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EDITORIAL BOARD

Romanian Distribution Committee Magazine

Volume: 7 Issue: 3 Year: 2016 Scientific Review of the Romanian Distribution Committee

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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

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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 (4) Issue 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: 3 Year: 2016

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

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CONTENTS

PAG 8. Editorial: Editorial: Learning from Marketing and Sales Practice

Theodor Valentin PURCĂREA

PAG 10. Information and Communications Technologies Go Greener Beyond IOT - Behind is All the Earth, Part 2 Victor GREU

PAG 20. The 6C Model of Social Media and Developing a Viral Marketing Campaign George Cosmin TĂNASE

PAG 26. The Retail Market Under the Pressure of the Technological Change Theodor PURCĂREA

PAG 38. (by courtesy of) - Better Involving Consumers in Product Design, initially published in the prestigious “Distribution d’aujourd’hui”, 57ème année, Juillet 2016, Brussels Léon F. WEGNEZ

PAG 43. (by courtesy of) - 50 years EuroShop, Status World Food Preservation Center, Strengthening Africa and CIRCLE PhD Seminar

Bernd HALLIER


EDITORIAL: LEARNING FROM MARKETING AND SALES PRACTICE

A recent episode of the McKinsey Podcast, (Mahdavian, Valdivieso de Uster, 2016) which inspired our title, started from the 2nd Edition of the book “Sales Growth: Five Proven Strategies from the World’s Sales Leaders” launched this year in May, which shares valuable lessons, such as: the role of digital sales in powering growth, how to develop the right organization’s “sales DNA”, and improve channel performance, the importance of presales, how to get the most out of marketing, the entirely reshaping of the sales function with the help of technology and outsourcing. (Baumgartner, Hatami, Valdivieso de Uster, 2016) The podcast revealed the five practices differentiating the fast-growing companies from the slow-growing companies: finding growth before their competitors do; selling the way their customers want to buy; increasing the power of their sales engines (especially investing in sales operations, presales, and the alignment between marketing and technology); focusing on their people; leading from the top (investing in and gain commitment from the organization, and in change management and implement change from the ground up). Other McKinsey’s representatives: • approached the topic of business’s growth by: concluding that a top priority for business executives today is the organic growth, hence the need of having a clear organic-growth agenda and sufficient resources for the necessary initiatives; recommending companies by beginning focusing on cost and growth, and asking themselves key questions, such as: how balanced is their portfolio, who is thinking about disruption, if they limit their horizons, use advantaged insights, and are agile enough; (Gordon, Liedtke, and Timelin, 2016) • brought new insights (discoveries of fundamental consumer needs used by companies in order to create value for both the customer and the business) for new growth, highlighting the big competitive advantage of the companies knowing how and when to use today available research tools, showing, for example, that well-known competitive brands (such as Unilever, Philips, Amazon, and Netflix) have in common the fact that they drive growth by meeting better consumer needs, getting better answers by strongly believing both in insights, and in the whole mix of insight tools actively used. (Gordon, Grüntges, Smith, and Staack, 2016) Also recently, the CEO of NineSigma (a global innovation company that helped pioneer the practice of open innovation) revealed how to go from insights to products customers want (starting from a research published by the Harvard Business Review which revealed that from disruptive products are coming the highest long-term returns on innovation investments), by gathering the advance insights thanks to blending design thinking (a customer-driven approach exemplified by the leading manufacturer of kitchen utensils OXO; the design thinking sequence involves: a strategic opportunity analysis – SOA, planning, researching, ideating) and open innovation (the accelerate development of groundbreaking products by tapping the scientific 8

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and technical experts’ community; the open innovation sequence involves: prototyping, testing and feed backing) strategies. Marketers and technologists are put on equal footing, in the quest to create breakthroughs, by this open design thinking empowering them with the necessary insights. (Zynga, 2016)

Arrived at the end of this editorial it’s time to go back to an approach (from exactly a year ago) of “the secret to sales success” (O’Shea Gorgone, 2015) by Jill Konrath (the bestselling author of “Selling to Big Companies”, “SNAP Selling”, and “Agile Selling”) and Donal Daly (the CEO of The TAS Group and author of “Account Planning in Salesforce”), who underlined, among other aspects, that: part of the salesperson’s job is understanding the customer’s pain points and creating value on the basis of insights into what’s happening in the marketplace, focusing on customer alignment; as the sales manager has an emotional intelligence, it is necessary to be helped to avoid entering into the panic routine of not meeting his quota. Which made us recall that marketing study starts with psychology study (as highlighted ten years ago by the reputed Al Ries) and if psychology is the systematic study of human behavior, then marketing is the systematic study of human behavior on the market.

THEODOR VALENTIN PURCĂREA EDITOR – IN – CHIEF References Mahdavian, M., Valdivieso de Uster, M., Let’s talk about sales growth, interview conducted by McKinsey Digital and Marketing and Sales Practices’ Barr Seitz, Podcast September 2016, retrieved from: http://www.mckinsey.com/ business-functions/marketing-and-sales/our-insights/lets-talk-about-sales-growth Baumgartner, T., Hatami, H., Valdivieso de Uster, M., Benioff, M. (Foreword by), Sales Growth: Five Proven Strategies from the World’s Sales Leaders, 2nd Edition, John Wiley & Sons, May 2016, retrieved from: http://eu.wiley. com/WileyCDA/WileyTitle/productCd-1119281083.html Gordon, J., Liedtke, N. and Timelin, B., NOW NEW NEXT: How growth champions create new value, September 2016, retrieved from: http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/now-newnext-how-growth-champions-create-new-value?cid=other-eml-alt-mip-mck-oth-1609 Gordon, J., Grüntges, V., Smith, V. and Staack, Y., New insights for new growth: What it takes to understand your customers today, September 2016, retrieved from: http://www.mckinsey.com/business-functions/marketing-andsales/our-insights/new-insights-for-new-growth-what-it-takes-to-understand-your-customers-today Zynga, A., If You Create, Will They Buy? How to Go From Insights to Products Customers Want, MarketingProfs, September 27, 2016, retrieved from: http://www.marketingprofs.com/articles/2016/30734/if-you-create-will-theybuy-how-to-go-from-insights-to-products-customers-want?adref=nlt092716 O’Shea Gorgone, K., The Secret to Sales Success: Jill Konrath and Donal Daly on Marketing Smarts [Podcast], September 02, 2015, retrieved from: http://www.marketingprofs.com/podcasts/2015/28376/sales-jill-konrath-donaldaly-marketing-smarts#ixzz3kfARe5SC Ries, A., Understanding Marketing Psychology and the Halo Effect, April 17, 2006, retrieved from: http://adage.com/article/al-ries/understanding-marketing-psychology-halo-effect/108676/


Abstract INFORMATION AND COMMUNICATIONS TECHNOLOGIES GO GREENER BEYOND IOT- BEHIND IS ALL THE EARTH -PART 2Victor GREU

The paper presents a systemic analysis of the context, implementation and consequences of „greener” Information and Communications Technologies (ICT). The presented context reveals the necessity to carefully „observe” the fast and complex processes of ICT development, in order to identify real-time solutions to compensate all their (unwanted) consequences in the future and shows that it is reasonably to suppose that building greener ICT while extending IoT as a network of networks at Earth scale has to go beyond ... energy savings. The analysis covered the desired consequences of greener ICT as coming from two main directions: directly from all processes of production and utilization of ICT (products and services); indirectly from the whole diversity of applications of ICT as imbedded in practically all areas of humankind activity fields. The analysis focused on identifying the most important directions where energy savings are significant for ICT carbon footprint, but more than this, on ways ICT could generate, for humankind life on Earth and generally for Information society (IS) toward Knowledge Based Society (KBS) evolution, benefic effects that could be also considered „green” or environment friendly for the humankind ecosistem, although they could not be quantified as energy savings. Based on United Nations definition, the author

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considered that sustainable processes in social and economic are also green forms of development, extending the environment to the ecosystem of humankind life on Earth. The analysis presented also the two main directions for the „greener” ICT/IoT implementation, mainly for energy savings, as improvements of technologies, architectures, components, devices, algorithms, methods and protocols. The other side is generated by a diversity of methods to provide a green behaviour of ICT/IoT use.The essential aspect is that the effect of those technologies will be multiplied by the number of expected IoT networks/devices, this way appearing the huge relevance and consequences of greener ICT in the IoT era. The paper also approached some evaluation/measuring aspects referring to the the greener ICT processes. A special attention, in the second section of the paper, is given to learning from green ICT, as going beyond energy savings, where the main consequence is given by the changes of business models, with sustainable progress for humankind, representing one of the most dramatic non-energy savings consequences of ICT (green) evolution in IS/KBS. The analysis concluded that Big Data, Cloud and Analytics could be the main vectors of this transformation, but here the point paper analyzed is even further forecasting: how to manage the design and use of those technologies in order to leverage the generation of above mentioned green consequences by ICT/IoT. Last but not least, the analysis pointed that humankind have to beware of ICT exponential development negative consequences as “ICT dependence”, physical/intellectual activity fading and excessive resources consumption.

Keywords:

energy saving, sustainable development, green communications and information technologies, changes of business models, software defined, Internet of things, Big Data, information society, knowledge based society.

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

1. Building greener ICT while extending IoT as a network of networks at Earth scale We spoke sometimes about icebergs, in the huge „sea” of Information and Communications Technologies (ICT) exponential evolution, which is the driving „engine” of the evolution of the Information society (IS) toward Knowledge Based Society (KBS). Most recently [4] [7], we have observed and presented the literature confirmations of the fact that Internet of Things (IoT) has the potential to be the first revolution of Internet and more than this, many authors agreed that this IoT/ICT iceberg will eventually represent the 4-th Industrial Revolution for humankind. In fact, speaking about green ICT/IoT we meet again a similar situation (iceberg), which seems to be fairly expressed by Daniel Burrus when speaking about IoT[3]: „When people talk about „the next big thing” they’re never thinking big enough. It’s not a lack of imagination; it’s a lack of observation... the future is always within sight, and you don’t need to imagine what’s already there”. This way we have added not only a brilliant confirmation of the above mentioned literature on IoT, but also of the main approach for the paper actual section and beyond. With other words, it is worth to consider that, when we repeatedly have spoken about „big” trends of ICT, usually the reality were even „bigger” – and IoT is by far the case.


