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EDITORIAL BOARD

Romanian Distribution Committee Magazine

Volume: 7 Issue: 4 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 2017 (2) 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: 4 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

PAGE 8. Editorial: Setting up the Right Organizational Support so as to Offer Consumers the Right Time, the Right Content, and the Right Experience Theodor Valentin PURCĂREA

PAGE 10. Developing Information and Communications Technologies with More Artificial Intelligence,Using Artificial Intelligence, When Internet of Things is “Intelligence Everywhere” -Part 1Victor GREU

PAGE 20. The Virtual Value Chain and Experiential Marketing George Cosmin TĂNASE

PAGE 24. Retail in the Era of Omni Channel Marketing Theodor PURCĂREA

PAGE 32. (by courtesy of) - The Convenience of Purchases: An Absolute Requirement of the Consumer to Favor his Free Time, initially published in the prestigious “Distribution d’aujourd’hui”, 57ème année, November 2016

Léon F. WEGNEZ

PAGE 36. (by courtesy of) - ERA Hall of Fame 2012-2017, TOP 500 Retail Asia-Pacific, CZ-Summit 2017, Post-Harvest Congress, SCM-ECR Laboratory, and Meeting Innovation

Bernd HALLIER


EDITORIAL: SETTING UP THE RIGHT ORGANIZATIONAL SUPPORT SO AS TO OFFER CONSUMERS THE RIGHT TIME, THE RIGHT CONTENT, AND THE RIGHT EXPERIENCE

A year ago, in December 2015, we spoke about the magic of growth, the new business models offered by the “crowdsourcing economy” and building trusted innovation, taking finally the usual look at the (that time) 15th annual Edelman Trust Barometer. Allow us to start this time by having a short look at the 16th annual Edelman Trust Barometer, and to underline just three aspects revealed at the beginning of this year within this framework: the increasingly reliance of respondents on a “person like yourself”; technology remains the most trusted industry (for the sixteenth consecutive year); the support of companies’ employees and passionate customers is essential as business can be a big part of the solution (as shown by the global practice chair of Edelman’s Corporate practice). Approaching the end of this year, within the context of the current general business challenges, allow us to highlight that according to McKinsey’s representatives, in setting up the right organizational support to act on the findings (after aggregating and analyzing data) companies need IT expertise, domain expertise, advanced analytics, and change management, then necessary consistency and maximum impact being ensured by progressing methodically process by process, opportunity by opportunity. (Feldmann, Hammer, Somers, and Van Niel, 2016) Because businesses are transformed step by step, including at the level of consumer-facing industries, we all being witnesses of the continuous dialogue around IoT, industry 4.0, advanced analytics, digital technologies, and big data. One of the processes considered highly useful in developing in the workplace is the so-called “360-feedback”, which allows employees to openly communicate feedback with each other, being necessary, of course, to be implemented properly as an ongoing process. (Maier, 2016) Which involves communicating properly with staff on the purpose (making sure this purpose is clear) and any changes occurring in the workplace (ongoing conversation), making it a daily practice (people being properly

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trained to use this tool), having a distinguished line between what is anonymous and what isn’t, not forgetting in the same time to use feedback tools alongside continuous face-to-face conversations to further engage people in this process, and ensuring follow-up, the reviews being acted on accordingly. We all agree that today’s children are tomorrow’s consumers. Three years ago, in 2013, a survey (believed to be the first to involve both children and parents, and commented in Telegraph, UK) by parenting site Netmums.com (whose co-founder questioned 825 children aged seven to 16 and 1,127 parents) revealed that one in seven under-16s spend four hours or more glued to the screen. (Ward, 2013) According to Global Kids Online Research Synthesis 2015-2016 (Byrne, Kardefelt-Winther, Livingstone, Stoilova, 2016) children represent a substantial percentage of internet users, and play an important part in shaping the internet (which is an important part in shaping children’s lives, culture and identities). A year ago, the futurist, demographer, and TEDx speaker Mark McCrindle (McCrindle, 2015) - who coined in 2005 “Generation Alpha”, anyone born after 2010 being part of this Generation having the ability to transfer a thought online in seconds - showed that 2.5 million Alphas are born around the globe every week. (Sterbenz, 2015) In December this year, a Forbes contributor argued that this generation is both more likely to grow up overindulged, and the most materially endowed and technologically literate generation to date. (Carter, 2016) But no matter of what generation consumers are, they need the right time, the right content, and the right experience. That is why, in looking at the consumers decision journey companies need: ▪ (paraphrasing a Customer Service Speaker and Expert) to take a look at how Amazon competes by broking out of the low price and big selection game with convenience, saving time and making life easier for their customers (Amazon Prime program, distribution centers and so on), proving speed and simplicity (Hyken, 2016); ▪ (paraphrasing a Head Content Marketer) to know (from a viewpoint of contextual marketing) their consumers to be able to connect on their level; to find the right message (the “what” of the equation) and the right time (the “when” of the equation), considering contextual touch points; to find the right technology (the ever-important “how” part of the equation); (Bogdan, 2016) ▪ (paraphrasing a Director of Customer Experience at a leading CX firm) to start with a close understanding of consumers’ well-being, then to start to emotionally engage them, putting emotion back into CX. (Walden, 2016)

