open design” approach could be actually expressed as“the best way to predict the future is to ... design it”- paying tribute to the brilliant quote of the prominent American computer scientist Alan Curtis Kay: “The best way to predict the future is to invent it” Applying these conclusions to the actual point of ICT development, dominated by Cloud Computing, Big Data and ... Internet of Things (IoT), it is quite normally to try to use the available performance level of technology in order to transform “prediction” in “design”, this way timely reducing the costs/consequences.

Perhaps the next question to be answered is: What Cloud Computing, Big Data and IoT have in common?

Apparently the answer is simple, as these 3 main “technologies” represent a huge wave of actual ICT systems or applications, with unprecedented proliferation at Earth scale.

We have already analyzed them [3] [16], obviously not exhaustively, but the paper point is to emphasize “the road” where these 3 ICT “peaks” actually are and especially to what extent their complex development processes create consequences to be corrected.

Here we have only to add that the necessity to have a “green ICT” is not a new issue, but the “IoT epoque” demands a “greener ICT road” and ... more!

Although the need for a greener road of ICT is obvious, this is only one of the above mentioned consequences to be faced.

A systemic approach must consider the whole complicate process of IS/KBS [16], but the need for refined knowledge demands to take into account the actual dimension and dynamic of the exponential development of ICT products and sservices, influencing all humankind activities and eventually life on Earth.

The deep significance of the link between ICT “road” and ICT “machine” must be further described, as the necessity of a “smarter” road is not very clear in the above context.

As a matter of fact we intend to further and deeply analyze [3] the complex and complicate processes where the humankind and “the machine” is a metaphor for the actual interaction “man-machine”, which is today too simple called M2M. It is interesting to point that inherently “the machine” is a syntagm with many “faces”, but here we want to notice the actual project of HP Company [12].

Expected this year, “The machine” project is intended to be a prominent step on the ITC computing “road”, as HP Company intends to achieve a revolutionary supercomputer with 2500 cores using MEMRISTORS (the revolutionary technology for the next generation memory), capable of handling 160 petabytes (i.e. 5 times the Large Hadron Collider generates in one year).

We cited this project just as a symbol of the ICT actual evolution, striving to keep Moore’s Law and provide energy-efficient memory.

Consequently, we have used this actual symbol in order to suggest that in fact the designers of the ICT must conceive a new “road”(approach) which must be “greener” and “smarter” than the actual trend of thinking (machine like!), where the machines take, step by step, the place of human, including “intelligent” activities (like design!).

Here our essential opinion is that, when conceiving new ICT, the actual “machine” trend, focussed on striving for performance, must be balanced by a greener approach aiming power effiency and carbon footprint reduction.

Well, someone could ask: And what is the news?

The answer pillar is the two-fold we will further present: “COPs21” Paris Conference context including ICT latest figures on carbon footprint and IoT ... aisberg!

It is possible that COPs21 to become an historical milestone [1], as, “under the frame of theUnited Nations Framework Convention on Climate Change (UNFCCC) and the Conferences of the Parties (COPs), ... after solid and united global efforts, from 30 November to 12 December 2015, COP 21 was held in Paris, France, when, in a historical breakthrough and milestone toward securing the future Earth, a global agreement on the reduction of climate change was agreed upon by representatives of more than 193 countries in attendance. According to the COP21 Organizing Committee, the agreement was to limit global warming to well below 2°C compared to pre-industrial levels...The agreement in COP21 greatly encouraged and promoted green information and communications technologies ... A parallel trend to the newer generation global green revolution is the global challenges in big data issues, and there are

14

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

recent studies discovering the relations between the two trends”.

On the other side [1], in 2014, the IEEE Technical Committee on Green Communications and Computing (TCGCC), later jointly with the IEEE Technical Sub-Committee on Big Data (TSCBD), started an IEEE Access Special Section on Big Data for Green Communications and Computing.

These premises, provided by COPs21 and IEEE, represent, in our opinion, a serious factor for progress of green ICT, considering also the newest figures on ICT carbon footprint.

Recent estimations [4] show that “projections show that by 2020 the global greenhouse gas emissions from ICT will double from today’s 2 percent to 4 percent”

An other point of view [2], is almost “shocking”, as starting from the fact that ICT 2% carbon footprint is the same with the aviation industry case, but(citing Jaafar Elmirghani) “ICT is growing much faster than the aviation industry. Internet traffic is increasing 30 percent to 40 percent each year, Elmirghani points out, adding, “If this rate continues and nothing is done, ICT in 10 years could consume about 60 percent of the world’s energy resources... People are unaware that the carbon footprint of ICT is so large,” says IEEE Senior Member Jaafar Elmirghani (co-chair of the IEEE Green ICT initiative).

Now it is more than clear that a greener ICT is a “zero degree” emergency, but what can be done is not a simple question.

As we concluded above, the essential is to start with a new approach of the ICT design policies and this opinion is confirmed by [4]: “What’s needed is a complete rethinking of how to design, build, and use ICT. That’s the mission of the IEEE Green Information and Communication Technology initiative, launched in January 2015 by the IEEE Future Directions Committee”.

IEEE Communications Society has a leading role in the initiative, because its technical committees have been active in green ICT and it is collaborating withother 16 IEEE societies and with organizations including Bell Labs/ Alcatel-Lucent (now part of Nokia), British Telecom, Ericsson Research, the University of Arizona, the University of Leeds and the University of Melbourne.

An optimistic point of view comes also from Jaafar Elmirghani[4]: “With 40 percent annual traffic growth, if we are able to improve the energy efficiencyof today’s networks by a factor of 1,000, then in 20 years they would consume the same amount of energy used today”.

Still, the initiative coordinated by Jaafar Elmirghani[2] proposed some concrete directions toward a greener ITC, as: „Identifying ways to help the telecom industry become more energy efficient.

Promoting uses of ICT that can make other industrial sectors greener, including manufacturing and transportation.

Working with ICT companies to develop standards for green technologies and for assessing the full environmental impact of their technologies during their life cycles”.

Perhaps here is the point our section title is completely explained, as the “road” must be greener and smarter than “machine”, but we have to add the pillar of ... IoT (aisberg).

In the above presented context, the IoT (aisberg) pillar is still simpler to explain, because its Earth scale proliferation, but not only!

To be more concrete, we have to observe that among the mentioned 3 main “technologies” (Cloud Computing, Big Data and IoT) IoT has a prominent position [7][10][13][19][15][14].

First of all and most important, IoT has a dramatic influence on both Big Data and Cloud Computing because as IoT is extending more and more, then more and more amount of data will be produced and ... processed!

We recall[3] that IoT will represent a huge “explosion” in all “directions” [6]: as cows, water pipes, people, and even shoes, trees, and animals become connected to IoT, the world has the potential to become a better place ...With a trillion sensors embedded in the environment—all connected by computing systems, software, and services—it will be possible to hear the heartbeat of the Earth, impacting human interaction with the globe as profoundly as the Internet

has revolutionized communication.”

A realistic picture of the impact over Earth carbon footprint, energy and resources could be estimated if we also recall that not later that in 2020 more than 30-50 billions (estimations varying) of connected (IoT) devices, with over 200 billion with intermittent connections, will be in use [9].

Finally we may now at least have a rough idea about what ICT could produce “beyond” IoT, but what we could expect to be left “behind” on Earth must be further analyzed.

2. Whatever humankind are innovating by ICT, behind every step there is a big “footprint” on Earth Apparently the main idea of the first section, a greener development of ICT, is the essence of what we have to correct when rethinking the design of ICT products and services.

In fact, a stronger greener trend is only the first emergency of “drivers” on the ICT “philosophy” road.

For an accurate evaluation of the main factors influencing ICT and IS toward KBS we have repeatedly analyzed them [5][8], but a refined update is necessary, especially in the above presented complex context and emergency.

When we above have mentioned refined knowledge processes, it was the main idea of a more complex approach we already have presented [16] as mechanism of optimization of ITC/IS/KBS, but every new iteration must be carefully analyzed and ... refined.

Now we are facing such new iteration, generated by the accumulated challenges/emergencies, where climate changes are the most dramatic.

Optimizing a complex process needs a multi-criteria approach, so in this case we have to also consider Earth resources fading, the social unbalances, humankind life/work changing conditions and so on.

Our opinion, also repeatedly presented [3], is that the main source of incertitude and risk, complex and complicated mechanisms, is generated by the exponential speed of ICT development. This opinion is largely confirmed [4][21][17][18], as “annual growth in traffic doubles every two years”.

The dramatic pace of changes ICT induce to all fields of activity in IS/KBS could determine unpredictable, or at least impossible to completely control, consequences for humankind life and Earth ecosystem.