Now it is logical to conclude that the complex processes which will be associated with a „greener ICT/IoT” have to be carefully analized, in order to express a „big enough” picture. In a simpler approach, we have to deeply analyze the limits where a greener ICT/IoT have to be extended. More than all these, the above quotation from [3] recalls (confirms) another idea we have repeatedly presented [10][13]: the necessity to carefully „observe” (analyze) the fast and complex processes of ICT development, in order to identify real-time solutions to compensate all their consequences (beyond energy saving) in the future. Still, we have a slightly different point of view versus the quotation, as imagination has an essentiall role in people`s creation, but we fully agree that the main approach of a sustainable ICT/IS/KBS development is to very carefully „observe” (analyze) every step and this way we have the chance to find, in a methaphoric way, that the future is always within sight. So, considering the above observations, we can pertinently conclude that it is reasonably to suppose that building greener ICT while extending IoT as a network of networks at Earth scale has to go beyond ... energy savings. Of course, in the paper/section next (limited) space we have to further analyze and illustrate this important assumption. First of all, the desired consequences of greener ICT stem from two main directions, as directly from all processes of production and utilization of ICT (products and services), but indirectly from the whole diversity of applications of ICT as imbedded in practically all areas of humankind activity fields.These two huge sources of benefit are sometimes called green ICT and respectively, green by ICT. An example could perhaps better illustrate the big picture, if we would consider the smartphones and the cars, sure the most relevant as numbers at Earth scale. Without entering (here) into details, it is obvious the huge amount of direct energy savings which could be obtained with each (little) reduction of energy imbedded in any of the phases of smartphone production or use. In a similar approach we could consider the cars production or use, in any phase when ICT components apply to indirectly reduce the energy consumption. As a consequence of the fact that these two relevant examples still represent, considering Earth scale and diversity, just the tips of icebergs, green by ICT direction will be mainly analyzed in the next section of the paper. Foccusing just on green ICT (direct) consequences, theoretically we should analyze separately the IT and Communications technology ways to be greener, in a systematic manner, but such approach, although never exhaustive, would be subject for a book [2]. Anyway, the green directions are spread in an impressing diversity, especially for IT side, as from going from power minimization (servers, storage, cooling, data centres, components technology, virtualization, data de-duplication etc.), software, algorithms, coding/analytics, to paperless office, working behaviour and materials recycling. Communications have too a wide area of green directions, including networks architectures, components technology, equipments, protocols, algorithms, coding, management etc. More important than observing these (obviously not orthogonal) two sets of elements, we have to recall the main issue in ICT [10]: IT and communications mature convergence and integration. The consequences of these green directions on environment are also difficult to separate, mainly because of their integration and proliferation (billions) on Earth. This way we may conclude that the complexity of green ITC directions and consequences implies rather a systemic approach than a systematic one. In a realistic and systemic approach, we intend to identify, also mainly by analyzing some relevant examples, the most important directions where energy savings are significant for ICT carbon footprint, but more than this to find the subtle ways ICT could generate, for humankind 12

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life on Earth and generally for IS/KBS evolution, benefic effects that could be also considered „green” or environment friendly for the humankind ecosistem, although they could not be quantified as energy savings. Splitting into energy and non-energy fields is again a difficult job and the „green” definition in literature reflects it, but opinions diversity is, by our opinion, a positive factor for covering the reality and for a better understanding and management of the above mentioned complexity. Some authors [8][2] consider that “green is used in everyday language to refer to environmentally sustainable activities”. On the other hand, the United Nations reports consider [2] that “the three dimensions of sustainable development, which are the social, economic and environmental dimensions ... Being green would correspond to the environmental dimension”. Still, everybody could observe, again, that those 3 dimensions are not always orthogonal, but represent a good reference. We consider also a very useful reference, perhaps the best expressed for our analysis, the Unite Nations (UN) report “Our Common Future” where processes are sustainable if they “meet the needs of the present without compromising the ability of future generations to meet their own needs” [15] [2]. On one hand, this clear definition confirms the opportunity of our precedent analyses [13][10] focused on ICT general development and its optimization criteria, which have to be done considering the long term consequences of such exponential evolution with dramatic influence on all humankind activity and Earth processes, as the time for analysing this influence and refining knowledge are severely reduced. On the other hand, UN definition reveals the main stream of developing greener ICT and generally ICT for IS evolution towards KBS.This way we may recall the crucial idea [13] that ICT development, including the actual “greener” trend, has to be optimized considering the humankind life and Earth long term evolution and taking into account prominent challenges as the climate changes and Earth resources fading. As a concrete conclusion of the above premises, based on UN definition, we may consider that sustainable processes in social and economic areas are also green forms of development, as we extend the environment to the ecosystem of humankind life on Earth. Our approach of green forms of development makes sens also because it is logical to suppose that the direct greener ICT development (mainly by energy and resources savings) will generate a larger volume of non-energy benefits for humankind life and Earth on long term, using less from the already fading Earth resources. More than these, we have pointed that the ICT exponential pace has to be adjusted in the area of production, just to save the Earth limited resources. Here it is worth to mention that a similar analysis[2] considered green ICT main global purpose as “conserving energy and other resources such as paper and rare elements”. A relevant example could better express the significance of the mentioned “rare elements”. Often we use to show to the students a smartphone saying: It includes most of the humankind science and technologies, but also a diversity of precious and even rare materials! Of course, here is just another iceberg tip, as recycling (for example) is a twofold challenge in the next IoT/ ICT era because we need to protect the environment and in the same time to recover useful materials, but it is a good picture of how “green” is extending beyond energy saving. After fixing the general frame of green ICT, some relevant examples could give a realistic dimension of this complex trend and point the priorities. Among the most important and active factors for planning strategies and developing green ICT, the Green Touch research consortium[6] includes experts of 48 ICT companies, besides academia and non-governmental organizations, as Bell Labs/Alcatel-Lucent, China Mobile, Huawei, Orange, Politecnico di Milano, Swisscom, University of Leeds and University of Melbourne. Green Touch strategy includes to increase the efficiency of communications networks by 1000 until the year 2020, referring to the levels of 2010 (year when the consortium started work), but considering the expected traffic and performance.


The strategy pointed the green ICT main directions followed by Green Touch, as technologies, architectures, components, devices, algorithms and protocols. This way, the net effect of energy savings would be in 2020 equivalent with greenhouse gas emissions of 5.8 million cars [6]. The main technologies Green Touch proposed [6] for providing the energy savings in communications include small cells for networks, which will naturally use lower power base stations and will improve coverage and spectrum efficiency too. Other prominent green technologies are focussed on virtual gateways for residential access networks, optical interconnections for routers, voltage/frequency scaling etc. As could be observed from above, these directions and technologies are largely promoted, but another prominent direction is emerging from all players in the field [2] [6]: green behaviour of ICT use. Although green behaviour of ICT use refers to the energy savings provided by management ways, like automatic sleep design and operation of ICT (like wireless access points, routers etc.), the term could be easily extended beyond energy field when benefits could focus on material savings (like paperless office, as we above have mentioned). If we only imagine only these prominent examples multiplied by the number of expected IoT devices, we could better understand the huge relevance and consequences of greener ICT in the IoT era: “The Internet of objects would encode 50 to 100 trillion objects, and be able to follow the movement of those objects. Human beings in surveyed urban environments are each surrounded by 1000 to 5000 trackable objects” [3]. After such big examples, it seems that nothing could impress or bring something surprising, but let’s just fast mention some actual green issues, also covering the energy field. The exponential proliferation of mobile ICT/IoT devices (without speaking of electric cars), in a greener perspective, ask for a revolutionary battery, but this goal is still far enough, inspite of latest improvement including nanotechnology-battery powered from moving energy [7]. In fact, from Sony revolutionary Li-ion technology nothing similar happened and the expectations are for something really “big” [14]. Solar powered base stations represent another significant technological challenge in the context of IoT/ICT expansion and it is a very promising technology for greener ICT as the future base stations tend to transmit lower power in smaller cells [12]. Again closely linked with IoT exponential development, the smart home field will be a huge area which is expected to have benefits from a new green technology based on the software defined concept by integrating a diversity of devices whenever necessary, but more of this offering open design flexible features. It is obvious that these features could optimize almost everything in ICT. In the particular case of software defined smart home, the main advantage is the IoT-oriented structure design, which will provide a huge benefit as IoT will be deployed at Earth scale [1]. It is sure that software defined is one of the ICT directions that will extend their greener benefits beyond energy savings, but not the only one, as the next section will present.

2. Learning from green ICT beyond energy savings and getting more benefit ... when “greener by ICT” Before looking for other consequences of green ICT, a realistic approach must include the answer to a natural question: how can we measure “green” ICT? Indeed, as the research, investments and expectations are so high, the greener ICT have to appear in measurable ways. At least for metering green ICT energy savings, as the main goal, many approaches have been proposed [2][6]. In such complex and diverse area of greener ICT directions, implementations and consequences (we above presented), it is very difficult to find clear, simple and precise metering methods, 14

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algorithms and instruments. Many analyses rather considered relevant to present first some criteria of classifying the greener ICT consequences and this is our opinion too, at least in this paper space. In fact it is important to add that this classification is mandatory when speaking about prominent categories consequences of greener ICT, as energy savings, non-energy savings and the huge area of greener by ICT. Notice that greener by ICT is a common expression referring to all the green consequences indirectly generated by ICT in other humankind activity fields – for example any optimization of cars fuel consumption provided by electronic devices and generally by ICT. Also we can observe that both direct and indirect green ICT consequences could be energy or non-energy savings – as it will be further presented. With other words, the priority and a good result is to have criteria and methods at least to identify the appropriate category where consequences of a certain green ICT implementation in fact lay. This way we have just arrived to this section point and its link with metering is now clear, as for energy savings some ways of metering or estimate have been established, while for the other 2 categories it is important to identify their appearance rate and then add it in statistic which could be a first step for estimation, instead of a precise metering. Again some relevant examples will make the above principles more clear and useful in practice. The case of smartphones and cars, we have mentioned above, is also considered very relevant by [9], where a “metric” for embedded energy (indirectly pointing the relevance of savings) is investigated step by step. Apparently there is no comparison between embedded energy in a smartphone of 140 grams and in a car of 1.4 tones. Still, if we consider the number of main mobil devices [9], in 2015 the global sales of mobile phones reached 1.9 billion, for laptops 60 million and for tablets 230 million. The average embedded energy in these devices was of about 1 exaJoule (1018J), while the production of vehicles in 2015, reaching 72 million units, required 7 exaJoule. The surprising results could be even more relevant if we recall the fact that these mobile devices are usually changed after only 2 years, while a car after 10 years. Hence a simple correction of (1/5) leads to a ratio of only (5/7) between embedded energy for these main “loved companions” of people, in a decade. Now we can easily understand the significance of energy savings by green ICT, although the last example reflects just part of the picture, as the communications and information networks used 2.2 % of all generation energy in 2012 and the estimation for 2020 is of 10%[9]. Speaking of mobile devices and cars energy savings has also opened the way to the other two categories, non-energy savings and greener by ICT. First let’s see how mobile devices and generally greener ICT could bring non-energy savings for humankind and IS/KBS. From the beginning we have to notice that those 3 categories are not completely independent as it is obvious, for example if we consider money savings versus energy savings. In fact we just exemplified one of the main links (money) which produce the “dependence”, because, for short time, money and energy could be converted. More than this, when saving money by greener ICT, they could be converted in other benefits for humankind, as education, health etc. The question is which are the greener ICT (subtle) ways to generate money savings and other non-energy savings, beyond indirectly by energy savings. As we already mentioned, although often subtle, non-energy savings represent a huge area of benefits/consequences of greener ICT, which could be generated either directly or indirectly. Recalling the car fuel consumption example, we can observe that here other ICT benefits could lay in the passengers environment/security/comfort/health areas, which are obviously non-energy. Again adopting a systemic approach versus systematically when analyzing the entire diversity of cases, we consider that changes of business models, with sustainable progress for human-