Theodor Valentin Purcărea Editor - in – Chief

References Bogdan, A., A Guide to Contextual Marketing, November 2, 2016, available at: http://www.marketingprofs.com/articles/2016/31018/a-guide-to-contextual-marketing? Byrne, J., Kardefelt-Winther, D., Livingstone, S., Stoilova, M. (2016). Global Kids Online Research Synthesis, 2015-2016. UNICEF Office of Research Innocenti and London School of Economics and Political Science, pp. 6, 82 Carter, C., The Complete Guide To Generation Alpha, The Children Of Millennials, Forbes, December 2016, available at: http://www.forbes.com/sites/christinecarter/2016/12/21/the-complete-guide-to-generation-alpha-thechildren-of-millennials/#7e5a41785452 Feldmann, R., Hammer, M., Somers, K., and Van Niel, J., Buried treasure: Advanced analytics in process industries, December 2016, available at: http://www.mckinsey.com/business-functions/operations/our-insights/buriedtreasure-advanced-analytics-in-process-industries?cid=analytics-alt-mip-mck-oth-1612 Hyken, S., A Big Trend in Customer Experience (CX): Convenience, Jul 7, 2016, available at: http://customerthink.com/a-big-trend-in-customer-experience-cx-convenience/ Maier, S., Here’s How To Avoid The Most Common Mistakes With 360 Feedback, November 11, 2016, available at: https://www.eremedia.com/tlnt/heres-how-to-avoid-the-most-common-mistakes-with-360-feedback/ McCrindle, M., Gen Z and Gen Alpha infographic update, February 04, 2015, available at: http://mccrindle.com.au/the-mccrindle-blog/gen-z-and-gen-alpha-infographic-update Sterbenz, C., Here’s who comes after Generation Z — and they’ll be the most transformative age group ever, Dec. 5, 2015, available at: http://www.businessinsider.com/generation-alpha-2014-7-2 Walden, S., Add Emotion to Customer Experience by considering Well-Being, Oct 4, 2016, available at: http://customerthink.com/add-emotion-to-customer-experience-by-considering-well-being/ Ward, V., Children using internet from age of three, study finds, 01 May 2013, available at: http://www.telegraph.co.uk/technology/internet/10029180/Children-using-internet-from-age-of-three-study-finds.html

*** 2016 Edelman Trust Barometer Finds Global Trust Inequality is Growing, Press Release, January 17, 2016, available at: http://www.edelman.com/news/2016-edelman-trust-barometer-release/


Abstract DEVELOPING INFORMATION AND COMMUNICATIONS TECHNOLOGIES WITH MORE ARTIFICIAL INTELLIGENCE, USING ARTIFICIAL INTELLIGENCE, WHEN INTERNET OF THINGS IS “INTELLIGENCE EVERYWHERE” -PART 1Victor GREU

The paper is approaching the systemic analysis of the emergency of advanced artificial intelligence (AI) systems and generally of AI in the context of Information and Communications Technologies (ICT) exponential evolution and proliferation, as main driving factor of the transformation of the Information society (IS) toward Knowledge Based Society (KBS). The paper analysis presents the AI premises to be a potential revolutionary step in ICT development, having, naturally, challenges of the same scale, because of the complex convergence of the state-of-the art AI technologies with Internet of Things (IoT) networks (IoT is “intelligence everywhere”!) and Big Data, applying with exponentially pace/performance at Earth scale. Security, ethical, moral or legal rules are identified as the prominent challenges of the exponential pace/performance and planetary expansion of AI/ICT, addressed to humankind in IS toward KBS on Earth. Among the challenges, security is first, because the benefits of the AI/ICT progress have got such a huge level and horizontal expansion in autonomous systems and processes, as our lives depend dramatically on their reliable and safe operation .Consequently, the solution is not to stop AI/ICT progress, but to use our actual intelligence and refined knowledge in order to‘’build robots we can trust’’ and generally ICT we can trust.From security point of view,