The complexity and difficulty of the mentioned optimization, for the considered actual epoque of IoT, is well reflected and confirm our approach, if starting from [6] analysis: “Individual data by itself is not very useful, but volumes of it can identify trends and patterns. This and other sources of information come together to form knowledge. In the simplest sense, knowledge is information of which someone is aware. Wisdom is then born from knowledge plus experience. While knowledge changes over time, wisdom is timeless, and it all begins with the acquisition of data. It is also important to note there is a direct correlation between the input (data) and output (wisdom). The more data that is created, the more knowledge and wisdom people can obtain.

IoT dramatically increases the amount of data available for us to process. This, coupled with the Internet’s ability to communicate this data, will enable people to advance even further”.

Although apparently this opinions could simply mean that [6]“Humans Turn Data into Wisdom”, we want to suggest that behind the optimistic and positive conclusions we must notice 2 messages.

The positive one is that [6] confirms the essential role of knowledge for IS/KBS progress, although, for being realistic, at “Wisdom is then born from knowledge plus experience” we must add refined knowledge in order to accurately reveal the iterative (continuous) feature of the process which could offer updated solutions in ICT/IS/KBS

16

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

dramatically changing processes at Earth scale.

On the other hand, we have to recall (because here is the place to be again partially relevant) the above quote [4] “if we are able to improve the energy efficiencyof today’s networks by a factor of 1,000, then in 20 years they would consume the same amount of energy used today”. Then, remark the same lack of realism when in [6] we must suppose the “hope” that “Individual data by itself is not very useful, but volumes of it can identify trends and patterns. This and other sources of information come together to form knowledge”.

In fact we may consider this second message to be also positive, in part, because it points (unintentionally) where the problem is.

In a more concrete manner we must observe that, unfortunately, for instance it is not clear how to improve the energy efficiency of today’s networks by a factor of 1,000 or how to identify trends and patterns if “Big Data” means that 90% of digital information is generated in the last 2 years (generated data is doubling every 2 years!).

Maybe the real dimension of the problem is more clear if we add other actual largely agreed figures: 90% of actual stored data are unstructurated and the estimation for the amount of generated data in 2020 is of 44 zetta B! About the 90% unstructurated of actual stored data, at recent “Dell (&Intel-Microsoft) Be / Future Ready / ‘16 Bucharest Conference we have raised the issue of evaluating the expectations for technical solutions to reduce a part of 90% unstructurated data, but beyond Business Intelligence commercial packages other performant and Big Data oriented new integrated models, algorithms and instruments are not visible yet.

With such premises we have to emphasize that these are only some aspects of the above mentioned IoT “aisberg”, but the scope is not to enlarge the analysis we already made on IoT issues [3].

We only want to point out that the long, complicate and difficult processes of developing IoT is a milestone for ICT/IS/KBS (called a new phase of Internet, 4-th industrial revolution etc.), where starting with the emergency of “greener ICT” we have to rethink all ICT design processes.Without approaching political issues, this moment of “greener ITC “and IoT building seems to be similar in significance with the recent BREXIT moment for EU strategies.

A concret, but simple approach of actual ITC priority/emergency is also expressed [4] as: “Whatever is designed—whether it’s a communication system, a cloud system, a computer system, or if there’s an electron device, photonic device, or an antenna propagation project-it needs to be done with the environment in mind.”

Of course it is not simple to express what should be a not “simple” approach, but it is clear that the new “road” must be not only “greener”, but generally “smarter”, considering a larger set of criteria for optimization and above all more elaborated ICT development policies, in order to include refined knowledge from new relevant information (data).

Capitalizing the last analysis elements, the set of mentioned main criteria should include, by our opinion, relevant issues as: a. Identifying incertitude/risk complex and complicated mechanisms, generated by the exponential speed of ICT development in IS/KBS and generally on Earth ecosystem; b. Developing greener ICT capable to induce greener solutions in all fields of activity; c. Designing new integrated models, algorithms and technologies for information analysis to cope with all consequences of IoT, Cloud computing, Big Data.

Although the associated order (a, b, c) is not random, the issues are not independent and the list is far to be complete, we only intended to suggest a systemic approach, considering the design and readiness order.

As a matter of fact, our main paper them, “beyond IoT”, is a “cloud” of incertitude (i.e. difficult to predict) we have to “smarter” design, going through the main steps above suggested (a, b, c) - in the succesion of iterations on “road” where every step must be carefully analyzed in advance aiming a minimal of consequences (“behind”) on its “footprint” on Earth.

Obviously, such analysis and evaluation processes are very difficult and complex (see point “a”) and (in a vicious circle) are depending on available instruments (see point “c”), but most of all are dramatically influenced also by humankind capacity and will to wisely ... innovate.

Last, but not least, again and again we have to fight the main difficulties generated by the extreme speed of

changes induced by ICT exponential pace of development, which create such complex consequences but does not allow humankind the necessary time to real time react.

By our opinion, the immediate approach of this “impossible” mission should be twofold: rethink and adapt (slow) the ICT pace and on the other hand create the instruments (see point “c”) to help us find the balance between the designed ICT pace and the capacity to cope with it!

These premises and ... other arguments are leading us to learn how to redesign our lives, ICT and ... Earth ecosystem, i.e. for this paper ... to be continued!

3. Conclusions The paper is approaching the systemic analysis of a smart management of ICT/IS/KBS evolution, where the essential is to deeply analyze, update the solutions, refine knowledge and responsibly react to challenges/implications, in order to correct the negative consequences of such complex and mass processes at Earth scale.

The analysis started from the actual stage of ICT development, dominated by Cloud Computing, Big Data and Internet of Things (IoT), considering the premises created by “COPs21” Paris Conference context including ICT latest figures on carbon footprint and IoT emergent expansion – which show that Internet traffic is increasing with 40% / year, which would lead, without appropriate measures, to the fact that ICT could consume in 10 years 60 percent of the Earth’s energy resources.

Facing these dramatic realities, our opinion is that the actual “machine” trend, focussed on striving for performance, must be balanced by a greener approach aiming power efficiency and carbon footprint reduction.

As consequence, we have proposed a concrete approach based on 3 relevant issues as: Identifying incertitude/ risk complex and complicated mechanisms, generated by the exponential speed of ICT development in IS/KBS and generally on Earth ecosystem; Developing greener ICT capable to induce greener solutions in all fields of activity; Designing new integrated models, algorithms and technologies for information analysis to cope with all consequences of IoT, Cloud computing, Big Data.

Last but not least, we consider a priority to fight the main difficulties generated by the extreme speed of changes induced by ICT exponential pace of development, which create such complex consequences but does not allow humankind the necessary time to real time react, with the immediate approach of this “impossible” mission as being twofold: rethink and adapt (slow) the ICT pace and on the other hand create the instruments to help us find the balance between the designed ICT pace and the capacity to cope with it!

18

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

REFERENCES

[1]J.Wu, J.Thompson, H.Zhang, R. V. Prasad, S.Guo, Green communications and computing networks, IEEE Communications, May 2016.

[2]Prechi Patel, Building a more eco-friendly telecom industry, IEEE The Institute, Mar.2016.

[3]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, Issue1, Year 2015.

[4]Kathy Pretz, Environmentally friendly Information and Communications Technologies, IEEE The Institute, Mar.2016.

[5]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.

[6]Dave Evans, How the Next Evolution of the Internet Is Changing Everything, Cisco White Paper - The Internet of Things, April 2011.

[7]Jim Chase,The Evolution of the Internet of Things,White Paper-Strategic marketingTexas Instruments, September 2013.

[8]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.

[9] Ovidiu Vermesan, Peter Friess, Internet of Things: Converging Technologies for Smart Environments and Integrated Ecosystems, 2013 River Publishers.

[10]*** 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.

[11] Victor Greu, The cognitive approaches of the communication and information technologies – a leverage for the progress of knowledge based society, Romanian Distribution Committee Magazine, Volume 3, Issue2, Year 2012.

[12] Rachel Courtland, Can HPE’s “The Machine” Deliver?, IEEE Spectrum, Jan. 2016.

[13] Analysys Mason,Imagine an M2M world with 2.1 billion connected things http://www.analysysmason.com/about-us/news/insight/M2M_ forecast_Jan2011/ [14] *** Next GenerationNetworks — Frameworks and functional architecture models — Overview ofthe Internet of things, International Telecommunication Union — ITU-T Y.2060 — (06/2012) [15] *** Internet of Things — An action plan for Europe, (PDF). COM(2009)-278 final,Commission of the European Communities -18 June 2009.