kind, represent one of the most dramatic non-energy savings consequences of ICT/IoT (green) evolution in IS/KBS. One example could show that this opinion is not only largely shared, but more than one could also reveal the phenomenon dimensions. This time the example is even more relevant for our paper title, as IoT is the main factor of ICT considered by [11], which observes that the diversity of IoT devices offers, among other features, benefits for consumers, i.e. people could have larger options to communicate or use ICT services, when, if necessary, avoiding the main operators, because many other gadgets than smartphones provide ICT features (like tablets, watches etc). The phenomenon (changes of business models) dimensions are also pointed by [3]: “When we start making things intelligent, it’s going to be a major engine for creating new products and new services”. As a consequence, such huge development processes will be leveraged by ICT/IoT exponential evolution and eventually, as we have above mentioned, they could generate green by ICT (non-energy) sustainable effects (we have called green forms of development). It is interesting to observe that in these complex areas, we can speak about the capacity of sustainable effects (green forms of development) to “colour in green” the ICT/IoT which generated them. This way we have estimated a subtle way ICT/IoT could be designed “greener” for inducing (non-energy) sustainable effects in the ecosystem of humankind life on Earth. We have already repeatedly presented the same idea [7][13], but now IoT emergence became, by its multiplying factor, a dramatic leveraging factor for it. Here is the point where we have to observe that the multiplying factor must make us even more aware of the huge responsibilities of carefully designing ICT/IoT development in order to produce only sustainable effects, as any errors could be also dramatically multiplied. These responsibilities and IoT extended benefic consequences are also clearly confirmed by EU [5]: „Adopting a proactive approach, Europe could play a leading role in shaping how IoT works and reap the associated benefits in terms of economic growth and individual well-being, thus making the Internet of things an Internet of things for people”. In order to leverage this reaping, concrete procedures and instruments for monitoring the evolution of IoT were initiated by EU [5]. The concrete ways to provide these benefits could be shortly presented by recalling the main areas where IoT proliferation will be the most visible [3][7][17] , but here the selection criteria is given by their potential to generate green consequences (sustainable effects - green forms of development). A general agreed opinion is that IoT will be developed at Earth scale mainly by a huge diversity of sensors networks, covering most of applications areas [3]: “The ability to network embedded devices with limited CPU, memory and power resources means that IoT finds applications in nearly every field”. It is important to observe that the greener IoT/ICT trend will be provided by devices with limited resources, but globally the amount of power has to be considered as we have mentioned in the first section of the paper. Environment monitoring will be the largest area of IoT applications, with huge benefits, as it could cover, without being limited at [3][7] [18][19]: air/water/soil parameters, vegetation, fauna, earthquakes, radiations etc. The areas list must also include human body health networks, people’s movement/behaviour, objects identifiers/inventory control, end-user experience, legal conformity/copyright, digital security/rights etc. Special “greener” significance and consequences will have the recycling services covered by IoT: „able to precisely identify objects during the recycling process is an advantage and tagged objects could therefore be recycled more efficiently by being retrieved from normal bulk waste disposal” [5]. 16

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Also a human friendly “greener” impact will have the low radiation of IoT devices: „operate with very low power, unlikely to produce significant levels of exposure to EMF” [5]. It is important to add that the same trend will be implemented generally in „greener” cellular communications networks, as we have mentioned in the paper first section, by reducing cell radius and then the necessary radiated power in both base stations and mobile devices. As a human friendly “greener” consequence, the level of EMF (electromagnetic field) to which human body will be daily exposed will be also reduced. As we already presented [16], context-aware communications will enable a huge area of IoT/ ICT services, oriented on industrial, commercial, social, educational applications. Sometimes, following this fantastic world of ICT/IoT could induce a sensation of wondering/ fear: Where all these end? There is a bottleneck? Moore Law is one of the most discussed “bottlenecks”, referring to an eventual slowing of ICT exponential pace and we also have analyzed this challenge [10]. Here, still we are referring to a systemic challenge which could affect exactly the main goal of ICT/IoT the paper presents: a greener (sustainable or least efficient) development of ICT/IoT. Of course, there is a general warning in the paper title “behind is all the Earth”, but on the other hand we have already presented [10] [7] the importance of Big Data, Cloud and Analytics. In fact, we have to learn to design and use IoT in order to generate green consequences, i.e. be sure that the investment in the billions of IoT devices and networks will be efficient, because the most complicate challenge will be to optimally manage the huge amount of data generated every second by these IoT devices. We already analyzed the prominent role of Big Data in IS/KBS (sometimes called Exa Data) [10] but the emergent context of ICT/IoT enables a more complex and dramatic role. This opinion is also generally confirmed by [3]: “Data is the key derivative of device interconnectivity, whilst being pivotal in allowing clearer accuracy in targeting. The Internet of Things therefore transforms the media industry, companies and even governments, opening up a new era of economic growth and competitiveness”. More than this, we consider that Big Data, Cloud and Analytics could be the main vectors of this transformation, but here the point we want to analyze is even further forecasting: how to manage the design and use of those technologies in order to leverage the generation of above mentioned green consequences by ICT/IoT. The challenge is very complex, as the optimization of green consequences of ICT/IoT for IS toward KBS is a multicriterial set of processes. A first enabling process is the contribution of these technologies to the efficient and greener development of IoT. For example, Cloud will be used for most IoT applications, as the devices will have, as we have mentioned, minimal memory. The importance of Cloud, as a ubiquitous support for IoT World wide applications is also confirmed by [3]: “Cloud-based applications are the key to using leveraged data. The Internet of Things doesn’t function without cloud-based applications to interpret and transmit the data coming from all these sensors”. Another large applications area will ease the implementation of IoT as “network of networks” with minimal network resources, using, as we have mentioned in the first paper section, virtual gateways for residential access networks. Naturally, the most complex and complicate problems will consist in designing and implementing new performant algorithms and soft applications capable to handle the huge amount of data (Big Data) and whilst, in real time, provide the best results, assistance and decisions for optimizing the IoT applications concrete processes. In our paper goal, all these greener ICT/IoT results have to be highly exploited for the IS sustainable development to KBS. In fact, as we have already generally approached for ICT [13], the great investments, of intelligence first, in the exponential development of ICT/IoT, must come back as models/lessons


learned, or refined knowledge for humankind in all activities, but especially in education and creation/innovation processes. For example, context aware communications, resources monitoring and refining/updating knowledge are only some of the models people have to lend from ICT, in order to obtain, on long term, better efficiency and progress with minimal resources. In the same time, humankind has to beware of ICT exponential development negative consequences as “ICT dependence”, physical/intellectual activity fading and ... excessive resources consumption. Our opinion is that, beyond “beware of”, we have to “learn” from ICT also by refining knowledge with responsible and rigorous analysis/reaction, especially when the essence of humankind is influenced. Last but not least, we have to remember that, as the system complexity and number of elements are increasing, its reliability tends to decrease, so just imagine what failures could bring in an IoT World, where almost all our lives segments will depend on ICT/IoT (hazard)! Speaking of “ICT dependence” seems not a very important negative consequence, but it is sufficient to recall the first “signs” of this “disease”: dependence of watching TV, computer, games, mobile phones and ...What will be next? Here the essence is not only the “disease” issues, or time losing, but a kind of alienation from the natural humankind behaviour. Without approaching psychological issues, we have to point that in the actual stage of IS/KBS “the natural humankind behaviour” means human kind basic features preservation and ... focussing our physical/intellectual activity for humankind life progress and Earth survival. All these “features” suppose mature thinking and higher innovation/creation potential, which unfortunately are fading as more and more of “thinking” is transferred to ... ICT “machines” and the time is ... wasted. Of course, the challenges are even more complex, but it is clear that the emergent “greener” ICT/IoT have to contribute to a “greener” (younger) human potential, but for this ... all these must be further analyzed!

3. Conclusions The paper is a the systemic analysis of the context, implementation and consequences of „greener” ICT. The analysis presented the necessity to carefully „observe” the fast and complex processes of ICT development, in order to identify real-time solutions to compensate all their (unwanted) consequences in the future and shows that it is reasonably to suppose that building greener ICT while extending IoT as a network of networks at Earth scale has to go beyond ... energy savings. The desired consequences of greener ICT stem from two main directions, as directly from all processes of production and utilization of ICT (products and services), but indirectly from the whole diversity of applications of ICT as imbedded in practically all areas of humankind activity fields. The analysis approched the ways to identify the most important directions where energy savings are significant for ICT carbon footprint, but more than this, some subtle ways ICT could generate, for humankind life on Earth and generally for IS/KBS evolution, benefic effects that could be also considered „green” or environment friendly for the humankind ecosistem, although they could not be quantified as energy savings. As a concrete way to identify such benefic effects, based on UN definition, we considered that sustainable processes in social and economic are also green forms of development, as we extend the environment to the ecosystem of humankind life on Earth. The „greener” ICT/IoT implementation is a two fold complex process, using, mainly for energy savings, improvements of technologies, architectures, components, devices, algorithms, methods and protocols. The other side of process is generated by a diversity of methods to provide 18

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a green behaviour of ICT/IoT use. The most prominent „greener” technologies include small cells for networks, which will naturally use lower power base stations and will improve coverage and spectrum efficiency too. Other prominent green technologies are focussed on virtual gateway for residential access networks, optical interconnections for routers, voltage/frequency scaling etc. The essential aspect is that the effect of those technologies will be multiplied by the number of expected IoT networks/devices, this way appearing the huge relevance and consequences of greener ICT in the IoT era. Considering that the research, investments and expectations are so high, the greener ICT have to appear in measurable forms, this issue being also analyzed. Learning from green ICT, as going beyond energy savings we consider that changes of business models, with sustainable progress for humankind, represent one of the most dramatic non-energy savings consequences of ICT (green) evolution in IS/KBS. The analysis concluded that Big Data, Cloud and Analytics could be the main vectors of this transformation, but here the point we detailed is even further forecasting: how to manage the design and use of those technologies in order to leverage the generation of above mentioned green consequences by ICT/IoT. Last but not least, the analysis pointed that humankind have to beware of ICT exponential development negative consequences as “ICT dependence”, physical/intellectual activity fading and ... excessive resources consumption.