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developing ICT with more artificial intelligence, using artificial intelligence could create sensible risks against the essential requirements on ethical, moral or legal rules. In detail, the analysis confirms that in the (actual or next) stage of AI/ICT development we can lose the safe limit of control for AI, when imbedded ‘’intelligence’’ (as performance and technology level) is pushing us to think that we can trust in higher or total (100%) autonomy of the new AI systems only because the technology can support that (level of autonomy)! Paper proposition is that the essence of “fight” (against advanced AI vulnerabilities) strategy has to be the plenary use of the only (long term) advantage human could have over AI (machine): the imagination potential. Consequently, when developing advanced AI/ICT (especially advanced robots), we have to use the most advanced refined knowledge plus our imagination maximum potential, aiming with priority two main objectives. First we must be sure that human subjective criteria are cleared (know yourself) by refined knowledge based on security, ethical, moral or legal rules. Then, analyse all possible scenarios of “fight” (against advanced AI vulnerabilities). Technically we can win the “fight” (against advanced AI vulnerabilities) only if applying the advantage of using similar refined knowledge, but exceeding by human (unlimited) imagination the analysis advanced AI could perform based on learning processes it could have passed. The analysis concludes with the crucial importance of models and algorithms the specialists could use to apply the more and more performant available technology, because this amazing AI/ICT performance and proliferation at planetary scale are the main premises to create functional vulnerabilities (risks) unless backing solutions to timely compensate them are provided by appropriate models and algorithms.

Keywords: advanced artificial intelligence, autonomous systems and processes, Internet of Things, Big Data, information society, knowledge based society, autonomous weapons.

JEL Classification: L63; L86; M15; O31; O33 1. The complex expansion of AI, IoT and Big Data in Information Society toward Knowledge Based Society

Speaking about intelligence is a very exciting issue, but not only for the modern approach of human capacity, as from ancient times we may quote Socrates [19]: “I know that I am intelligent, because I know that I know nothing”. The chosen of Socrates modest evaluation for starting our analysis is not random, as it has a double significance. First of all, it is a relevant opinion on main theme, but then it reveals the crucial role of refining knowledge. More than these and our days more than ever, it amplifies and gives basics to the well known [19] Descartes thinking on methodical doubt: “Dubito, ergo cogito, cogito, ergo sum”. This way we have just arrived to paper title essence, as speaking about artificial intelligence (AI) we have to carefully, although shortly, analyse what intelligence could be and ... become! We are in the middle of such deep meditations because we have to also recognize that any progress must consider the past achievements, as Isaac Newton suggested in 1676 [19]: “If


I have seen further, it is by standing on the shoulders of giants”. For sure, a clear and concrete direction for analysis and action was brilliantly given by

Albert Einstein [19]: “The true sign of intelligence is not knowledge but imagination”. What could be more useful than imagination in our days when Information and Communications Technologies (ICT) pushed the Information society (IS) on a such high and complex evolution toward Knowledge Based Society (KBS), when speed, performance and proliferation seem to have no limits, but only imagination brings our feet on ground to see Earth resources fading and our intelligence limits, for having further the chance of finding the appropriate ... intelligent solutions for the humankind future and a sustainable progress. So we have the main pillars for approaching AI starting from what human intelligence should be today. To be more clear, considering the emergent huge proliferation of IoT as “intelligence everywhere”, we have to be sure that developing ICT with more artificial intelligence , that intelligence it will be based on the intelligence human kind should have on today’s Earth. One could ask why we should doubt that people’s intelligence is today on the right track, as this intelligence is creating ubiquitous amazing ICT products and services. As we have already presented [9][2][5][12], the exponential pace, the progressive complexity and planetary expansion of ICT implications in all human activities and achievements have unfortunately negative consequences too. Anyway, it is well known that the optimization of such complex and complicate processes and systems, as our World includes today, is almost impossible, taking into account, among other, just the difficulty to harmonize the optimization criteria [16]. This does not means that the ICT development could be done exclusively by commercial criteria. Now it is easy to understand the necessity to approach AI, as one of the most important challenges of the ICT exponential evolution in IS on the complex road toward KBS, a potential revolutionary step in ICT development. After these theoretical premises, the analysis could become more concrete and relevant by presenting some actual trends/examples of AI development in the general context of ICT. Perhaps 20 years (or so) ago, it was simpler to give some examples of AI main domains, as expert systems, robots, war games or similar, but it is worth to mention that the intelligence level was also “simpler”. On the other hand it was natural to imagine that the ICT huge performances and exponential pace will push the AI also beyond incredible limits, although we have to recall that Karel Capek introduced the term robot since 1920 [3]. Our paper point is how the AI development must be managed to provide a safe and sustainable progress of AI/ICT products and services, including IoT, in the frame of IS/KBS, by timely analyzing and designing/controlling that “incredible limits”. In order to achieve such complicate and difficult aim it is supposed to use the appropriate human intelligence potential. The actual dramatic challenge for this aim is the fact that today IA reached such high level to compete sometimes human intelligence [20], as surgeons work “in tandem” with surgeonrobots [1]. 12