[16] 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.

[17] *** Internet of Things — ITU 2005 Report, www.itu.int/dms_pub/itu-s/opb/pol/ S-POL-IR.IT-2005-SUM-PDF-E.pdf [18] ** The Internet of Things,https://ec.europa.eu/digital-agenda/en/internet-things, 27/02/2015 [19] 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.

[20] Mark Harris, The Internet of Trees, IEEE Spectrum, Mar.2014.

[21] *** More Than 30 Billion Devices Will Wirelessly Connect to the Internet of Everything in 2020, ABI Research, London, United Kingdom - 09 May 2013, www.abiresearch.com/press/more-than-30-billion-devices-will-wirelessly-conne/

George Cosmin Tănase

T he Futur e of Mar keting in 2016: Tr e n d s i n t h e N e w D i g i t a l A g e

Abstract:

There have been some significant changes in marketing in recent years. The share of digital/mobile in the overall media ad spending share is increasing year over year. The research firm eMarketer estimates that budgets for digital advertising will surpass in 2017 the budgets spent on any other traditional marketing initiatives (TV, print, radio, outdoor, and directories). Marketing is also moving away from a product orientation to a social / mobile orientation. Whereas marketing campaigns from even a decade ago were focused on loose metrics such as GRPs for TV audience measurement, or Arbitron numbers for radio, advertisers’ ability to track visitors’ movements across the web, and (with the growth in mobile device adoption) advertisers’ ability to use location data entail better tracking of responses to marketing messages and the ability to connect with the customer where they are.

20

Keywor ds: personalized experience, usage patterns, customer service, social media, new terminology, digital techniques JEL Classification: D83, M31, M37

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

Big data analytics enable the rapid processing of information from disparate sources. The resulting insights allow marketers to see trends quickly and act on opportunities before their competitors do. Data is collected from visitors’ movements across the web, across apps downloaded to browsers and mobile phones, and from customers’ location information on their mobile devices. Wearable devices, such as the Apple Watch, fitness trackers, step counters and other health monitoring devices, and various mobile apps that present tracked data together with users’ age and health information can also offer actionable information to marketers.

Companies like Facebook and Google not only enable companies to target customers based on their location, Likes and message content (updates, messages, sharing activity) but also extend that targeting across their advertising networks outside of these properties, a process called remarketing. A Google user may visit an ecommerce site, view products but not complete a purchase. If that ecommerce site has a remarketing agreement with Google, it will still be able to reach people who have visited the website or used its app (if available) and not purchased anything. These visitors will see ads for that company as they browse websites that are part of the Google Display Network, or when they search for terms related to the company’s products or services on Google. A similar service is also available on Facebook – which explains why, when friends discuss a product among themselves on Facebook, they will sometimes see ads appear for that product, sometime later, on their wall feed and elsewhere on the web.

Customers are defending themselves against intrusive advertising. On the regulatory front, legislation is in place against companies sending unwanted communications to web users. These laws prevent infringement on privacy and enforce respect of customer consent. In Europe, the General Data Protection Regulation (GDPR) is in place; in the US, Controlling

...

the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM) has been active for over a decade; and in Canada, the Canada Anti-Spam Legislation (CASL) was finally enacted a little over a year ago.

On the personal front, web users defend themselves against intrusive advertising by downloading and installing apps such as AdBlock and AdBlock Plus on their browsers, and using apps with similar features on their mobile devices.

But advertisers have been intruding into that protective shield – some ad blockers now offer a ‘white list’ of ‘approved’ advertisers! These still can be blocked if the user knows what advanced settings to push. And ad networks continue with the cat and mouse game of defeating ad blockers on some pages, and accessing the viewer nevertheless.

And this is not the only challenge for advertisers: with the proliferation of mobile devices using two major operating systems and a myriad of screen sizes, these new platforms and new formats also challenge agencies’ designers.

In summary the overall trend in marketing is moving towards a personalized experience for targeted customers, rather than a mass-marketing spend. Big data analytics enable brands to better understand what customers may want now, and may want in the future. Mass media is still used to bring awareness to new brands and new products, but now marketers have tools to generate interest and the desire to purchase by using more sophisticated tools when the customer provides consent.

1. Data as the driver of real-time strategy Today, data is not the sole purview of direct marketing. Now, all marketing is driven by data, information that describes all aspects of your market relevant to your brand. Every strategy must have good data at its core in order to be implementable, actionable, measurable and successful.

2. The business of the future will be data-driven To realise the full profit potential of your database and your market, you need to leverage all the information you have about your customers at your disposal, including: •

Behavior, channel preferences and usage patterns.

•

Each segment’s specific product and services usage.

•

Technology adoption and automation.

•

Lifestyle, life-stage and revenue-cycle behaviour.

•

Industry-relevant information.

•

Your own trend data criteria.

3. Customer buying journey and mapping Professional customers research before making any purchase. So, our goal is no longer to drive an immediate sale, but to use all available technology and data to empower the customer to make a purchase. You need an integrated sales and marketing strategy that offers useful customisation that enhances your customer’s experience of your brand. You need to tell a story they can connect with, on the channel and medium they prefer. We call it an Omni Channel strategy.

4. Customer service is selective service This is one of the hottest and most severely neglected trends. It’s about only giving your best customers the best service and surrounding them, not with products, but with personal attention that rewards their loyalty. Remember that efficiency isn’t a service; it’s a given. Service excellence is where you gain the competitive edge. Service also has a price, so make sure you price your service at a level your customers can afford.

5. Speak ‘customer’ ‘Customer’is the new language to master. Statistics show that 67% (and increasing) of US sales are now influenced by word of mouth. Customers are the storehouse of your profits, so surround them with the channels they want and integrate them directly into your brand story. Navigate the co-creation of your brand with a mix of channels that places the customer at the center.

6. The blending of direct and brand marketing Direct and brand marketing are complementary strategies and approaches that have a greater overall impact when combined with a coherent, Omni Channel media strategy. Together, they blend into a

22

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

coherent operation to drive sales, enhance awareness, build relationships and increase profitability.

7. Investing in your customers You should have a profit and loss account for each of your customers. They invest their money and time in you, and you invest value. Use data to identify your most profitable customers and invest in them with personalised, targeted communication and loyalty offerings.

8. Measure your marketing efforts Know what you want to measure and why, and then incorporate your findings back into your strategy, evolving it on a continual basis.

9. It’s all about ‘me’ Customer lifestyles are creating new challenges for brands and marketing. They are focused on ‘me’ and increasingly demand a ‘have it all’ lifestyle. We need to figure out how to stay relevant, be noticed and be loved by our customers by placing them, rather than the brand, at the center of our focus.

10. Marketers as guardians of privacy, preference and permission Our responsibility as marketers to balance profit and effectiveness against our customers’ best interests is intensifying. The lines are drawn and the outcome of the battle between the ‘right to privacy’, the ‘fight for permission’ and the ‘drive for relevance’ will define how we proceed as marketers and as guardians of privacy.

11. Environmental concerns drive investment Heightened political and societal pressure to ‘go Green’ will require both marketers and service providers to adopt and publicise environmentally friendly process enhancements.

There are many more up and coming trends to be aware of, and they shift and evolve on an almost daily basis. The key is knowing which ones are relevant for your brand. As far as I’m concerned they all boil down to one thing – using data to gather key insights into your customer and then using those insights to make him or her the focus of your marketing efforts.

Marketing is the evergreen go- to solution for any manager to increase the revenue from his product or services. Although from time to time the modes of marketing have evolved, the importance of marketing for a firm to sell its product and services remains consistently high. Books on marketing define it as “identifying the needs of consumer, developing products/services to satisfy those needs and promoting/advertising these developed products to consumer”. Hence, a marketer has to understand consumer insights; design products based on those insights and then go back to the consumer to promote those products.

Although the first two steps remain somewhat constant through time, it is the third factor of promoting/advertising is what which constantly evolves. The main reason for this evolution can be attributed to the rise of digital media, which is transforming the way in which marketers promote their product. The traditional banners/flexes are being replaced by Google banners and advertisements, which are the banners of the digital space. Earlier, marketers used conventional television as the main medium for promoting their products and services using advertisements. But recently this trend has been subjected to serious reconsideration and companies are investing heavily in social mediums like YouTube to reach their target audience. It is this new trend that this article is trying to analyze.

In the new digital age, customers are empowered with tons of data on their fingertips through mobile and social media.