REFERENCES [1] Ke Xu et all, Toward software defined smart home, IEEE Communications, May 2016. [2] Rebecka Jarbur, Developing guidelines for green information and communication technology - (Thesis at) Dept. of computer and information sciences university of Strathclyde, September 2014. [3] *** 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/ [4] Victor Greu, Information and communications technologies go greener beyond IoT- behind is all the Earth-(Part 1), Romanian Distribution Committee Magazine, Volume 7, Issue2, Year 2016. [5] *** Internet of Things — An action plan for Europe, (PDF). COM(2009)-278 final, Commission of the European Communities -18 June 2009. [6] Kathy Pretz, A toolkit for building energy-efficient communications networks, IEEE The Institute, May 2016. [7] 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. [8] Agarwal, S. and Nath, A., A study on implementing Green IT in Enterprise 2.0, International Journal of Advanced Computer Research, 2013, pp. 43-49. [9] Vaclav Smil, Numbers don’t lie, IEEE Spectrum, May 2016. [10] 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. [11] Jacques Bughin, The digital pressures weighing on telecoms, McKINSEY Quarterly, May 2016. [12] Vinay Chamola, Biplab Sikdar, Solar powered cellular base stations: current scenario, issues and proposed solutions, IEEE Communications, May 2016. [13] 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. [14] G.Pascal Zachary, The search for a better battery, IEEE Spectrum, May 2016. [15] Brundtland, G.H., Our Common Future, 1987, Oslo: United Nations, p.34. [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] Prechi Patel, Building a more eco-friendly telecom industry, IEEE The Institute, Mar.2016. [18] Kathy Pretz, Environmentally friendly Information and Communications Technologies, IEEE The Institute, Mar.2016. [19] Mark Harris, The Internet of Trees, IEEE Spectrum, Mar.2014.


George Cosmin Tănase

The 6C Model of Social Media and Developing a V ir al Mar keting Campaigne

Abstract:

In the physical marketplace different communication tools are used in the buying process of customers. Traditional mass-communication tools (print advertising, TV and radio) can create awareness and this can result in consumers’ identification of new needs. From then on other elements of the communication mix take over, such as direct marketing (direct mail, personal selling) and in-store promotion. Unlike marketing in the physical marketplace, the Internet/e-commerce encompasses the entire ‘buying’ process. Of course, the online markets also make use of traditional mass advertising in order to get potential customers into the online buying process. Market communication strategies change dramatically in the online world. On the Internet it is easier than ever to actually communicate a message to large numbers of people. However, in many cases it is much harder for your message to be heard above the noise by your target audience.

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Keywor ds: Strategy, Marketing Mix, Integrated Marketing Communications, Potential Customers, Online Conversations, Social Sharing, Audience JEL Classification: D83, M31, M37

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Various strategies for conducting online marketing have been developed in the past several years – from the most common (website linking), to the most expensive (banner advertising), to the most offensive (email spamming), and everything in between. It is almost certain that a continual stream of new market communication strategies will emerge as the Internet medium evolves. How, then, can a Web audience be created? One of the new possibilities in this field is social media marketing. When you sell and buy you will experience that it is part of a social process. It involves not only a one-to-one interaction between the company and the customer but also many exchanges of information and influence among the people who surround the customer. Consumers are much more trusting in friends and colleagues than they are in TV advertising or corporate communication.

Word of mouth (WoM) has shown many more times more effective than traditional print advertising in impacting brand switching decisions. Word of mouth and conversations can take place off-line and online. Like any conversation in a café, the content varies. Some conversations are serious and some fun, some are short and some long, some happy and some angry and intense. In online conversations consumers’ experiences with brands and services are often openly discussed, whether companies are involved or not. In this way, consumers are becoming more powerful. Clearly, monitoring the online conversations and intervening, when appropriate, has advantages for brand managers in any B2B or B2C company. Such monitoring can lead to a better understanding of consumer behaviour and feelings of the market mood. It can lead to changes in the different parts of the marketing mix.

Social media For social media usage and development, the diversity of languages is creating communication challenges on a global basis. Facebook has 800 million weekly users, with more than 70 per cent from outside the United States. To effectively communicate with non-English users, Facebook has 70 translations available on its site, made possible by a vast network of 300,000 volunteers and translators. Facebook and Twitter are mostly interactive social media on an intimate level. As such, these platforms offer direct-selling companies means of communicating with key stakeholders (customers and distributors) in the industry. On the other hand, YouTube, with its more traditional oneway audience communication, appears to be used more effectively for recruiting consumers to become distributors of information or products. One of the ‘shooting stars’ during the last years is LinkedIn, which is a social networking website for people in professional occupations. Launched in 2003, it is mainly used for professional networking. While Facebook, YouTube and Twitter continue to dominate social media in the USA and Europe, the global scene tells a different story. In Germany, Russia, China and Japan, the most visited social networking site is not Facebook but home-grown rivals. In the old paradigm, the organisation and its agents developed the message and transmitted it to potential consumers, who may or may not have been willing participants in the communication process. The control over the dissemination of information was in the hands of the firm’s marketing organisation. The traditional elements of the promotion mix (advertising, personal selling, public relations and publicity, direct marketing and sales promotion) were the tools through which control was asserted. The twenty-first century is witnessing an explosion of Internet-based messages transmitted through these media. They have become a major factor in influencing various aspects of consumer behaviour including awareness, information acquisition, opinions, attitudes, purchase behaviour and post-purchase communication and evaluation. Unfortunately, the popular business press and academic literature offers marketing managers very little guidance for incorporating social media into their IMC strategies.

Social networking as a communication tool has two interrelated promotional roles:

1. Social networking should be consistent with the use of traditional Integrated marketing communications (IMC) tools. That is, companies should use social media to talk to their customers through such platforms as blogs, as well as Facebook and Twitter groups. These media may either be company-sponsored or sponsored by other individuals or organisations.


2. Social networking is enabling customers to talk to one another. This is an extension of traditional word-of-mouth communication. While companies cannot directly control such consumer-to-consumer (C2C) messages, they do have the ability to influence the conversations that consumers have with one another. However, consumers’ ability to communicate with one another limits the amount of control companies have over the content and dissemination of information. Consumers are in control; they have greater access to information and greater command over media consumption than ever before. Marketing managers are seeking ways to incorporate social media into their IMC strategies. The traditional communications paradigm, which relied on the classic promotional mix to craft IMC strategies, must give way to a new paradigm that includes all forms of social media as potential tools in designing and implementing IMC strategies. Contemporary marketers cannot ignore the phenomenon of social media, where available market information is based on the experiences of individual consumers and is channelled through the traditional promotion mix. However, various social media platforms, many of which are completely independent of the producing/sponsoring organisation or its agents, enhance consumers’ ability to communicate with one another.

The 6C model of social media marketing Social media sites (e.g. Facebook or Twitter) are essentially vehicles for carrying content. This content – in the form of words, text, pictures and videos – is generated by millions of potential customers around the world, and from the company’s perspective this can indeed be an inspiration to create further value for these customers.

Company and content The 6C model begins with the company and the content it creates. Basically, the Internet remains a ‘pull’ medium, in the way that firms seek to pull viewers to its content, and finally to the company itself. However, before any ‘pull’ can happen, the content has to be pushed (seeded) forward in the chain. Content can take the form of, for example, a Facebook product or brand page and/or a YouTube video pushed out to viewers. Consequently, content pushed into the social media sphere by a company acts as a catalyst for our model of engagement or participation.

Control The dashed line denoting control in the 6C model is intended to represent a wall beyond which the company passed over control of its brand to the online community and the customers. In order to accelerate the viral uptake of its brand messaging, the company sometimes gives up the digital rights and blocks in order to encourage online community members to copy, modify, re-post and forward the content. The content is intended to be copied and/or embedded into people’s websites, blogs and on Facebook walls. The key point to this stage in the process is that the company (the content creator) must be willing, and even embrace, the fact that they no longer have full control over the content: it is free to be taken, modified, commented on and otherwise appropriated by the community of interest. This may challenge the conventional ‘brand management’ wisdom stating that managers must keep control of brand image and messaging.

Community The company creates content and pushes it over the symbolic border of control to the other side, where a community of interested consumers now takes it up. At this point, communication becomes bidirectional. In its simplest form, it is reflected in the art of commenting: posting reactions, on Facebook or YouTube, to the content. In some cases the company can even learn about ‘customer behaviour’ in the market by following these online community discussions. In an ideal world, a series of reflexive conversations takes place in the community, independent of any action by the company, which will often have a passive role as an observer. When transferring the ‘content’ into the online 22

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community, the company and the content providers often try to target the market mavens, which are defined as individuals who have access to a large amount of marketplace information and who proactively engage in discussions with other online community members and customers to diffuse and spread this content. Market mavens are typically the first to receive the message and transmit it to their immediate social networks. They function as connectors or bridges between different subcultures, and their network of social hubs can facilitate immediate transmission of the content to thousands of online community members.

Customers and online conversation The ultimate expression of engagement occurs when a multitude of online conversations circle around the phenomenon and content. The 6C model distinguishes between the online community and potential customers, as the latter are usually a subset of the former. The online community may also include people who have heard of the Web-based initiative but not directly participated in it. In general, there seems to be a growing escalation in participation on the part of customers; a willingness to engage with a brand that extends beyond just purchase decisions at the point of sale.

According to the 6C model, social media further extend the conversations between marketers and customers through a feedback loop, which might happen after some online conversation (blogging etc.) in the community. After a period of online conversation the company may have chats with the online community in the hopes of influencing purchase decisions. Moreover, social media initiatives provide marketers a glimpse into the world of customer-tocustomer communication, which represents a significant extension of the more traditional advertising and word-ofmouth communication. Social media provide insights into the behaviour of non-customers too. Most social media marketers try to trigger buzz among prospective customers. This has led to social sharing, whereby online community members broadcast their thoughts and activities to strangers all over the world. This social sharing has opened the lives of individual consumers that companies can then exploit to tailor their offerings to better match preferences.

The Internet has radically changed the concept of word of mouth – so much so that the term viral marketing was coined by venture capitalist Steve Jurvetson in 1997. The term was used to describe Hotmail’s email practice of appending advertising for itself to outgoing mail from its users. In the Hotmail case, each email sent arrived with the appended message, ‘Get your private, free email from Hotmail at www.hotmail.com’.

Developing the campaign Viral marketing is by no means a substitute for a comprehensive and diversified marketing strategy. In employing viral marketing to generate peer-to-peer endorsement, the technique should not be considered as a standalone miracle worker. While the messaging and strategy ranges radically from campaign to campaign, most successful campaigns contain some commonly used approaches. These approaches are often used in combination to maximise the viral effect of a campaign. Successful viral campaigns are easily spread. The key is to get your customers to do the hard work for you by recommending your company or its promotional offers to friends and colleagues, who in turn will recommend it to their friends, and so on. An effective viral marketing campaign can get your marketing message out to thousands of potential customers at phenomenal speeds. When creating a campaign, marketers should evaluate how people will communicate the message or campaign to others.

1. Creating compelling content Creating quality content can be more expensive than simply offering a free product, but the results are often better. ‘Fun’ is often a vital part of any viral marketing campaign. The general rule of thumb is that the content must be


compelling – it must evoke a response on an emotional level from the person viewing it. This fact alone has allowed many smaller brands to capitalise on content-based viral campaigns. Traditionally, larger brands are more reserved and risk adverse to the possibility of negative reaction. Central to the success of these campaigns is one or more of the following: their entry timing (early), their visibility and the simplicity of the idea.

2. Targeting the right audience If a campaign is skewed towards a certain audience or certain regions (countries), marketers should make sure they seed towards that audience. Failure to do so may kill a campaign before it even gets off the ground. The influence and, in some cases, the power of reference groups or opinion leaders in individual decision making is significant.