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To completely cover the paper title background we have to mention, [3] [8], that actual AI systems could write articles (or line of codes for software), optimize integrated circuit design, auto configure ICT networks, drive autonomous cars, behave as personal assistant robots or as ... war killers robots etc. As a matter of fact, all the above mentioned fields/examples are not the latest news, because they represent AI trends developed in the last decade (or so), now on different stages of evolution with high performance perspective. The most prominent consequences of the actual trends come from the complex convergence of the state-of-the art AI technologies with IoT networks and Big Data algorithms and applications, applying with exponentially pace/performance at Earth scale. This convergence is happening either in the mentioned fields or new impressing areas, as computer vision, a legacy of older forms recognition [6]. Still, perhaps a revolutionary phase/step of AI development, with resonant applications in the entire IS and further in KBS is the emergent development of deep learning (learning the robot to learn). Without approaching in detail the above examples in the paper space, some relevant implications and challenges could reveal some AI development issues which must be carefully managed to provide a safe and sustainable progress of AI/ICT products and services, including IoT, in the frame of IS toward KBS, for humankind benefit (or even survival) on Earth. The main challenge, associated with AI, but also generally with ICT by their huge emergent icebergs IoT, Cloud and Big Data, comes from the overwhelming influence and partially unpredictable consequences at Earth scale on long term, from vital points of view, starting with peoples/humankind security and ending with environment changes. Focusing on AI (but easy to extend to ICT) we have to observe that the more the technologies cover all human activities and habits, along with the obvious benefits there is not only a daily dependence peoples are suffering, but slowly this tends to affect their capacity to act in some vital directions like moving, physical working, communicating, managing and eventually creating. If these last issues could be considered minor or subjective security risks, on short term, then we have to mention some real risks that the actual AI could raise in the most complex applications. With other words, today we are already depending on hundred of autonomous systems and processes, where planes automated pilots, surgical robots, smart home, smart grid or smart city are just a few. So, tomorrow AI could decide who is to be saved in an emergency and who is not. But after tomorrow AI could decide who to die. In order to avoid any confusion, we have to mention that all these are features of the modern life and generally peoples cannot oppose to the technological progress observing some inherent negative implications of the process. The point is that the benefits of that progress have got such a huge level and horizontal expansion in all mentioned autonomous systems and processes, as our lives depend dramatically on their reliable and safe operation[1]. Consequently, the solution is not to stop AI/ICT progress, but to use our actual intelligence and refined knowledge in order to “build robots we can trust” and generally ICT we can trust. The vague term “trust” must extend our attention beyond reliable and safe operation, as