Users search through ratings and feedbacks of products before buying and it is in this exploration phase the importance of marketing comes into picture. It is imperative for any marketer to present his product when the customer searches to satisfy his needs and desires on internet or mobile. The Massachusetts based Hub Spot Inc. terms this new marketing technique as “Inbound marketing”. According to them, inbound marketing refers to marketing activities that bring visitors in, rather than marketers having to go out to get prospects’ attention. Simply inbound marketing means being at the right place, at the right time.

Companies have to make sure that they are able to present their products/services to customers when they want those products. In this new terminology, the traditional way of customers finding the right product suitable for them is termed as outbound marketing. In Outbound marketing, company is the initiator contrary to inbound marketing where customer is the initiator. According to most marketing managers, the main issues they are facing with outbound marketing are tracking the return on investment and increased presence of ad blocker softwares.

Based on a survey done on marketing managers about inbound marketing, CRM Daily cites that “nearly half of the companies that implement inbound marketing efforts see a 25 percent greater return on investment (ROI) on those programs than companies that do not”. The survey also found that inbound marketing channels can deliver up to 30 times the campaign conversion rate of traditional outbound direct-mail campaigns. They even say that inbound marketing is easier to track, has a higher ROI, and lower overall costs than outbound marketing. The easier tracking is achieved by the new digital analytics techniques offered by companies like Google which help marketing companies to track the conversion rate of customers. Also, the conventional method of calculating cost for each displayed advertisement has been replaced by pay per click, pay by conversion mechanisms which increase the ROI for companies. Hence marketing managers are tempted to cut their costs and increase conversions by shifting from outbound marketing to inbound marketing.

Hubspot Inc. defines inbound marketing as a four step process. The first step involves attracting the customers to your website or making them know about your product. Marketers use techniques like blogging and social media publishing for this attraction. Inbound marketing techniques makes sure through these techniques that customers are presented with product details when they search for those. Blogging presents a new platform for marketers to write about the specifics and advantages of the products. Social media has been another revelation of the past decade with people spending chunk of their time in platforms like Facebook, Twitter interacting with friends presenting vast avenues of opportunities for marketers. The major impetus for this trend can be the increasing usage of internet and mobile phones, which in turn raises the opportunity of inbound marketing. The widespread use of mobile phones and mobile internet connectivity also allows marketers to perform the traditional outbound marketing by catering their promotions to specific segments and provide information based on the browsing pattern of the users. This provides marketers with a better-informed tool for their Segmentation – Targeting – positioning exercise.

Once a user has been attracted towards a particular product or service, the second task of a marketer is to make sure that the customer is provided with a delightful experience and thirdly he ends up buying the product. In digital marketing terms, marketer has to generate leads by gathering customer information. For generating leads, inbound marketing uses methods like user information forms, landing page customization, call to action buttons etc. These methods tempt the user to provide his information and explore more about the product, providing the chance for the marketer to close the action. Once the leads are generated, the next step is to make sure that the customer ends up buying the products; meaning the process of buying is closed. Closing encompasses a wider aspect which includes converting the customer into a long term loyalist and building engagements with the customer. For this, inbound marketing proposes methods like customer relationship management (CRM), which helps marketers to get in touch with customers at the right time, and Email marketing, which allows personalized messages to customers, is used. As part of building a long-term relationship and continued engagement, marketers have to make sure that customers are kept have a joyful experience. The fourth step of Delight aims at this function. Inbound companies continue to engage with, delight, and upsell their current customer base into happy promoters of the organizations and products they love. They use techniques like surveys, social monitoring and push messages to maintain this engagement. Post consumption surveys also helps companies to capture customer insights about the product they have consumed and their feedback and opinions about the product. These details can be used for development of products and deliver results based on customer needs, which keeps the customer delight and engagement intact.

Although inbound marketing is the way forward for companies, it should be combined with outbound marketing for proper customer penetration and engagement. The traditional marketing techniques of TV, Radio and print advertising along with digital techniques of social media marketing and email marketing will make sure that customers are informed about the company’s portfolio and increases brand awareness among them. The inbound marketing comes into play when the customer decides to purchase an item and it makes sure that the product is visible to the customer to consider. it has techniques to make sure that once the customer finds the product how that interaction can be converted into a long term engagement and relationship. So, an effective marketing campaign should include the combination of outbound marketing as well as inbound marketing. It is up to the discretion of the marketing manager to design this marketing mix taking into consideration the campaign’s priorities and end results.

24

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

References [1] Kerin, Roger A. (2012). Marketing: The Core. McGaw-Hill Ryerson. p. 31.

[2] Kotler, Armstrong, Philip, Gary. Principles of Marketing. pearson education.

[3] Hochbaum, Dorit S. (2011). “Rating Customers According to Their Promptness to Adopt New Products”. Operations Research 59 (5) [4] “Segmentation, Targeting, and Positioning”. University of Southern California (2013) [5] Stolley, Karl. “Primary Research”. Purdue Online Writing Lab. Retrieved 21 May 2013.

[6] Kardes et al.; 2015; Consumer Behavior; 2nd edition; Cengage Learning, Stamford [7] http://www.hubspot.com [8] https://en.wikipedia.org/wiki/Inbound_marketing [9] http://www.wordstream.com/outbound-marketing [10] “Swarming the shelves: How shops can exploit people’s herd mentality to increase sales”. The Economist. 2016, p. 90

The Challenge of a Truly Omni Channel Approach for Retailers Theodor Valentin PURCÄ‚REA

Abstract: There is an increasing preoccupation for the Omni channel integration experience, Omni channel customer spending more, depending on his Omni channel shopping experience, and wanting to be educated to be sure he is getting the best value. Retailers are under real pressure for identifying the best solutions while facing challenges through the sales cycle, struggling to have the big picture of their customers’ Omni channel journey.

They have to synchronize online and physical experience to deliver on brand promise, so as to ensure the seamless, personal and relevant experience wanted by their consumers. Omni channel practices are considered essential for a quality shopping experience, and mapping the customer journey is the first step in creating a proper problem-solving company’s framework within a strategic digital marketing approach taking into account what matters to always connected consumers.

Keywords: Omni channel shopping experience; Omni channel practices; Omni channel journey; Omni channel digital customer experience

JEL Classification: L81, L86, M31 26

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

Omni Channel Strategy and Delivering on the “Bon Ton” Promise “Bon Ton” is an adjectival phrase in French meaning consistent with good manners, the etiquette or common sense.1 According to Merriam-Webster dictionary, “Bon Ton” means fashionable manner or styles, the fashionable or proper thing, high society.2 NAPCO Media’s3 Total Retail4 recently showed the interesting Omni channel integration experience of Bon-Ton Stores5 (which are owned by The Bon-Ton Stores, Inc.),6 underlining some significant facts resulting from its Omni channel approach during a session at the Internet Retailer Conference & Exhibition7 (Chicago, June 7-10, at McCormick Place West), such as: Bon-Ton retailer incorporates web IDs and keywords for search into its print catalogs, uses engaging content to connect with and inspire its customers, help customers to choose products in its retail environment by providing kiosks and leveraging web inventory in-store (stores or distribution centers), creates more customer engagement by using an e-receipts program (emailing to customers thanks to email addresses collected from its customers at checkout by store associates), offers a virtual credit card that its customers can use in-store via their mobile devices. BonTon retailer’s customers have also the option to buy online and pick up in-store, and - as an Omni channel customer spends more - they are incentivized to shop through multiple channels by an engaging loyalty program.8 It is not by chance that a recent Forbes Insights (the strategic research and thought leadership practice of Forbes Media) and Synchrony Financial survey9 of 250 retailers (representing major sectors of big-purchase retailing, including appliances and electronics, automotive, home furnishings, and outdoor and sports equipment) confirmed customers’ tendency towards an Omni channel shopping experience, by showing that: customers do research online and buy in stores when shopping for major purchases (46%); customers prefer to research and buy online (36%); customers prefer to research and buy in the store (18%).

These responses indicate that 82% of customers do research online, but the biggest group still buys in stores.

The above mentioned research findings also showed the surveyed retailers’ opinion on top five reasons why customers make purchases from a retailer: overall value – 47% of the surveyed retailers (customers also wanting to be educated to be sure they are getting the best value); known/reliable brand – 44%; the right product offering – 43%; variety/wide selection of items – 39%; stands behind product – 38%.

Other research findings underlined top five factors that drive customers to visit the stores: friendly and helpful associates – 38%; pricing/good deals – 38%; retailers’ brand reputation – 36%; retailers’ website – 33%; Word of mouth – 32%. On the other hand retailers’ top challenges through the sales cycle were highlighted: • Presale: research and decision making – 51% In store, 35% Online, 32% Omni channel; • Closing the sale – 35% In store, 45% Online, 36% Omni channel; • Post-sale: service, returns – 14% In store, 20% Online, 32% Omni channel.