3. Campaign seeding ‘Seeding’ the original message is a key component of a viral campaign. Seeding is the act of planting the campaign with the initial group, who will then go on to spread the campaign to others. The Internet provides a wide array of options for seeding, including: email/SMS; online forums (Google groups); social networks (Facebook.com, MySpace.com); chatroom environment; blogs; podcasts.

4. Controlling/measuring results The goal of a viral campaign is explosive reach and participation. To measure the success of a viral marketing campaign, establish specific and obtainable goals within a timeframe. For example, you would like to see a 20 per cent increase in traffic to a website within three months or to double your subscriber rate to an email newsletter in one year. Marketers should also be adequately prepared to meet the needs of participants in the event that the campaign is successful. Server space, bandwidth, support staff, fulfilment and stocking should be taken into consideration well in advance of campaign launch. The marketer should have the ability to capitalise on the full success of the campaign. Mass customisation is the capability, realised by a few companies, to offer individually tailored products or services on a large scale. One-to-one marketing aims to customise a product offering so carefully that it fits the customer perfectly. Both trends mean that the firm has to communicate more and more directly with customers.

Conclusion

A very important communication tool for the present and future is the Internet. Any company eager to take advantage of the Internet on a global scale must select a business model for its Internet ventures and estimate how information and transactions delivered through this new direct-marketing medium will influence its existing distribution and communication system. Social media marketing can be understood as a group of Internet-based applications that build on the foundations of the Web and then allow the creation and exchange of user generated content. Social media are particularly suited for viral marketing, as the community element in them makes it convenient to transmit the marketing message to a large group of people. Viral marketing is by no means a substitute for a comprehensive and diversified marketing strategy. However, viral marketing is a credible marketing tactic that can deliver positive results when properly executed as a component of an overarching strategic plan. Marketers should utilise viral marketing when the messaging can coincide with and support a measurable business goal.

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References [1] Karjaluoto, H., Lehto, H., Leppäniemi, M. and Mustonen, T. (2007) ‘Insights into the implementation of mobile marketing campaigns’, International Journal of Mobile Marketing [2] Silvera, D.H. and Austad, B. (2004) ‘Factors predicting the effectiveness of celebrity endorsementadvertisements’, European Journal of Marketing, 38(11/12): 1509–27 [3] Rowland, S. (2006) ‘Are you missing a B2B opportunity?’, Brand Strategy, October: 44–6. [4] Ranchhod, A. (2007) ‘Developing mobile marketing strategies’, International Journal of Mobile Marketing, 2(1). [5] Ross Jr, W.T., Dalsace, F. and Anderson, E. (2005) ‘Should you set up your own sales force or should you outsource it? Pitfalls in the standard analysis’, Business Horizons, 48(1): 23–36. [6] Mortimer, R. (2007) ‘Card of conscience’, Brand Strategy, February: 20–3.


The retail market under the pressure of the technological change Theodor PURCÄ‚REA

Abstract: Facing the danger of closing stores retailers are struggling to approach the Omni channel marketing, and innovating in using online platforms and shipping processes. Location, information, assortment, delivery, and ambience are important distribution services which represent essential outputs of the retail establishments, and are considerably impacted by the technological change, the evolution of retailing on the Romanian market, where were observed the highest increases in total retail trade among EU Member States, also confirming this considerable impact. Consumers are expecting personalization, retail personalization is transformed including with the help of the artificial intelligence, and there is a real retail marketers’ opportunity to drive increased levels of personalization thanks to improved tracking and attribution technologies across all the channels. Both retailers and CPG companies are being forced to leverage mobile technology to communicate with their targets throughout the customer journey, enhancing the overall customer experience, and CPG companies are committing to Omni channel retail as one of the identified imperatives.

Keywords: Omni channel marketing; Distribution services; Technological change; Retail personalization; Omni channel customer experience

JEL Classification: L81, L86, M31 26

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Managing the change to an Omni channel marketing approach In the last issue of this journal we underlined that 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, and in this respect they have to synchronize online and physical experience to deliver on brand promise, so as to ensure the wanted seamless, personal and relevant customer experience. And as we are witnessing a terrible battle within two “giants” of retailing, two quotes come to our mind: “There is nothing more poetic and terrible than the skyscrapers’ battle with the heavens that cover them (Federico Garcia Lorca); “In preparing for battle I have always found that plans are useless, but planning is indispensable” (Dwight D. Eisenhower). The retail marketplace is revolutionized today by Amazon, which completely disrupted the way that traditional retailers can think about doing business, battling the likes of Amazon for an online presence being a true challenge within the general context of adequately managing the change to an Omni-channel marketing approach, without such an approach retailers being exposed to the danger of closing stores. In their struggling to increase convenience behind their offerings, retailers are innovating in using online platforms and shipping processes to expedite the delivery of products to their customers, University Alliance highlighting within this context the competition between Walmart and Amazon, and showing, among others, the following aspects: Walmart is also giving now customers the gift of time (citing Walmart’s President and CEO of Global E-Commerce Neil Ashe), not only the well-known “Everyday Low Prices”), by making shopping faster and easier thanks to arranging new digital capabilities in layers over the store experience. (University Alliance, 2016) As shown by Investopedia (Hyde, 2015): (at the beginning of the last year) the strategies and systems of Walmart’s modern operations (in 10,000 retail units, with millions of associates around the world) have been built onto the original model (sales volume, scope of operation and wide customer base; supply chain management based on electronic product information, vendor role in distribution, and layout of warehouses; minimization of overhead and operational costs; leveraging of its bargaining power to force suppliers to lower prices); (at the end of the last year) facing strong competition from Amazon (now the number one retailer in America) Walmart planned to increase sales 3 to 4% annually focusing on improving the customer experience through its better paid employees (the stores becoming more welcoming places to shop), its revamped and expanded stores (the most profitable format, Walmart Supercenters), its technology (dedicating over $1 billion to its e-commerce strategies, offering consumers more shopping options: online, via an app, “click and collect” service, Shipping Pass for receiving free home delivery for products unavailable in store - about half the cost of Amazon Prime), but also focusing on investing in more efficient supply chain software and inventory management. (Page, 2015) Distribution services and technological change. Dynamic changes on the Romanian retail market It was recently recalled by Roger R. Betancourt that consumers incur a variety of costs in their interactions with the retail systems, (Betancourt, 2016) and these potential distribution or transactions costs (viewed as an output of retail firms or systems looking for producing higher levels of output by increasing, constant or decreasing returns to output) could being mapped into a set of five broad distribution services: location, information, assortment, delivery, and ambience. In contrast to the four distribution services mentioned above (which can be viewed basically as mechanisms for affecting customers’ purchasing costs with regard to time or money directly or indirectly), the last one, ambiance, is considered a distribution service affecting utility directly concerning what may be described as so-called psychic costs of interacting with the retail environment. Betancourt also showed that: spreading the fixed costs (a source of economies of scale) of providing any of the above mentioned distribution services at a higher level over a larger number of items or products offered for sale at an explicit price represents one source of increasing returns at the store level; the evolution of Walmart is one of the best examples of the process of the growth of chains in modern retailing (a multiproduct activity), as empirically identified as pattern of store expansion (viewed as a strategy of lowering the costs of providing a distribution service to itself as its own main supplier) by Thomas J. Holmes in 2011 (in terms of the substantial benefits of economies of high densities); (Holmes, 2011) the coordination costs in adding additional products and/or stores are lowered by the advances in technology (regarding inventory management, logistics and distribution) generating strategic complementarities which lead to higher rates of expansion in scale and scope for the general merchandisers (in the 60’s took place the


initial expansion of Walmart as a general merchandise retailer, while in 1988 was the introduction of the supercenter format with a full-line grocery store along the traditional general merchandise store) compared to the specialist retailers in their profit-maximizing game theoretic model; by providing consumers with information on the prices, characteristics, location and availability of products, retailers also provide an aspect of assurance of product delivery in the desired form, this kind of joint provision affecting the levels of both services which can be produced by retailers (special mention was made by Betancourt regarding the case of online channels where this joint provision affects the levels of both above mentioned services that can be produced, by limiting the ability of producing high levels of both services with respect to offline channels for sensory dependent items. It is also worth remembering, within this context, that Walmart is both the largest of the rapidly growing retailers (the expansion of large box stores and supercenters being one of the most significant changes over the past two decades in the U.S. retail market), and the biggest private employer in the world. And as Walmart when trying to build a new store often faces strong local opposition (because of increase in crime, traffic and congestion, noise and light pollution, or other negative externalities), the benefits to quick and easy access to the lower retail prices offered by Walmart were underlined and shopping at other stores as appearing to matter more to the households involved (in certain cases, due to externalities or important differences across communities in the income and preferences for accessibility and externalities stemming from Walmart, being also possible that a new store may decrease these above mentioned housing values). (Pope&Pope, 2015) Coming back to Betancourt’s approach of the distribution services it is worth mentioning his viewpoint of considering these essential outputs of the retail establishments also as fixed factors or inputs in the household production functions of consumers, the distribution services tending to be gross complements with all items in any retailers’ assortment, the consumption effects being powerful drivers toward complementarity between common distribution services and all retail items (including of other retailers in the same agglomerations), without neglecting other significant aspects, such as: the casual effect of online advertising on online and offline sales; customer satisfaction must be seen as a function of the distance between the optimal levels of distribution services demanded by retailers’ customers and the levels of the distribution services supplied by these retailers; the rapidly increase of the effects of ICT with regard to the Internet and associated technological developments on retailing, online retailing leading, for example, to greater variety of organizational forms affecting different retail sub-sectors in economically important manners, and even to the disappearance of large companies as exclusive brick-and-mortar channels; the fact that the information about a good in the online channel is: produced wherever the website is designed, distributed wherever the latter is placed in cyberspace, and consumed wherever the consumer is located when embracing retailers’ website etc. It is worth remembering, for instance, within the evolution of retailing on the Romanian market, that Cora Romania - S.C. Romania Hypermarche S.A. as part of Louis Delhaize Group - present on the Romanian market since 2003, and currently operating eleven hypermarkets in Bucharest and other major cities in our country, launched in 2013 the platform www.cora.ro (currently in Bucharest, capital city of Romania and Constanta, main port at the Black Sea), Cora becoming the first large commercial chain which proposed drive delivery type in Romania (today the network of the points coraDrive was extended to all four stores in Bucharest, while in Constanta, where two stores are located, at one of them has been recently inaugurated the online service coradrive.ro). And this should be correlated with different local aspects such as: • According to Eurostat, Newsrelease Euroindicators, 167/2016 - 5 September 2016, among European Union (EU) Member States for which data are available, the highest increases in total retail trade were observed in Romania (+13.5%), Luxembourg (+12.2%) and Lithuania (+6.2%), while decreases were observed in Malta (-2.7%), Belgium (-1.8%), Denmark (-0.8%) and Slovakia (- 0.6%); in the EU28, the 3.5% increase in retail trade volume is due to rises of 4.3% for non-food products, of 3.8% for automotive fuel and of 2.2% for “Food, drinks and tobacco”; it is known that the index of the volume of retail trade is a business indicator which measures the monthly changes of the deflated turnover of retail trade both at the level of the EU and euro area, and of individual EU Member States (as well as some candidate and EFTA countries); (Eurostat, 2016) • According to IKA Romania – RetailerAnalysis, the total current number of shops on the Romanian retail market (2,501 compared to 1,717 international retail chains stores in November 2015) per channel type 28