killer robots and generally advanced AI (intelligent robots being just a case) rise the complicate and complex problem of ethical, moral or legal rules to be conceived and later applied when designing, building and using AI [1]. Here is the point where our title could be relevant, as developing ICT with more artificial intelligence, using artificial intelligence could create sensible risks against the above essential requirement on ethical, moral or legal rules. Summarizing we can say that security, ethical, moral or legal rules are the prominent challenges of the exponential pace/performance and planetary expansion of AI/ICT, addressed to humankind in IS toward KBS on Earth. Now the actual picture and challenges of AI development seems to be clearer, as we have estimated the main problems and we pointed the general approach for optimal solutions. It is more than obvious that there is a long way to concrete optimal solutions, we even do not intend to approach, but we can shortly analyse some examples of actual premises, status and options for such solutions for the main AI applications domains. The specialists agree that generally the robots represent the most important AI field, with amazing proliferation, versatility and scalability so that is why there is a huge interest for what is necessary to build robots we can trust[1]: “To build robots that inspire trust, roboticists are working with psychologists, sociologists, linguists, anthropologists and other scientists to understand a lot more about what makes us trustworthy and reliable in all the different roles we play” (using robots!). In fact, for every application we have to exactly define our expectations in terms of the robots capabilities, their accuracy (metrics) and the man-machine interfaces which express these parameters to the users without errors. More than these, “our expectations” could differ (at planetary scale), especially when we have to define security, ethical, moral or legal rules limits for robots. Again we have to observe that we see only the iceberg tip[5][16], as to define the above metrics and limits is a complex multidisciplinary optimization process and specialists recognize that today “We don’t know to do that well yet” [1]. In addition we consider that the problems, although similar when passing from robots to a huge diversity of applications involving AI, could be even more complicated sometimes by the fact that the probable trend is to give to AI systems more and more autonomy (for example in autonomous cars, military robots etc.) as performance and technology limits are higher and higher[8]. Finally we have just arrived to the dilemma suggested by the paper title: in the (actual or next) stage of AI/ICT development we can lose the safe limit of control for AI, when imbedded “intelligence” (as performance and technology level) is pushing us to think that we can trust in higher or total (100%) autonomy of the new (designed) AI systems, only because the technology can support that (level of autonomy)! It could be surprising , but this dilemma is not new, as least we presented it [20]in a general form for ICT, but anyway the essence is that we have arrived at that performance and technology where the competition man-machine could be won by the machine in more and more domains of AI. Here we have to recall that it started with “computing”, then chess followed, but today we speak about another stage, when surgeon is working in tandem with the robot and the 14

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commander could be replaced in a complex/dynamic/special decision system by the killer robot. The question is Why/How these situations could exceed the safe limit? A first (simple) answer is because the safe limit will be more and more difficult to define, measure and eventually control, just because we are faster introducing AI in systems more and more complex and difficult to mathematically model by deterministic algorithms (but by heuristics or statistical ones). A second (more elaborated) answer has to consider the first and then add the fact that human could not compete the advanced AI systems because, along with the computing power, the system usually includes complex networks of sensors (here comes IoT!) which provide an enormous amount of data transformed in knowledge (here comes Big Data!) and when the moment of (fast or dynamic) decision comes, human really has no chance (numerical arguments or data) to counter the AI system, because all the available information is that provided by the AI system. Is then really nothing we can do? No, we still have options, till it is not too late! Then what to do? Remember Newton (the above quote) to “see further” and then remember Einstein (the above quote) to use imagination and then fight ... knowledge! Because it is not a simple fight it is better to analyse it (of course not exhaustively) in the next section.

2. Building robots without being robots

As we can find Newton’s “giants” either after or before him, here it is worth to quote the ancient Sun Tzu: “know yourself and you will win all battles”. We have considered starting the “fight” (against advanced AI vulnerabilities) with Sun Tzu advice because the roots of AI intelligence (or lack of it!) must be searched in ... our intelligence (or lack of it!). The essence of “fight” strategy is to plenary use, as we already suggested[9][12][20], the only (long term) advantage human could have over AI (machine): the imagination potential. Consequently, when developing advanced AI/ICT (especially, advanced robots), we have to use the most refined knowledge plus our imagination maximum potential, aiming with priority two main objectives. First we must be sure that human subjective criteria are cleared (know yourself) by refined knowledge based on security, ethical, moral or legal rules. Then, remembering Socrates (the above quote) and Descartes (the above quote), analyse all possible scenarios of “fight” (against advanced AI vulnerabilities). Before any other concrete step, we consider again appropriate to recall a Sun Tzu quote,“opportunities multiply as they are seized”, because we have to use timely the acquired technological progress, anticipating all its positive or negative consequences.