This valuable Forbes Insights and Synchrony Financial survey also showed that from the viewpoint of Omni channel journey: 13% of the surveyed retailers have not started yet, and are not planning to; 22% have not started yet, but plan to; 27% early on; 25% other; 13% fully Omni channel. In what concerns the top five challenges with creating a positive online experience, respondents mentioned: cybersecurity – 32%; understanding customer online habits – 28%; privacy issues – 24%; variety of product offering – 24%; analytics of online data to understand customer needs. The research conducted by Forbes Insights and Synchrony Financial drew relevant conclusions, such as: the need of stores to be connected with online operations via instore technologies and talent in order to succeed; the main reason customers are drawn to the store is represented by the sales associates, and this because customers want the human interaction; a critical factor to success is to combine all the channels into one seamless experience for the consumer; the need of associates to have training and be equipped with technologies to bridge the channels and provide the right customer experience.

It is also worth mentioning, within this context, the relevant Synchrony Financial’s list10 of the top

1 *** https://fr.wiktionary.org/wiki/de_bon_ton 2 *** http://www.merriam-webster.com/dictionary/bon%20ton 3 *** http://www.napco.com/what-we-do/ 4 *** http://www.mytotalretail.com/about-us/ 5 *** http://www.bonton.com/content/about/brandcontent1.html 6 *** http://www.bonton.com/content/about/our-community/social-responsibility/content1.html 7 *** http://www.irce.com/ 8 Campanelli, M. - A Peek Into Bon-Ton Stores Omnichannel Strategy, June 10, 2016, retrieved on 12.06.2016, from: http://www.mytotalretail.com/article/a-peek-into-bon-ton-stores-omnichannel-strategy/#utm_source=total-retail-report&utm_medium=newsletter&utm_campaign=2016-06-10&utm_content=a+peek+into+bon-ton+stores+omnichannel+strategy9 *** Forbes Insights. A Split Screen. Online Information and a Human Touch, retrieved on 12.06.2016 , from: https://www.synchronyfinancial.com/Synchrony_Exec._Brief_5-25-2016-18_Final-Web.pdf 10 *** 10 THINGS TO KNOW. THE TOP 10 RETAIL TRENDS FOR 2016, retrieved on 12.06.2016, from: https://www.synchronyfinancial.com/16_RetailTopTenTrends_Final.pdf?bf69fc

10 technology, marketing and consumer trends that can have an impact on retail sales in 2016: wearable technology; new retail holidays; voice technology; virtual reality in the shopping experience; video streaming; internet of things; mobile payments & alternative payments; social network buy buttons; increased spending on pets; personalization. We can see here a link with the last conclusion (from the above paragraph) that targeted a personable experience.

Allow us to also remember that on 20th April 2016, on the occasion of the CX Excellence World Day Two: Summit (Movenpick Hotel Paris Neuilly, Paris, France, 18-20 April, 2016),11 one of the hottest topics on the Agenda was “Omni-channel Management: Synchronising online and physical experience to deliver on brand promise”, within this framework significant issues have been addressed, such as: the top 3 priorities to become Omni channel across silos; how to implement and manage Omni channel, and how to measure Omni channel experience; how do consumers perceive Omni channel, and how do they care about channels as defined by enterprise; measuring multichannel customer experience: combined revenue, combined costs and customer satisfaction.

A real challenge for retailers: the personal and relevant experience wanted by consumers We have seen before retailers’ real need to be equipped with technologies to bridge the channels and provide the right customer experience. Two years ago, a Forrester Consulting thought leadership paper (commissioned by Accenture and hybris, an SAP company) showed that as consumer expectations for Omni channel experience (a brand differentiator) intensify, and retailers’ organizational, technical, and operational barriers remain hard to overcome (many retailers have reached a false state of Omni channel comfort, and they must abolish siloed channel strategies altogether), it is important to consider some key recommendations, such as: start integrating channels and leverage technology to enable a seamless experience; create a cross-functional Omni channel leadership team, and establish clear goals that bridge the gap between customer’s expectations and existing capabilities; create success metrics and incentive structures that drive Omni channel results.12 Within this framework, retailers must identify ways to enhance marketing with consumer-generated content (such as: showcasing consumers’ photos, using contests and giveaways, encouraging reviews) in order to increase brand awareness, new sales lead generation, and customer loyalty, encouraging retail brand followers to share, building a strong community on platforms (Facebook, Twitter, Instagram and so on), leveraging consumer-generated content across retailers’ entire marketing strategy through Omni channel.13

There is no doubt that more and more shoppers are accessing channels by mobile (mobile devices being a key aspect of the shopping journey) at every opportunity, by researching, price checking, comparing products, purchasing, reviewing products, and contacting customer service. The top 5 ways consumers are using their phones while not in a store location – according to the North American Consumer Technologies Retail Survey (2015) – are: to locate a nearby store or check store hours (30% ); to compare prices (30%); to look up product information (29%); to purchase a product (24%); to read customer reviews of a product (24%).14 The integration of online, mobile and in-store

offerings seems to be accepted today as a must for delivering consistent, relevant, personalized experiences, taking into account that consumers want more contextualization.15

A year ago, on the blog of “CPC Strategy” – a thought leader in the retail search industry – which understand the evolution of online shopping as being driven by on-demand convenience and personalization,16 a very interesting case study from the viewpoint of the best Omni channel retail practices for holistic marketing was revealed (Omni channel practices being considered essential for a quality shopping experience).17 In the above mentioned case study18 of Jerome’s Furniture (generating $150 million through its 11 local locations per year in gross sales, the majority coming from in-store traffic, but with a growing proportion coming through online channels) that embraced Omni channel marketing, the biggest challenge was for everyone from the Jerome’s business to understand what was happening in Omni channel.

And after establishing the proper framework for who their customers were by updating analytics and tracking technology, they conceived a list of specific Omni channel target goals (drive in-store sales, drive web sales, better understand how online ad spend is contributing to in-store sales, drive brand awareness through YouTube and other display mediums and so on).

This year, the Future Stores 2016 Conference (already in its 4th year), which took place on June 2023, 2016, Sheraton Seattle, Seattle WA, brought together retail executives to discuss in-store innovation and 11 12 13 14 15 16 17 18

28

*** http://www.cxexcellenceworld.com/day-two-summit-wednesday-20th-april--agendaday *** https://www.accenture.com/ca-en/~/media/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Technology_7/Accenture-Customer-Desires-VS-Retailer-Capabilities.pdf Bedgood, L. - Why consumer-generated content is key for today’s retailers, Jun 19, 2016, retrieved on 20.06.2016, from: http://customerthink.com/why-consumer-generated-content-is-key-for-todays-retailers/ Bedgood, L. - Getting Mobile in Retail: Why 87% of Retail Marketers Plan to Up Mobile Spend in 2016, May 17, 2016, retrieved on 21.05.2016, from: http://customerthink.com/getting-mobile-in-retail-why-87-of-retail-marketers-plan-to-up-mobile-spend-in-2016/ Pearson, B. - We Have A Bot For That: How Aldo, Frank + Oak Put The Shopper Experience In Context, Jun 13, 2016, originally appeared on Forbes.com, retrieved on 15.06.2016, from: http://customerthink.com/we-have-a-bot-for-that-how-aldo-frank-oak-put-the-shopper-experience-in-context/ *** http://www.cpcstrategy.com/about/ Johnson, T. - Best Omni-Channel Retail Practices For Holistic Marketing in 2015, April 6, 2015, retrieved on 09.05.2016, from: http://www.cpcstrategy.com/blog/2015/04/best-omni-channel-retail-practices-for-holistic-marketing-in-2015/ *** http://www.cpcstrategy.com/clients/jeromes-furniture-case-study/

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

best practices for merging the digital and physical retail, including focusing on Omni channel integration.

On June 20, 2016 – the “Pre-Day: Retail Innovation In Action” – participants were invited to pay a visit to the Impinj RAIN Experience Center (REC), a Seattle-based innovation center created to test and showcase item connectivity applications in real-world retail shopping scenarios. The Conference agenda informed, for example, that visitors can see how Item Intelligence and RAIN RFID enable Omni channel fulfillment, digitally enhanced shopping experiences, and so on.19 Mapping the customer journey into an Omni channel world According to Marketo,20 well-known for its Engagement Marketing Platform spanning digital, social, mobile and offline channels, the likelihood a customer will respond positively to a campaign’s call-to-action is increased by an Omni channel approach that allow customers to easily view via mobile, desktop, or tablet throughout the day. In other words campaigns are optimized to be Omni channel. Marketo underlines that every step of customers’ journey (from discovery through conversion and advocacy) should be monitored and facilitated by the company, and all digital and non-digital channels should provide an element of personalization because consumers jump seamlessly between channels.