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is as follows: Cash&Carry – 55 (54 in November 2015); Discount Store – 385 (366 in November 2015); Hypermarket – 188 (182 in November 2015); Proximity Store – 686 (606 in November 2015); Specialized Store – 84 (80 in November 2015); Supermarket – 417 (407 in November 2015); Rural Store – 49 (22 in November 2015). Compared to the number of international retail chains stores in November 2015 (1,717 as mentioned above), there is an increase with 784 stores; (IKA.Progressive Magazine, 2016) • According to Retail&FMCG Magazine, 21 new stores were opened in Romania in August 2016, compared to 17 stores opened in the previous month; (Retail&FMCG, 2016) • According to gemiusAudience in Romania (a study measuring online audiences using its proprietary fusion methodology, proprietary site-centric data, proprietary user-centric data and structural data provided by BRAT through SNA FOCUS study), the Romanian e-commerce market knew dynamic changes in the period 2014-2016 (from around 5.3 million users for online shops in May 2014, up to 5.6 million in May 2015, and down to around 4.5 million in May 2016), noticeable differences in the structure of these online shop users being also recorded (50% of users are 25-44 old, which is a constant for the above mentioned period, but other age groups have shown big changes, such as a decrease in internet users aged 14-19 (in May 2014 e-commerce websites were visited by 57%, compared to May 2016 when it was 50%) and 45-54 (65.6% in May 2014, compared to 61.1% in May 2016), while a reverse trend is observed for users aged 3444 (55.5% in 2014, compared to 60% in May 2016); (Gemius, 2016) • A year ago, in September, data coming from gemiusAudience showed that over 5,3 million of Romanian internet users visit e-shops (61.8% reach), Top 10 online shops according to number of Real Users looking as follows: Alibaba Group – 28,75% reach; Emag.ro – 28,1% reach; Okazii.ro – 14% reach; Cel.ro – 10,7% reach; Altex.ro – 10,5% reach; Elefant.ro – 8,5% reach; Dedeman.ro – 7,8% reach; Amazon – 6,1% reach; Flanco.ro – 5,7% reach; Evomag.ro – 5,2% reach; in other words, Gemius research also revealed how popular Romanian online shops are; (Gemius, 2015) • According to the Romanian National Authority for Management and Regulation in Communications (ANCOM), the Romanian users’ mobile internet consumption doubled in the second half of last year compared to the first half of the year; (ANCOM, 2016) • On the occasion of the GPeC Summit (the Spring edition of the Most Important E-Commerce Event in Central and Eastern Europe), which took place in Bucharest on May 25-27, 2016 (850 attendees, 9 international speakers, other speakers representing top local companies such as Altex, eMAG, Google, Netopia mobilPay, Orange, Oracle, Microsoft etc.) significant aspects were highlighted, among others, such as: for the first quarter of 2016 has been registered a growth in online payments of over 60% compared to the same time period last year (according to Marius Costin, PayU); Romanian online shop eMAG focuses on the buying experience of the users updating its platform every day (according to Tudor Manea, General Manager eMag Romania); in 2 years’ time 70-80% of all online content will be video (according to Elisabeta Moraru, Industry Manager Google România) etc.; (Radu, 2016) • The seven edition of BrandRO (Biz and Unlock Market Research, 2016) showed that 15 of the top 25 brands are FMCG ones (Top 100: Gerovital, Borsec, Dero, Farmec, Elmiplant, Arctic, eMag, Poiana, Napolact, Dorna etc.), the online shop eMag occupying the seventh position (down from 6 last year), and Top Ten Retail looking as follows: eMag (7; -1), Dedeman (16; -8), Altex (25; -13); Catena (28; -2); Sensiblu (30; -5); Farmaciile Dona (33; +14); Plafar (36; -9); Flanco (45; -12); HelpNet (092; -18); (Retail&FMCG, 2016) • According to a Starcom MediaVest survey conducted in August 2016 on a sample of 2430 urban Romanian internet users, aged over 18 years, 46% of Romanian Internet users accustoms to buying online items that they need, clothes, electronics and personal care products being most being in the top of their preferences when it comes to online shopping summer, being followed by IT & C products, footwear and household appliances. (Obae, 2016)

Retail personalization transformed by artificial intelligence. Omni channel customer experience and actively engaging on potential disruptors As consumers are expecting personalization, it was recently argued that thanks to both the proliferation of big data, and the implementation of machine learning across distributed platforms retail


personalization is having a major resurgence. Within this framework, it was shown how Amazon and Netflix were ten years ago the poster children for personalization. Today, retail personalization is transformed including with the help of the artificial intelligence (AI), entire businesses of some retail organizations have been built around AI, this being the case for Stitch Fix too. So, AI-driven marketing is already a must, because marketers are enabled by AI to harness powerful algorithms in order to find patterns in internal and third-party data, looking then for repetitions in these identified patterns. Machine learning is one of the core underpinnings of AI which is transforming retail personalization, by continually adjusting the data sets “until the right marketing message for each individual shopper is presented at the moment, and through the channel that matters most”. (Alberino, 2016) And as shown by the Stitch Fix’s Chief Algorithms Officer, (Colson, 2015) the Stitch Fix styling algorithm leverages a combination of machine-learning (machines doing all the rote calculations, the results being then returned to a human stylist) and expert-human judgment (the human stylist using the cognitive abilities to do curation, to further contextualize the results, and to connect 1-to-1 with the customer). The stated goal is to combine both contributions which together can be additive and perform better than either one on their own. Stitch Fix’s Chief Algorithms Officer, who was a vice president of data science and engineering at Netflix before joining Stitch Fix in 2012, explained that the algorithm (the company got its first machine learning algorithm in 2012, but today the company has already hundreds of algorithms) used for basic criteria filtering would filter out shirts that were a large or small if a client was a medium one, and those items would be excluded if this client didn’t like the color. (Gaudin, 2016) Founded in 2011 by Katrina Lake while she was a student at Harvard Business School, Stitch Fix has benefited of a worldclass executive team with experience from major companies (including Netflix, Walmart.com, Nike and lululemon). Stitch Fix saves clients (like other online retailers) a trip to the store by shipping items directly to them, its personal stylists also saving them the time and trouble of selecting clothing and accessories, also enjoying the ease and convenience of automatically scheduled shipments that arrive at a frequency of their choosing. It currently offers pants, skirts, shorts, dresses, sweaters, shirts, outerwear, scarves, jewelry and bags, working with more than 250 established and up-and-coming labels and brands. Its average price point is $55 per item, but it carry a wide variety of prices, and when a client fills out the Style Profile (taking about 10-15 minutes), he can tell how much he is comfortable paying (if he chooses to buy all five pieces, he gets a 25% discount off of his entire purchase). In 2013, Capgemini’s Strategic Analysis Group within the Global Financial Services Market Intelligence team highlighted that integrating the online and offline channels, expanding payment options, and personalizing the online shopping experience for users are key challenges for retailers. Within this context, merchants are focusing on enhancing the user experience and providing secure ways of transacting online, partnering in this respect with both banks and non-banks to create consumer-oriented, innovative payment solutions. (Capgemini, 2013) Within this general framework of improving customer experience it is also worth recalling the important contribution brought in 2014 by Miguel Ramos (Mobile Practice Lead, Confirmit) and James Tenser (Founder, VSN Strategies) with their talk about the topic of “Digital Disruption and the Retail Experience. Earning Loyalty in the Age of Empowered Consumers”, on the occasion of a Customer experience Thought Leader Forum. They underlined the elements that define the “The New Big” (volume, velocity, variety of information; digital, connected consumers), clarifying why “Big Data” matters. Within this context of “The New Big”, James Tenser advanced the “SCAMP” model reflecting the “Five Pillars of Shopper Experience”: Service (People, Practices, Training), Convenience (Time-Saving, Effort-Saving), Ambiance (Design, Lighting, Sensory, Patrons), Merchandising (Assortment, Display, Messaging), Price (Base, Promotion, Markdown). (Ramos and Tenser, 2014) Just a year later, Genesys (eBook, 2015) recommended six best practices for a seamless omnichannel customer experience, its valuable Customer Experience Platform powering optimal customer journeys consistently across all touchpoints, channels and interactions to turn customers into brand advocates. While a Merkle’s representative argued that all digital marketers will need to be actively engaging on potential disruptors, taking into account: the challenge of the consumer’s mobile screen for a retailer, within the context of technologies like beacons, Wi-Fi and geofencing which open up new dimensions for real-time and personalized marketing (being already notable examples such as Wal-Mart with store-specific apps, and Walgreens with beacons); listening, targeting and interacting are the main areas of opportunity today with 30

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social media (Social shopping 2.0), the velocity of new social channels continuing to increase with emerging players); fast analytics (built on top of big data); retail marketers’ opportunity to drive increased levels of personalization thanks to improved tracking and attribution technologies across all the channels; marketers (either on their websites, in social media, in-store, on mobile, or integrating all of these), are now in a better position to deliver personalized Omni channel experiences that differentiate their brand). (Schottmiller, 2015)