Now a concrete step is to deeply understand, everyday and every way we think or act, Descartes’ message on methodical doubt (the above quote, in section 1). Especially when we analyse and design advanced AI/ICT (i.e. advanced robots), methodical doubt is crucial in combination with the state-of-the-art refined knowledge valued by human superior imagination, in order to extend the multicriteria analyses to all possible (and even impossible)scenarios. Technically and simpler speaking, we can win the “fight” (against advanced AI vulnerabilities) only if applying the advantage of using similar refined knowledge, but exceeding by human (unlimited) imagination the analysis advanced AI could perform based on learning processes it could have passed mainly by neural networks models and algorithms. To be more specific, usually AI systems perform their advanced processes by neural networks models and algorithms which are applied to diverse sets of collected (or learned) data through designed sets of rules. On the other hand, the specialists intelligence could use the human (unlimited) imagination to exceed the AI by the fact that they have conceived the sets of rules and had the chance to anticipate the AI operation rules (technology) limits. Notice that it is essential to understand the crucial importance of models and algorithms the specialists could use to apply the more and more performant available technology[16], because, as we above mentioned, this amazing AI/ICT performance and proliferation at planetary scale are the main premises to create functional vulnerabilities (risks) unless backing solutions to timely compensate them are provided by appropriate models and algorithms. All the above premises represent a valuable motivation for better understanding why and how building robots without being robots is a prominent requirement, as AI/ICT designers have to be a step ahead against advanced AI vulnerabilities, using the above mentioned chance to anticipate the AI operation rules (technology) limits. More than these, we consider that when developing ICT with advanced AI, using artificial intelligence, especially in the (future) cases where machines will have a substantial role in design processes, involved human must avoid the routine approach (not being “robot” in the dynamic world of AI/ICT!), providing instead the appropriate control for safety, in the design phase by models, algorithms and in the operation phase by user hard/soft redundant interfaces. If someone could think that these redundant analyses, risk evaluations and hard/soft safety measures are overdone, it is relevant to remember a quote[19] of another “giant”, Stephen Hawking, about intelligence and life safety: ”I believe alien life is quite common in the universe, although intelligent life is less so. Some say it has yet to appear on planet Earth”. Also as a confirmation of our above approach about control and timely react, Stephen Hawking said: ”Intelligence is the ability to adapt to change”. Of course, all these general directions are essential, but always we have to remember that real life is much more complicated. Perhaps that is why Stephen Hawking did more than giving good advices. In fact, the importance and realism of the subject of our paper are also confirmed by a group of leading researchers in AI [3], which called in 2015 for a ban on “offensive autonomous weapons beyond meaningful human control”. More than this, at an AI conference, the group presented an open letter where they warned about a “global AI arms race”. 16

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The impact of this letter[3] is expressed by the fact of being “signed by more than 20,000 people, including such luminaries as physicist Stephen Hawking and Tesla CEO Elon Musk, who last year donated US $10 million to a Boston-based institute whose mission is “safeguarding life” against the hypothesized emergence of malevolent AIs”. It is sure that AI/ICT challenges go beyond malevolent AIs, as we have presented above, but is also truth that autonomous weapons are one of the biggest AIs dangers for humankind future. Methodical doubt taught us to use our imagination, for example to answer to a logical question: could be some other AI more dangerous than autonomous weapons? Of course it is very difficult, in spite of all the above paper considerations, to answer this question or simply say: Yes. Just recall from the title that IoT is “intelligence everywhere” and we can imagine from here the huge diversity of emergent applications where IoT, Cloud, Green ITC and Big Data will be extended at planetary scale [15][5][7][11][10][13][14][17][18]. Again some examples could be relevant by AI potential impact on humankind life:  ICT future advanced networks (mainly Internet, but not exclusively);  Smart grid for power networks optimization;  Industrial robots and AI systems (just imagine nuclear, chemical, petroleum, gas etc.);  Autonomous transportation (planes/cars/trains pilots etc.)  Environment monitoring/protection systems;  Security systems. After shortly analysing every example, it is easy to imagine a scenario where unreliable operation of AI systems could have dramatic consequences over a huge number of people or communities, even exceeding what a killing robot could do, but we have to also mention that autonomous weapons could include rockets and so on. In this relative comparison, but also in the above analyses, we did not mentioned perhaps the most dangerous risk for humanity today: the terrorism. If in the past decades the defence/security authorities spoke about what if a dirt nuclear bomb would be in the hands of terrorists, in our days they speak more and more about cyberattacks or cyber-space security. It is not difficult to imagine that sooner or later the AI will be involved in the most sophisticated security systems. If today AI is involved in writing code lines (lets say, for simple/partial applications) or in computer vision systems, it is clear that here the future will bring more and more essential involvement and ... potential vulnerabilities, including criminal actions. The last observation is obviously more that it could appear, because the scenario is possible not only in a security system, but ... everywhere (including all above examples!). Coming back to the above start (IoT is “intelligence everywhere”), we can only to observe that all examples (and more) could be in a way or other, less or more, sooner or later, under IoT “umbrella” – or under Internet or any other future net!


That is why we have to agree that the paper subject needs to be continued.