Mapping the customer journey is the first step in creating a proper problem-solving company’s framework within a strategic digital marketing approach. This step involves identifying the channels used by the company (all the touch points where company’s customers encounter company’s brands and departments) in order to send messages and detect not only its customers’ intent and action, but also eventual opportunities for new messaging programs. Of course, this first step open the way of the other ones, such as: identifying the fulcrum points, talking to other departments than marketing, and to people on the customer front lines, reviewing company’s customer satisfaction surveys, examining Management by Objective (MBO) goals in other departments, looking for content to repurpose, seeking out quick wins and situations where the company can build on its success, setting up goals and choosing adequate metrics.21 At the beginning of this year, Experian Marketing Services (well-known promoters of creating the customer journey framework, and moving beyond this journey) brought to the fans of MarketingProfs22 a very challenging talk with Dr. Carl Marci, chief neuroscientist at Nielsen Consumer Neuroscience, cofounder Innerscope Research. Let’s take a look at some highlights from this interesting talk: it is important for marketers to consider all four outputs or expressions of emotion that matter: verbal, nonverbal, behavior, information stored in memory for future use; while better understanding the impact of their marketing by collecting data on consumer reactions in real time, marketers have to do it without disrupting the experience; marketers have to know that they can’t read people’s minds, but they can come close with the help of the modern technology. And as retailers are collecting more data than ever before they have an opportunity to use that information to create the kinds of personalized shopping experiences which consumers now demand (and increase their conversions and, ultimately, revenues in the process).

Two years ago, a representative of Neosperience (which has defined Digital Customer Experience/ DCX since 2014; the one and only DCX cloud that empowers organizations to engage and monetize digital customers by easily delivering customer-facing and business apps)23 showed that: the interactivity between brands and customers will become more relevant with the help of technology (and this thanks to the level of customer behavior understanding provided by neuromarketing) allowing customers to stay connected directly and i.e. order customized products from top brands; an Omni channel digital customer experience can translate into the most powerful brand experience;24 once properly designed and implemented customerfacing app delivers a number of benefits, such as: selection, convenience, speed, information, right-time personalization, smart commerce capabilities.25 It is interesting to note that KPMG’s Omnichannel Retail Survey 2016 (which analyzed key trends from over 250 retailers during the Black Friday and Christmas period 2015and reviewed their impact on the supply chain, key trends covering including Black Friday, delivery models, consumer shopping preferences, returns and the online experience)26 revealed among others that: UK Retailers saw in 2015 an increase in online sales through smartphones and tablets; for those consumers purchasing using the mobile app, only 35% received delivery notifications through their app (indicating room for improvement); 35% of high street shoppers actually bought add-on-sales, compared to 21% of online shoppers (also indicating room for increasing revenue through Internet-based channels by further improving personalisation and effectively 19 20 21 22 23 24 25 26

*** http://futurestores.wbresearch.com/agenda-mc *** Digital-Marketing-101-Key-Tools-for-Engagement-Marketing-Marketo McDonald, L. - How Your Marketing Smarts Can Solve Company Problems, 09 June 2016, retrieved on 14.06.2016, from: http://www.silverpop.com/blog/How-Your-Marketing-Smarts-Can-Solve-Company-Problems?

O’Shea Gorgone, K. - What Makes Buyers Tick: Dr. Carl Marci of Nielsen Consumer Neuroscience on Marketing Smarts [Podcast], January 06, 2016, retrieved on 06.01.2016, from: http://www.marketingprofs.com/podcasts/2016/29104/carl-marci-nielsen-neuroscience-marketing-smarts#ixzz3wTjAvhSJ *** http://www.neosperience.com/about Melpignano , D. - Neuromarketing and the Art of the Digital Customer Experience, Jul 13, 2014, retrieved on 06.01.2016, from: http://blog.neosperience.com/neuromarketing-and-the-art-of-the-digital-customer-experience Melpignano, D. - Retailers & CPGS: ride two horses to achieve digital customer experience mastery, Jun 27, 2014, retrieved on, from: http://blog.neosperience.com/retailers-cpgs-ride-two-horses-to-achieve-digital-customer-experience-mastery *** Omnichannel Retail Survey 2016, 4 February 2016, https://home.kpmg.com/uk/en/home/insights/2015/02/omnichannel-retail-survey-2016.html

leveraging data collected); there is an opportunity for Omni channel retailers to challenge online-only specialists by achieving a single view of inventory; convenience (next day delivery or Click & Collect) and cost (low / nil for delivery) are key priorities for customers.27 At the end of the last year, James Rowell, Lecturer Operations and Supply Chain Management, Business School, University of Buckingham, argued in a relevant article,28 published in “Romanian Distribution Committee Magazine�, that Omni-channel has become even more competitive, retailers reviewing from marketing and operations perspective the range(s) of products made available through different channels and/or locations., and speed becoming a crucial competitive factor. He underlined that 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.

TRANSACTION ACTION

%

TRANSACTION FROM

ACCOUNT COUNT NUMBER

TO

27 28

30

*** Omnichannel Retail Survey, 2016, https://assets.kpmg.com/content/dam/kpmg/pdf/2016/02/omnichanel-retail-survey-2016.pdf Rowell, J. - Omni-Channel Retailing: the changing battleground, in Romanian Distribution Committee Magazine, Volume 6, Issue 4, 2015, pp. 10-17

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

Instead of conclusions There is no doubt, indeed, that Omni-channel has become even more competitive. An Omni-Channel Shoppers Study (US only, fielded Sep 6-18, 2015; more than 2,400 adult “omni-channel shoppers”) by GfK (commissioned by Facebook IQ) found that: today, 45% of all shopping journeys contain mobile (57% for Millennials – 18-34 years old), Omni-channel shoppers are looking for a better experience across all of their devices, but especially on mobile; the mobile shopping experience is still very much lacking in many areas, but smartphones and tablets are the preferred devices among most people shopping online and even while in brick-and-mortar stores; brands will have to rethink how they present product details in a visually impactful way that’s clear yet small-screen friendly.29 McKinsey’s global survey30 of more than 22,000 consumers highlighted recent shifts (differing by region) in buying behaviors, one of them having to do with where people shop. Respondents claimed to have shifted a considerable fraction of their spending toward online and discount channels. On the other hand, allow us to remember another opinion expressed within the context of the Retail Business Technology Expo (RBTE), which took place on March 9-10, 2016, in London (the next one will be on May 8-9, 2017).

As the Website of RBTE recommended checking out their supplement in The Telegraph, we find out the opinion of the Head of retail propositions at BT Expedite (a strategic partner and proven innovator for 100 leading retailers in over 170 countries worldwide),31 who pointed out that: what matters to always connected consumers (using multiple touch-points, from tablets, apps and online to in-store when shopping) are ease, convenience, speed and a seamless shopping experience which takes them from browsing to delivery; what matters to retailers is having a truly Omni-channel approach, continually improving their ability to provide personalised customer service, enhancing customer engagement and boosting loyalty by improving speed and service, ensuring an unique shopping journeys built around consumers individual preferences and shopping styles.32 From the viewpoint of BT Expedite, as customers want a frictionless experience, wanting to be in control, retailers need to understand that genuine Omni-channel is leaner and smarter, being all about integration, making everything retailer sells available to every customer, anywhere and everywhere.33

29 30 er-behavior 31 32 tions/2016/retail.pdf 33

*** The M-Factor for Today’s Omni-Channel Shoppers, February 4, 2016, retrieved on 04.06.2016, from: http://insights.fb.com/2016/02/04/the-m-factor-for-todays-omni-channel-shoppers/ Magni, M., Martinez, A. and Motiwala, R. - Saving, scrimping, and . . . splurging? New insights into consumer behavior, March 2016, retrieved on 04.06.2016, from: http://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/saving-scrimping-and-splurging-new-insights-into-consum*** http://www.btexpedite.com/about-us/ Denton, M. - Working together to create a superior omni-channel experience for everyone, Business Reporter, an independent report from Lyonsdown, distributed with the Sunday Telegraph, February 2016, Industry View, p. 4, retrieved on 04.06.2016, from: http://www.lyonsdown.co.uk/publica*** http://www.btexpedite.com/solutions/omnichannel/

I hate statistics Nicolaie MIHAIESCU

Abstract: Statistics play a major role in economy, being strongly associated with facts, but it is not necessarily that those facts show the truth. There is a the dark side of statistics. Recently I was stricken again by two horrible economic dat. The Romanian home trade network almost disappeared and the list of bad statistic is wide open.