Commitment of Consumer-packaged-goods (CPG) companies to Omni channel retail, an imperative for their growth According to Investopedia, Consumer packaged goods (CPG) are goods consumed every day by the average consumer, needing to be replaced frequently, and their market being highly competitive due to high market saturation and low consumer switching costs. Financial Times Lexicon defines CPG (also known as fast-moving consumer goods - FMCG) as goods that developed world consumers aim to replace frequently (including items such as food, soft drinks, toiletries, lower end consumer electronics goods etc.). CPG companies (one step earlier in the supply chain) are manufacturing the products sold to and that sit on the shelves of retail stores or can have retail stores (the case of fashion brands, for instance) where they exclusively sell their own products. (Chu, 2013) As Deloitte’s “Global Powers of Consumer Products 2015. Connecting with the connected consumer” report showed (the eighth annual report, which identified the 250 largest consumer products companies around the world, and included a special discussion on the importance of connecting with the connected consumers actively engaged with each other and with the marketplace), the consumer is in charge in today’s demand-driven world, and that is why consumer products companies must directly engage with consumers (critics, evangelists, curators) who increasingly own the conversation about goods and services. (Deloitte, 2015) The critical challenge for these companies, according to the above mentioned report is to create the right experience and the right engagement for consumers (as co-creators and advocates) and doing it at scale, including by creating unique customer products and services derived from crowd-based insights (the “billion-to-one” phenomenon, or B2ONE, experience). The Top 250 companies (ranked according to their fiscal 2013 net sales in U.S. dollars) have been organized, for analytical purposes, into eight major product sectors: Apparel & accessories; Electronic products; Food, drink, and tobacco; Home furnishings and equipment; Home improvement products; Leisure goods; Personal care and household products; Tires. The report also highlighted that the squeezing of margins due to commoditization has been one of the biggest challenges facing these companies in recent years, consumers often viewing these companies’ produced brands as undifferentiated from one another except on the basis of price, what was intensified by consumers’ ability of using the Internet (especially mobile devices) in order to compare prices and goods. (Deloitte, 2015) Incidentally, in the same year it was shown that: as the result of digital advancements, of the mobile technology and of the explosion of social media, the retail & CPG landscape and shopper behavior eloquently changed, both retailers and CPG companies being forced to leverage mobile technology to communicate with their targets throughout the customer journey, enhancing the overall customer experience; (Jain, 2015) in the CPG sector are now occurring some of the most innovative experiments in e-commerce (Amazon Pantry, Prime Now, Dash Button, “click and collect” pilots of the regional grocers, Campbell’s customized soup packages for millennial shoppers etc.), the sudden acceleration in CPG e-commerce being driven by the emergence of mobile devices for Internet access (CPG categories being particularly popular for digital consumers); CPG companies are working extensively with retailers to ensure they receive prime digital shelf space on retailers’ websites, and are focusing on Omni channel marketing campaigns that actively incorporate social-media monitoring for insights about consumer preferences; a road map for CPG companies’ success (companies emerging as winners in e-commerce) involves engagement in three practices: building strong account-management teams to serve strategic retail partners, developing next-generation e-category management, and building their Digital Quotient; (Alldredge, Newaskar, and Ungerman, 2015) to build up their Digital Quotient® (DQ™ - an assessment to measure an organization’s digital maturity and capabilities and to examine how they drive financial performance), CPG companies need rethinking their business’s strategy, organization, capabilities, and culture. And as shown in August this year by other McKinsey’s representatives, the actual belief of the


CPG companies is that e-commerce (Amazon’s continued growth in particular; second place in 2016 being occupied by the demographic shifts, which were the top response in the 2014 survey) will be the top driver of change over the next five years (that is why companies are partnering closely with Amazon, in Amazon’s offices 29% of winners collocating account teams, while 14% plan to do the same within two years). This idea was introduced within the context of highlighting the best practices in customer and channel management (according to McKinsey’s 2016 survey of North American companies the gap between winners and others in sales strategy, for example, narrowing significantly), starting from the challenges faced by CPG companies today, such as value-conscious consumers with fast-changing needs, and intensified cost pressure due to retailer consolidation and the rise of hard discounters. Committing to Omni channel retail is according to the recent McKinsey’s survey one of the fourth identified imperatives (alongside identifying pockets of growth and align resources against them, overinvesting in “power partnerships” with the most important customers, and taking a data-driven approach to revenue-growth management). (Alldredge, Henry, Lowrie, and Roch, 2016) The findings of the recent McKinsey’s survey mentioned above reveal very interesting aspects, such as: most winning companies (those that outperform peers in categories in which they compete) plan to increase investment in multichannel grocery, mass, or drug retailers (placing bets on sites beyond Amazon such as Walmart.com and Kroger.com); half of these companies (but only 7% of others) plan to increase investment in online or multichannel category specialists (such as Diapers.com3 and Sephora.com), also using their own e-commerce-enabled websites in order to enhance consumer experience, strengthen brand presence, collect data and develop insights, and test new products and promotions. And in order to better understand online shoppers these winners obtain and analyze more data from online retailers as shown in the figure below, allocating 2.4 times more employees to online sales than others do (the cited McKinsey’s article being based on the above mentioned recent report suggestively entitled “A tight race in consumer packaged goods: How to win with big data, tools, and insights”).

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Figure 1: Winners obtain and analyze more data from online retailers, helping them better understand online shoppers Source: Alldredge, K., Henry, J., Lowrie, J. and Roch, A., Winning in consumer packaged goods through data and analytics, McKinsey & Company, August 2016, p. 5, retrieved from: http://www.mckinsey.com/industries/consumer-packaged-goods/ourinsights/winning-in-consumer-packaged-goods-through-data-and-analytics?cid=other-eml-alt-mip-mck-oth-1608

Instead of conclusions Just after starting writing our conclusions we find out thanks to Total Retail Report three interesting news, one about Amazon.com’s algorithms, one about the shining light at the end of the tunnel (the yearend) for retailers (the holiday season), and the last one about the steps to grow the long-term omnichannel capabilities taken by PetSmart, the largest specialty pet retailer in North America: ▪ Amazon.com’s algorithms encourage customers to pay more than they need to for products, according to a report of ProPublica, the findings indicating that Amazon’s own products are placed (even if they aren’t the cheapest) in the prominent “Buy Box” almost three-quarters of the time, which means that a consumer would have paid for everything recommended by Amazon’s “Buy Box” with 20% more than if he had bought the same products at the lowest price on the retailer’s platform; Total Retail wanted to clarify that: Amazon insists that its algorithms don’t favor itself (selling products directly itself and encouraging brands to use its platform as well), the criteria to enter into the “Buy Box” including price, seller rating and geolocation; just like Google and Facebook, Amazon uses hidden algorithms to govern consumers’ online interactions; (Taylor, 2016) ▪ Beyond the robust optimism of retailers (according to new research from First Insight and Fung Global


Retail and Technology) about the upcoming holiday season, it is recommendable (in the opinion of the founder of a technology company delivering what is now the world’s leading predictive analytics platform for consumer-testing new products) for many of them to continue to address necessary changes by revamping e-commerce practices (such as Walmart has done with the acquisition of Jet.com) or by investing in big data technologies to help with inventory, assortment etc.; (Petro, 2016) ▪ PetSmart announced that in order to allow its customers to shop and engage how, when and where they wish, it will leverage Demandware’s Commerce Cloud platform, PetSmart’s new Omni channel strategy allowing, for example, in-store shoppers enjoying the convenience of shipping their pet essentials directly to their homes, or pick up their orders at their nearest PetSmart location. (Knight, 2016) Besides, as we have learned from Demandware’s Press Release (September 1, 2016), PetSmart (which has more than 53,000 associates and more than 1,450 pet stores in the United States, Canada and Puerto Rico) selected Demandware because of its leadership in the ecommerce space (Demandware, a Salesforce company, is the category-defining leader of enterprise cloud commerce solutions), the Demandware Commerce Cloud (powered by a unified promotion and personalization engine) streamlining retail operations from customer attraction to conversion, and providing a full range of capabilities that leverage a shared view of key retail. Built for large and fast-growing volumes of digital commerce, Demandware Commerce Cloud empowers retailers with comprehensive customization, scalability and performance that organizations require for successful Omni channel retailing and enterprise ecommerce, its architecture including a runtime environment, application centers, and core functions. This Demandware Commerce Cloud brings together digital commerce, order management, point-of-sale, store operations and intelligent personalization into a single cloud platform (as shown in the figure below), (Demandware, 2015) enabling digital commerce teams to deliver a superior digital experience in every channel (online, mobile, social, and in-store), taking advantage, for instance, of open commerce APIs to easily and quickly integrate custom capabilities and applications (that will engage consumers with innovative and personalized digital experiences), unifying the physical and digital experience by bringing all channels together to support a single customer experience, and all this because of a shared data and service model that can be leveraged across all direct interaction channels.

Figure 2: The Demandware Commerce Cloud Platform Architecture, and Comprehensive Point-of-Sale and In-Store Operations Delivered Through the Cloud Source: Adapted from The Demandware Commerce Cloud, 2015 Demandware, Inc., pp. 7, 11, www.demandware.com/uploads/ resources/Brochure_ProductBrochure_ENG.pdf

There is no doubt that the evolution of the modern retail trade in Romania will also continue to 34

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be spectacular, a continuous progress being necessary in what concerns adapting to the above highlighted trends, and developing a deeper understanding of the decision journey that the new shoppers undertake.

References Alberino, C., How artificial intelligence is transforming retail personalization, Sept. 16, 2016, retrieved from: http://www. retailcustomerexperience.com/blogs/how-artificial-intelligence-is-transforming-retail-personalization Alldredge, K., Newaskar, P. and Ungerman, K., The digital future of consumer-packaged-goods companies, October 2015, retrieved from: http://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-digital-future-of-consumerpackaged-goods-companies Alldredge, K., Henry, J., Lowrie, J. and Roch, A., Winning in consumer packaged goods through data and analytics, McKinsey & Company, August 2016, retrieved from: http://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/winning-inconsumer-packaged-goods-through-data-and-analytics?cid=other-eml-alt-mip-mck-oth-1608 Betancourt, R.R., Distribution Services, Technological Change and the Evolution of Retailing and Distribution in the 21st Century, in “Handbook on the Economics of Retailing and Distribution”, Edited by Emek Basker, Department of Economics, University of Missouri, USA, Edward Elgar Pub, March 29, 2016, Part I: Development (4), pp. 74-83. Chu, W., What is the difference between retail and CPG? 2 Feb 2013, retrieved from: https://www.quora.com/What-is-thedifference-between-retail-and-CPG Colson, E., How does the Stitch Fix algorithm work? Updated 15 Sep. 2015, retrieved from: https://www.quora.com/How-doesthe-Stitch-Fix-algorithm-work Gaudin, S., At Stitch Fix, data scientists and A.I. become personal stylists, May 6, 2016, retrived from: http://www. computerworld.com/article/3067264/artificial-intelligence/at-stitch-fix-data-scientists-and-ai-become-personal-stylists.html Hyde, R., How Walmart Model Wins With “Everyday Low Prices”, January 18, 2015, retrieved from: http://www.investopedia. com/articles/personal-finance/011815/how-walmart-model-wins-everyday-low-prices.asp Holmes, T.J., The diffusion of Wal-Mart and economies of density, Econometrica, Vol. 79, No. 1 (January, 2011), 253–302, DOI: 10.3982/ecta7699, retrieved from: http://users.econ.umn.edu/~holmes/papers/ecta7699.pdf. Jain, N., Consumer Packaged Goods (CPG) Industry - 5 Digital Transformations, May 23, 2015, retrieved from: https://www. linkedin.com/pulse/consumer-packaged-goods-cpg-industry-5-digital-nitin-jain Knight, T., PetSmart’s New Omnichannel Strategy, Total Retail Report, September 22, 2016, retrieved from: http://www. mytotalretail.com/article/petsmarts-new-omnichannel-strategy/#utm_source=total-retail-report&utm_medium=newsletter&utm_ campaign=2016-09-22&utm_content=petsmart%27s+new+omnichannel+strategyObae, P., Ce clipuri căutăm pe net? Cât și cum stăm online? Date de citit despre cum ne uităm la video pe net și nu numai. Un studiu Starcom, 19.09.2016, retrieved from: http://www.paginademedia.ro/2016/09/ce-clipuri-cautam-pe-net-cat-si-cum-stamonline-date-de-citit-despre-cum-ne-uitam-la-video-pe-net-si-nu-numai-un-studiu-starcom Page, V., Wal-Mart Plans To Increase Sales 3 to 4% Annually, December 1, 2015, retrieved from: http://www.investopedia.com/ articles/investing/120115/walmart-plans-increase-sales-3-4-annually.asp Petro, G., 2016 Holiday Retail Expectations: A Surprisingly Sunny Outlook, Total Retail Report, September 23, 2016, retrieved from: http://www.mytotalretail.com/post/2016-holiday-retail-expectations-surprisinglysunny-outlook/#utm_source=total-retail-report&utm_medium=newsletter&utm_campaign=2016-09-23&utm_ content=2016+holiday+retail+expectations%3A+a+surprisingly+sunny+outlookPope, D.G., Pope, J.C., When Walmart comes to town: Always low housing prices? Always? Journal of Urban Economics 87 (2015), http://dx.doi.org/10.1016/j.jue.2014.10.004 0094-1190/2014 Elsevier Inc., pp. 1, 13. Radu, A., Over 850 attendees at GPeC Summit May 2016 – The Most Important E-Commerce Event in CEE, GPeC Blog, 30 Mai 2016, retrieved from: http://www.gpec.ro/blog/en/category/gpec-news Ramos, M. and Tenser, J., Digital Disruption and the Retail Experience. Earning Loyalty in the Age of Empowered Consumers, March 20, 2014, Customer experience Thought Leader Forum Sponsored by Confirmit, cited by Purcarea, T., in “Expo Milano 2015, TUTTOFOOD 2015, and SHOP 2015”, Romanian Distribution Committee Magazine, 2015, Volume 6, Issue 1, p. 26. Schottmiller, P., Digital Disruptors for Retail Marketers in 2015, Retail Online Integration, February 20, 2015, cited by