3. Conclusions

The paper analysis showed that AI represents a potential revolutionary step in ICT development, having, naturally, challenges of the same scale, because of the complex convergence of the state-of-the art AI technologies with IoT networks and Big Data, applying with exponentially pace/performance at Earth scale. Security, ethical, moral or legal rules are the prominent challenges of the exponential pace/performance and planetary expansion of AI/ICT, addressed to humankind in IS toward KBS on Earth. The benefits of the AI/ICT progress have got such a huge level and horizontal expansion in autonomous systems and processes, as our lives depend dramatically on their reliable and safe operation. Consequently, the solution is not to stop AI/ICT progress, but to use our actual intelligence and refined knowledge in order to‘’build robots we can trust’’ and generally ICT we can trust. Developing ICT with more artificial intelligence, using artificial intelligence could create sensible risks against the above essential requirement on ethical, moral or legal rules. In the (actual or next) stage of AI/ICT development we can lose the safe limit of control for AI, when imbedded “intelligence” (as performance and technology level) is pushing us to think that we can trust in higher or total (100%) autonomy of the new AI systems only because the technology can support that (level of autonomy)! The essence of “fight” strategy is to plenary use, as we already suggested[9][12][20], the only (long term) advantage human could have over AI (machine): the imagination potential. Consequently, when developing advanced AI/ICT (especially, advanced robots), we have to use the most refined knowledge plus our imagination maximum potential, aiming with priority two main objectives. First we must be sure that human subjective criteria are cleared (know yourself) by refined knowledge based on security, ethical, moral or legal rules. Then, remembering Socrates (the above quote) and Descartes (the above quote), analyse all possible scenarios of “fight” (against advanced AI vulnerabilities). The essence of “fight” strategy is to plenary use, as we already suggested[9][12][20], the only (long term) advantage human could have over AI (machine): the imagination potential. Consequently, when developing advanced AI/ICT (especially, advanced robots), we have to use the most refined knowledge plus our imagination maximum potential, aiming with priority two main objectives. First we must be sure that human subjective criteria are cleared (know yourself) by refined knowledge based on security, ethical, moral or legal rules. Then, remembering Socrates (the above quote) and Descartes (the above quote), analyse all scenarios of possible “fight” (against advanced AI vulnerabilities). Technically we can win the “fight” (against advanced AI vulnerabilities) only if applying the 18

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advantage of using similar refined knowledge, but exceeding by human (unlimited) imagination the analysis advanced AI could perform based on learning processes it could have passed. The analysis reveals the crucial importance of models and algorithms the specialists could use to apply the more and more performant available technology, because this amazing AI/ICT performance and proliferation at planetary scale are the main premises to create functional vulnerabilities (risks) unless backing solutions to timely compensate them are provided by appropriate models and algorithms.

REFERENCES [1]Susan Hassler, Building robots we can trust, IEEE Spectrum, June 2016. [2]Victor Greu, The information society towards the knowledge based society driven by the information and communications technologies - from the Internet of Things to the Internet of …trees (Part 1), Romanian Distribution Committee Magazine, Volume 6, Issue1, Year 2015. [3]Erico Guizo, Evan Ackerman, When robots decide to kill, IEEE Spectrum, Jun 2016. [4]*** 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/ [5]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. [6]Prachi Patel, Fatih Poriklisets the bar for computer vision, , IEEE The Institute, Jun 2016. [7]*** Internet of Things — An action plan for Europe, (PDF). COM(2009)-278 final, Commission of the European Communities -18 June 2009. [8]Nathan A. Greenblatt, Self driving cars and the law, IEEE Spectrum, Feb 2016. [9]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. [10]Ke Xu et all, Toward software defined smart home, IEEE Communications, May 2016. [11]Kathy Pretz, A toolkit for building energy-efficient communications networks, IEEE The Institute, May 2016. [12]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. [13] Mark Harris, The Internet of Trees, IEEE Spectrum, Mar.2014. [14] Rebecka Jarbur, Developing guidelines for green information and communication technology - (Thesis at) Dept. of computer and information sciences university of Strathclyde, September 2014. [15]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. [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]***, https://www.brainyquote.com/quotes/topics/topic_intelligence.html [20]Victor Greu, Tomorrow’s paradox: refining knowledge by smarter information and communications technologies while humans tend to become a limited factor of performance, Romanian Distribution Committee Magazine, Volume 7, Issue1, Year 2016.