Keywords: Statistics; Pareto Principle; European policies; Romanian home trade network

JEL Classification: C10; E61; L81; M31

32

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

One cannot think globally without the science of statistic but…

According to Webster’s dictionaries statistics is “a collection of facts tabulated numerically “and going deeply...” numerical data that is collected, processed and analyzed as an aid to decision making”… So far so good…

I agree that statistics play a major role in economy for the decisions makers as well as for those asked to carry out their ideas. One cannot think globally without the science of statistic but seeing all globally may put you on wrong paths or may lead you to wrong conclusions.

As students in economy we were sometimes joking that statistics make everyone happy. Let us take this example: I eat two breads and you eat nothing; statistically each of us eat at least one bread which really makes both of us happy…

So even statistics is strongly associated with facts, it is not necessarily that those facts show the truth… In almost all cases, figures used to show per capita data like GDP or state expenditure for health or culture may induce wrong images and justified questions as : “If I hold ten thousand dollars annually - my portion of GDP - why am I so poor and homeless …??”

Analyses based on statistics include also indexes that also may hide the truth or may lead to false images.

Working with large numerical data the Italian economist Vilfredo Pareto found in 1906 that 80% of the land in Italy was owned by 20% of the population, (Lavinsky, 2014) this 80/20 distribution occurring extremely frequently (for example, Perry Marshall, the author of the book “80/20 Sales and Marketing” found that the Pareto Principle is exponential).

So, sometimes 20 percent of the population may possess 80 percent of wealth available and this principle is valid in many other fields. This is also true but very interesting and intriguing too because you may believe you are part of those 20 percent!!!

The dark side of statistics… but I must admit that without statistics…

The dark side of statistics is also revealed saying that when one or two men died it is a tragedy while if there are more then ten this is simply statistics. At this point I start to say why I hate statistics. First I found that ugly facts refer numerically to an average so nobody feel touched considering that if it to be bad it regards somebody else.

This is not fair!!

Suppose a new Pareto was born here in Romania. How would he possibly react seeing a recent paper issued

by The National Institute of Statistics (INS) showing undoubtedly that from 1990 till 2014 a huge amount of money, 500 billion Euro was invested into Romanian economy from which 5 billion was foreign capital - 1% - and yet 88 % of all companies belong to foreign owners and thus are controlled from abroad. So, all in all foreign investors spent 1 percent to hold 88% finally. This is quite impressive and it is such an embarrassment for me as Romanian unable to do something to change such an ugly picture. And this is one of the reasons I hate statistic.

Recently I was stricken again by two horrible economic data – Romanian apples once very much appreciated worldwide simply disappeared from internal organized market being replaced by Polish or other origins. This was possible due to European policies concerning subsidies granted to foreign agricultural produces exported to Romanian market. The result was that due to low import prices of such produces subsided by foreign Governments, our apples, caw milk and others were in an uneven competition leaving the Romanian companies with no funds for a further production.

Turning back to the dark side of statistics we may say that on Romanian market Romanian and Polish suppliers produce in average each 50 % of apples on sale!!!!! Same happens when Romania become importer of energy from countries where it was a traditional exporter!!! The Romanian home trade network almost disappeared and the list of bad statistic is wide open…

Conclusions Statistics is blind as the justice is and the facts it handled may be pleasant or not but no one can denied them. So even I hate it, I must admit that without statistics we cannot see the pictures of what surrounds us be it bad or good…

References

Lavinsky, D. - Pareto Principle: How To Use It To Dramatically Grow Your Business, Forbes Contributors, Jan 20, 2014, retrieved on 25.06.2016, from: http://www.forbes.com/sites/davelavinsky/2014/01/20/pareto-principle-how-to-use-it-to-dramatically-growyour-business/#7b7a98c21259

Léon F. WEGNEZ (by courtesy of) - “Ethics and Sustainable Development” 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 five years were: John L. Stanton, Léon F. Wegnez, Romano Prodi, Klaus Toepfer, and Robert Aumann). Knowing our distinguished readers’ thirst for knowledge, we offer you, by courtesy of this remarkable personality, his article entitled “Ethics and Sustainable Development”, and published in the prestigious “Distribution d’aujourd’hui”, 57ème année, Février 2016, Brussels.

34

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

36

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

T O P 1 0 R E TA I L E R S O N THE ROMANIAN MARKET

BY NET TURNOVER (2015) GEORGE COSMIN TÄ‚NASE

38

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

48

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

Challenges of Food Waste Management, SPAR Wholesale, European Training Foundation, CORP Hamburg, EUproject FUSIONS, New CIRCLE Initiative, Urban Soul, Cool Chain/Handbook, Best Department Store of the World/IGDS Bernd HALLIER

Prof. Dr. Bernd Hallier visiting again the Romanian American University, longstanding friend of the European Retail Academy

Prof. Dr. Bernd Hallier, an Honorary Member of the Romanian Distribution Committee, and distinguished Member of the Editorial Board of “Romanian Distribution Committee Magazine” (he is also Honorary Member of the Romanian Scientific Society of Management - SSMAR) attracted our attention on great events happening in the second quarter of 2016, and allowed us to present them.

European Retail Academy: Challenges of Food Waste Management The food waste problem is a multi-faceted issue, a problem bigger than we currently think (there are substantial losses along the stages of the food chain - agricultural production, post-harvest handling and storage, processing and packaging, distribution, and consumption; the reduction of food losses is seen as an important starting point for achieving global food security, freeing up finite resources for other uses, diminishing environmental risks and avoiding financial losses etc.), and is starting to get the attention it really deserves. There is clear evidence that food is lost or wasted throughout the supply chain, from the farm/production stage down to the consumption stage, each actor along the supply chain incurring or conceding some level of loss or waste. It’s time that people start realizing they can do the right thing.

50

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

European Retail Academy (ERA) let us know that the Agricultural University of Nairobi, Kenya has provided an educational video with a case-study how to improve one of the big problems of Food Waste: a lack of skills and technologies at the farming and logistical level of developing countries. Next year, in March 2017, the above mentioned Nairobi University (which joined ERA network last year) will organize, as the Kenya Competence Center of the World Food Preservation Center, the first Africa-wide Postharvest Food Loss Reduction Conference and Exhibition.

In the opinion of Prof. Dr. Bernd Hallier (coordinator of the volume “Food Waste Management.

Systeme gegen Lebensmittelverschwendung” based on an EU-project FORWARD; just remember the conclusion added by Professor Hallier: “It is not the knowledge which is changing the world but the skills of awareness for needs”), this Total Supply Event to fight Food Waste “can be an important local step in building a Global House of Harmony based on Economics, Ecology and Ethics in Africa”, that is why “we should use our global retail know-how to support this initiative”.

European Retail Academy website about SPAR Wholesale The European Retail Academy (ERA) website informed us on April 15, 2016 about SPAR’s international performance: SPAR was founded in 1932 in the Netherlands as a voluntary chain; in 1959 SPAR International was founded as a roof for coordination; today SPAR (which is operated in 40 countries with 12,200 stores comprising of four formats) can be found even in Russia, China or Africa (SPAR South Africa even took over 60 percent of SPAR Switzerland).

SPAR International is recognized for focusing on quality and service, its goal being to grow its brand and presence by enhancing the productivity and profitability of its Partners that can access SPAR Private Label products from a variety of sources (through the consolidation warehouse in The Netherlands, the Buying Department provides additional services to meet specific country needs; through buying the products in collaboration, SPAR International can maximize the buying power of SPAR Partners.), while being assisted in choosing and implementing the latest IT systems for business and Supply Chain Management.

European Training Foundation On April 29, 2016, European Retail Academy let us know that the European Training Foundation (ETF) is a decentralized agency of the European Union (EU) based in Turin/Italy, and Prof. Dr. Theodor Purcarea of the Romanian American University (RAU), longstanding friend of the European Retail Academy (ERA), interviewed Dr. Madlen Serban (photo), Director of ETF.

Vocational training is - according to Prof. Dr. Bernd Hallier - of utmost importance to bridge 52

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

theoretical learning and application of know-how in practical life. ERA therefore developed in 2010 a special platform (EUCVOT) for this target group after a joint research project with the Social Dialogue group of EuroCommerce and Uni Europa.

CORP Hamburg On May 12, 2016, (ERA) website informed us that REAL CORP will organize its 21st International Conference for City - and Regional Development as well as about the Information Society in Hamburg/ Germany under the slogan “Smart me up!” The topics of the 150 lectures are really challenging.