Negricea, C.I., Purcarea, I.M., in “Digital Marketing, Digital Disruption, and the New Rules of Digitization”, Holistic Marketing Management Journal, 2015, Volume 5, Issue 1, p. 16. Taylor, K., Amazon Promotes Own Products, Customers Pay More, Total Retail Report, September 22, 2016, retrieved from: http://www.mytotalretail.com/article/amazon-promotes-products-customers-pay/#utm_source=total-retail-report&utm_ medium=newsletter&utm_campaign=2016-09-22&utm_content=amazon+promotes+own+products%2C+customers+pay+more*** University Alliance, Retail Restructuring: Managing Change in the Age of Amazon, Michigan State University, 2016, http:// www.michiganstateuniversityonline.com/resources/supply-chain/restructure-retail-for-supply-chain/?utm_source=total%20 retail&utm_medium=display&utm_campaign=scm&campaignid=701610000007Jrz&vid=2120423

*** Cora, https://www.cora.ro/noutati-cora/cora-corporate/despre-grupul-louis-delhaize

*** Cora, https://www.cora.ro/noutati-cora/cora-corporate/comunicate-de-presa

*** Eurostat, Newsrelease Euroindicators, 167/2016 - 5 September 2016, retrieved from: http://ec.europa.eu/eurostat/ documents/2995521/7605846/4-05092016-AP-EN.pdf/7374d696-32dd-44a8-aed3-985a7ce424aa

*** Eurostat, Retail trade volume index overview, July 2016, http://ec.europa.eu/eurostat/statistics-explained/index.php/Retail_ trade_volume_index_overview *** IKA Romania – RetailerAnalysis, http://ika.magazinulprogresiv.ro/index.php/retailerAnalysis/index

*** Retail&FMCG, Situația magazinelor deschise de retailerii alimentari din România în luna august 2016, retrieved from: http://www.retail-fmcg.ro/retail/retail-fmcg-magazine-deschise-august.html

*** Gemius, Romania: Who shops online, and where? July 12, 2016, retrieved from: https://www.gemius.com/all-reader-news/ romania-who-shops-online-and-where.html

*** Gemius, Romania: the most popular online shops, December 22, 2015, retrieved from: https://www.gemius.com/e-commercenews/romania-the-most-popular-online-shops.html

*** ANCOM, Un român apelează în medie 251 minute lunar de pe telefonul mobil, 23.02.2016, retrieved from: http://www. ancom.org.ro/un-roman-apeleaza-n-medie-251-minute-lunar-de-pe-telefonul-mobil_5521 Radu, A., Over 850 attendees at GPeC Summit May 2016 – The Most Important E-Commerce Event in CEE, GPeC Blog, 30 Mai 2016, retrieved from: http://www.gpec.ro/blog/en/category/gpec-news

*** BrandRO 2016, a 7-a editie, 13 septembrie 2016, http://revistabiz.ro/brandro2016/ Retail&FMCG, Cum arată top 100 cele mai puternice branduri românești, Septembrie 2016, retrieved from: http://www.retailfmcg.ro/servicii/studii-de-piata-servicii/top-100-branduri-romanesti.html

*** https://www.stitchfix.com/about

*** https://support.stitchfix.com/hc/en-us/articles/204222994-FAQ

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*** Capgemini, Evolving E-Commerce Market Dynamics. Changing Merchant Payment Needs and the Impact on Banks, Capgemini’s Strategic Analysis Group within the Global Financial Services Market Intelligence team, 2013, p. 3, retrieved from https://www.capgemini.com/resource-file-access/resource/pdf/evolving_e-commerce_market_dynamics.pdf

*** Genesis, Best practices for a seamless omnichannel customer experience, eBook, 2015, cited by Negricea, C.I., Purcarea, I.M., in “Marketers, challenged to meeting digital priorities”, Holistic Marketing Management Journal, 2015, Volume 5, Issue 4, p. 11.

*** Consumer Packaged Goods – CPG, http://www.investopedia.com/terms/c/cpg.asp

*** Definition of consumer packaged goods CPG, http://lexicon.ft.com/Term?term=consumer-packaged-goods-CPG

*** Deloitte. Global Powers of Consumer Products 2015. Connecting with the connected consumer, retrieved from: http://www2. deloitte.com/global/en/pages/consumer-business/articles/gobal-powers-of-consumer-products.html

*** Deloitte. Global Powers of Consumer Products 2015. Connecting with the connected consumer, pp. 6-7, 9, 19, 35, 59, retrieved from: file:///C:/Users/Internet/Downloads/gx-cb-global-powers-cons-products-2015.pdf

*** What does it take to win in Digital? Retrieved from http://www.mckinsey.com/business-functions/digital-mckinsey/how-wehelp-clients/digital-quotient report&utm_medium=newsletter&utm_campaign=2016-09-22&utm_content=petsmart%27s+new+omnichannel+strategy-

*** Demandware, Press Release, PetSmart Enables OmniChannel Strategy, Unifies the Customer Shopping Experience with the Demandware® Commerce Cloud, 09.01.2016, retrieved from: http://investors.demandware.com/phoenix. zhtml?c=247632&p=irol-newsArticle&ID=2198773

*** Demandware, Only cloud commerce lets you keep pace with consumers and outpace the competition, http://www. demandware.com/cloud-commerce

*** Demandware, The Demandware Commerce Cloud, 2015 Demandware, Inc., pp. 3-4, 7, 10-11, retrieved from: http://www. demandware.com/uploads/resources/Brochure_ProductBrochure_ENG.pdf


Léon F. WEGNEZ (by courtesy of) - Better involving consumers in product design, “Distribution d’aujourd’hui” 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, Juillet 2016, Brussels.

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50 years EuroShop, Status World Food Preservation Center, Strengthening Africa and CIRCLE PhD Seminar Bernd HALLIER

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 third quarter of 2016, and allowed us to present them.


50 years EuroShop On July 28, 2016, European Retail Academy (ERA, founded at the EuroShop 2005 as a link to Academia) remembered us that the Exhibition Centre Düsseldorf, Germany and the Institute for Self-Service/today EHI Retail Institute signed in 1964 a contract to promote together self-service and shop-fitting jointly under the logo “EuroShop” Exhibition. Two years later, in 1966, the first trade-show EuroShop was run covering an area of 19,500 square meters. Today EuroShop is the World’s No. 1 Exhibition for shop fitting, in-storeelectronics, security-systems and POS-Marketing. It covers 110,000 square meters net: the next triannual show will be in 2017. Its annual special EuroCIS meanwhile has 10,000 square meters for store-techniques and will be integrated in the 2017 EuroShop Exhibition.

Status World Food Preservation Center (WFPC) On August 20, 2016, European Retail Academy informed us that The World Food Preservation Center (WFPC) now has 21 Agricultural Universities covering all six continents to teach measures against food waste. The first WFPC-Food Waste Conference for Africa will take place in Nairobi/Kenya at the end of March 2017. WFPC promoted its first PhD student (coming also from Africa), Dr. Gustav Mahunu from Ghana, who was directed by Prof. Hongyin Zhang from the Jiangsu University/China.

Top Retailers Asia European Retail Academy let us know on August 1, 2016, that Andrew Yeo, publisher of Retail Asia (covering 14 Asian territories) invited retail experts for the traditional Top 500 Award Ceremony and Gala Dinner to Singapore. Retail Asia together with Euromonitor International and KPMG continued their survey of the best of the best in Asia. Additionally an international jury is examining how the best retailers have overcome the present challenges and by what strategies they should seize the upcoming opportunities. It was also announced that the “Retail Revolution” Forum will be held together with the Gala for the award-winners on October 28, 2016

Strengthening Africa On September 1, 2016, we also find out that as a Master of Art Therapy and member of the International Club of Artists (IKV), Marie-Christin Hallier, whose way of artistic expression is wellknown (please see “Antikomposition Kosmos” – 10 x 2 meters – at Alanus University, Bonn, Germany) will support (according to the news released by the European Retail Academy) together with her IKVcolleagues the First African Food Waste Conference on March 27th-30th, 2017 in Nairobi, Kenya by an exhibition about Food Waste to create awareness and the offer to have some joint workshops with the local community. Five years ago, in 2011, Marie-Christin Hallier (mariechristinhallier.wordpress.com) was in South Africa among of nine Bachelor-students of the Alanus University to work in a multi-color project with underprivileged children.

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CIRCLE PhD Seminar In the middle of the month of September this year European Retail Academy let us know that an obligatory part of PhD program at the Virtual College CIRCLE International (housed at the University of Vitez, BH) is the completion of oral comprehensive examination and defense of the thesis proposal in front of the committee. This year the CIRCLE PhD Seminar took place in Bosnia and Herzegovina, which offered participants a great travelling opportunity to Balkans. Alina Pukhovskaya, for instance, visited the PhD Seminar in Vitez and shared some impressions from the trip: “Bosnia and Herzegovina due to its geographical location had been repeatedly involved in major historical events such as the World War I (assassination of Archduke Franz Ferdinand of Austria in Sarajevo) and the World War II (multi-ethnic resistance groups lead by Josip Broz Tito). Also it had been under the influence of different empires – Ottoman and Austro-Hungarian – and never lost itself but adjusted, taking the best out of the new cultures. However, the Bosnian War (1992–1995) caused so much pain and destruction that up to today every detail brings back the memories of the terror. Both photos are taken in the same city Mostar, which combines beautiful (renovated) old city and bombed business center.”


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