Prof. Dr. Bernd Hallier reported about the topic “Sponsoring (in Art) is Smart” based on the activities like www.Roesrath-wird-zur-galerie.de, www.european-retail-academy.org/FAB andwww.european-retailacademy.org/KTG. The small city of Roesrath accumulated in the last years 490.000 Euro from its Citizen Foundation!

EU-project FUSIONS European Retail Academy let us know on May 19, 2016 that the EU-project FUSIONS hold in Brussels/Belgium its final event under the title: “No more Food to Waste”. Country Reports have been drafted for Austria, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Spain, Sweden, United Kingdom, Norway and Turkey.

As an intercontinental project, the European Retail Academy will support the first Africa-wide Postharvest Food Loss Reduction Conference in the end of March 2017 in Nairobi/Kenya. “We should use our international retail knowledge to support this initiative to build a Global House of Harmony based on Economics, Ecology and Ethics” Prof. Dr. Bernd Hallier said.

New CIRCLE Initiative On May 27, 2016 ERA website informed us about a new CIRCLE initiative. It is well-known that since 2004 CIRCLE organizes international PhD Conferences, rotating each year to another European country. In 2013 additionally a double diploma for distance learning (MA/PhD) was established with VITEZ

University/Bosnia Herzegowina. Participating in the PhD Program is among others Alina Pukhovskaya from the European Retail Academy.

As a new initiative CIRCLE is now launching the International Journal EMBA. “It is important to connect the international scientific research community by media like IJEMBA” Prof. Dr. Bernd Hallier said.

Urban Soul European Retail Academy let us know on June 4, 2016 that GMA (Gesellschaft für Markt und Absatzforschung) and Taylor Wessing organized its 9th Retail Forum in Cologne/Germany: analyzing the effects of digital challenges of online-shopping for traditional retail, new store-formats and urban revitalization.

Taylor Wessing (www.taylorwessing.com) is specialized on legal questions in urban planning, and insofar new outlet-types like drive-in-depots/pick-up-stations, as also factory outlets, have been checked versus the legal frame, legal interpretations and legal developments in Germany, were most decisions are based on the traditional Center Hierarchy.

Cool Chain/Handbook On June 15, 2016 ERA website informed us that in 2003 the first International Cold Chain Management Conference was launched, and now, at the University of Bonn, the 6th edition has reached a significant number of participants (92) from 18 countries; cases had been presented from Australia, Benin, 54

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

Brazil, Denmark, Germany, Greece, India, Mexico, Netherlands, Sweden and the USA.

In addition a workshop for a “Living Handbook of Perishable Food Supply Chain” was initiated, as an international scientific reference medium, being an open access publishing project as a part of the PUBLISSO Portal. Prof. Dr. Bernd Hallier will be a member of the editorial advisory board for the “Environment/Sustainability” section.

Best Department Store of the World/IGDS European Retail Academy also let us know on June 24, 2016 that the IGDS Global Department Store Summit 2016 voted in its Zurich Meeting in Switzerland for La Rinascente from Milan/Italy to be the Best Department Store of the World. At the picture are Monica Monsch (Jelmoli), Katie McGrath & Stephen Sealey (Brown Thomas), Alberto Baldan (LaRinascente), Anne Pitcher & Beverley Devonish (Selfridges), Asli Karadeniz (Re-Orientation)

IGDS (www.igds.org) is the largest Association for Department Stores worldwide, having 40 members from 36 countries on five continents. The Zurich Summit was attended by more than 370 leading international executives and stakeholders.

A Short Presentation of our Partner Journal „Contemporary Economics” Vol. 10, Issue 2, 2016 Quarterly of University of Finance and Management in Warsaw Irina PURCĂREA JEL Classification: Y30

“Contemporary Economics” is an academic quarterly (Editor in Chief - Marcin Staniewski, University of Finance and Management in Warsaw, Poland) 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.

The first paper of this second 2016 issue, entitled “Costs of corporate bond issue in coal mining companies original article” (Agata Sierpinska-Sawicz and Patrycja Barbara Bąk), analyze the bond issue programs of three of the four mining companies operating in Poland (the fourth company did not issue any bonds), where more than 90% of electricity production is based on coal fuel, companies being in debt, and generating losses, and banks being reluctant to loan money, and demanding high interest due to the poor financial condition of the issuers. The mining companies are constrained to pay three kinds of fees in addition to interest (a capital commitment fee, an arrangement fee and a fee for early redemption). Overall,

56

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

the bond issue results in significantly higher costs of raising capital through a bank loan.

In the paper entitled “The Mega Distributed Lag Model”, the authors (Mario Arturo Ruiz Estrada, Evangelos Koutronas, and Ross Knippenberg) describe the graphical behavior of the distributed lag model in an infinite coordinate space, and analyze different approaches of lag distribution models that can help in the construction of their new model. They argued that „The Mega Distributed Lag Model” is moving from the uses of the classic 2-dimensional and 3-dimensional graphical modeling to a multidimensional graphical modeling in Econometrics, this model being finally an extension of those explored earlier in the field of Econographicology.

“An Allocation Analysis of Polish Household Savings Invested in Financial Assets, 2003 – 2014” (Wieslaw Debski and Bartosz Swiderski) is a paper that underlines that these savings are very important in every country, determining investments in the national economy, and influencing thereby a country’s further

58

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu

economic growth and development. The authors investigated both the allocation of personal savings and their structure, which is essential because they change due to changing economic circumstances, and mainly analyzed the changes in the allocation of savings in Polish households and the structure of their investment in financial assets. They conducted this analysis on the basis of trend models with variations of parameters.

Another paper, “Time-Varying Linkages of Economic Activities in China and the Stock Markets in ASEAN-5” (Kee Tuan Teng, Siew Hwa Yen, Soo Y. Chua, and Hooi Hooi Lean), examined the evolution of dynamic linkages and volatility spillover between the five countries of the Association of Southeast Asian Nations (ASEAN-5) stock markets and China’s economic activities. The authors determined a suitable destination for equity portfolio diversification among the studied markets, by using the movements and structural breaks of the time-varying correlation and Granger causality test. They revealed that ASEAN-5 has gradually become the preferred destination for diversifying equity portfolios for investors in China.

One of the papers included in this second 2016 issue, “Valuation of Contractual Assets Using Statistical Simulation” (Jan Vlachy), develops a dynamic option-based Monte Carlo model for the valuation of rental and other similarly structured lease contracts under the conditions of uncertainty that is then solved by statistical simulation. The author took an interdisciplinary approach to apply this Monte Carlo model in the particular context, on the basis of a previously published general firm-theoretical approach, and taking into account that this model is an appropriate and practical tool for analyzing embedded options, being also very well disposed for various microeconomic analyses, enabling the demonstration of the particular impacts and sensitivities of contractual party-specific factors, as well as environmental ones.

The paper „ Financial Systems and Economic Growth: Empirical Evidence from Australia” (Sheilla Nyasha and Nicholas M. Odhiambo) investigates the dynamic impact of both bank- and market-based financial development on economic growth in Australia during the period from 1980 to 2012. The authors used: the autoregressive distributed lag (ARDL) bounds testing approach to examine the above mentioned linkage; both bank- and market-based financial development indices (computed using the means-removed average method) to measure the level of financial sector development in Australia. The findings show the market-based financial development has no significant impact on economic growth (in the short run and in the long run), implying that to stimulate growth it is of paramount importance to concentrate on pro-banking sector policies, at least in the short run.

The final paper of this 2016 second issue of “Contemporary Economics”, entitled “Developing Countries as New Growth Poles of Post-Crisis Global Economy” (Elena Popkova, Svetlana Meshkova, Evgeniya Karpunina, Elena Karpushko, and Marina Karpushko), is exploring for a solution to overcoming the consequences of the global financial and economic crisis and the development of a post-crisis global economy, by focusing on the determination of perspectives and directions for the development of new growth poles in a post-crisis global economy and on the development of tools for overcoming the consequences of the crisis and facilitating the global economic system entry into a new level of economic growth. The authors offered the following perspective and directions for the development of new growth poles (China, Japan, Brazil, Russia, and India) in a post-crisis global economy for the increase in rates and quality (stability and sustainability) of economic growth: an emphasis on the real sector development of the economy, realization of transnational cluster initiatives, and active creation and implementation of innovations into production.

They also developed the mechanism of post-crisis global economy development as a tool for overcoming

the consequences of the crisis and the global economic system entering a new level of economic growth.

60

Romanian Distributtion Committee Magazine / July 2016 / www.distribution-magazine.eu