George Cosmin Tănase

T h e V i r t u a l Va l u e C h a i n And Experiential Mar keting

Abstract:

As markets are getting more complex, the value chain of the single firm cannot be seen independently from the value chains of other actors in the market network. Strategic analysis should focus on the valuecreating system itself within the different players – suppliers, business partners, customers and internal employees should work together to co-produce value. Although value activities are the building blocks of competitive advantage, the value chain is not a collection of independent activities, but a system of interdependent activities. The value chains of different players are related to each other by linkages within the total industry. Linkages are relationships between the way in which one value activity is performed and the cost or performance of another. In understanding the competitive advantage of an organisation, the strategic importance of the following types of linkage should be analysed in order to assess how they contribute to cost reduction or value added.

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Keywor ds: Knowledge Management, Digital Assets, Purchase Decision, System Value, Competitiveness, Globalisation, Localisation JEL Classification: D83, M31

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All internationally orientated firms must consider an eventual internationalisation of the value chain’s functions. The firm must decide whether the responsibility for the single value chain function is to be moved to the international markets or is best handled centrally from head office. Principally, the value chain function should be carried out where there is the highest competence (and the most cost-effectiveness), and this is not necessarily at head office (Bellin and Pham, 2007). The two extremes in ‘global marketing’ (globalisation and localisation) can be combined into the so-called ‘glocalisation’. This global marketing strategy strives to achieve the slogan ‘Think globally but act locally’ (the so-called ‘glocalisation’ framework), through dynamic interdependence between headquarters and subsidiaries. Organisations following such a strategy coordinate their efforts, ensuring local flexibility while exploiting the benefits of global integration and efficiencies, as well as ensuring worldwide diffusion of innovation. A key element in knowledge management is the continuous learning from experiences. In practical terms, the aim of knowledge management as a learning-focused activity across borders is to keep track of valuable capabilities used in one market that could be used elsewhere (in other geographic markets), so that firms can continually update their knowledge. However, knowledge developed and used in one cultural context is not always easily transferred to another. The lack of personal relationships, the absence of trust and ‘cultural distance’ all conspire to create resistance, friction and misunderstandings in cross-cultural knowledge management. With globalisation becoming a centrepiece in the business strategy of many firms – be they engaged in product development or providing services – the ability to manage the ‘global knowledge engine’ to achieve a competitive edge in today’s knowledge-intensive economy is one of the keys to sustainable competitiveness. But in the context of global marketing, the management of knowledge is de facto a cross-cultural activity, whose key task is to foster and continually upgrade By introducing the virtual value chain, Rayport and Sviokla (1996) have extended the conventional value chain model, which treats information as a supporting element in the valueadding process. Each of the physical value chain activities might make use of one or all four of the information processing stages of the virtual value chain, in order to create extra value for the customer. That is the reason for the horizontal double arrows between the different physical and virtual value chain activities. In this way, information can be captured at all stages of the physical value chain. Obviously such information can be used to improve performance at each stage of the physical value chain and to coordinate across it. However, it can also be analysed and repackaged to build content-based products or to create a new line of business.

A company can use its information to reach out to other companies’ customers or operations, thereby rearranging the value system of an industry. The result might be that traditional industry sector boundaries disappear. The CEO of Amazon.com, Jeffrey P. Bezos, clearly sees his business as not bookselling, but the information-broker business. Regarding the customer value proposition that can be created along the virtual value chain, it is very important to develop a profound understanding of the customer’s online experience.

The virtual value chain as a supplement to the physical value chain Marketers must understand specific characteristics of online channels and the benefits they offer to customers. To help formulate the online customer value proposition (OCVP), we need to consider the special characteristics of the Internet and its online services as perceived by customers using them. Six criteria can be used to determine the sustainability of the formulated OCVP, in order to reach online customers (Chaffey, 2005): 1. Content: online content is rich, which means it provides something that other channels cannot. Often this means more detailed, in-depth information to support the buying process or product usage. However, often online product catalogues simply replicate what is in offline catalogues without adding extra information, images or example applications. Messaging through email and SMS is also key to providing unique content – these media can be used to deliver timely, relevant media to individuals. As well as text-based content, which is king for


business-to-business, there is also interactive content, which is king for consumer sites and particularly brands. FMCG brands now use the Internet to deliver what they term as ‘digital assets’, which support offline branding campaigns. 2. Customisation: in this case, mass-customisation of content (whether received as website pages or email alerts) and commonly known as ‘personalisation’. Of course, Amazon is quoted many times as an example of this, and it actually has a ‘Director of Personalisation’. The ability for a subscriber to an online email service to tailor their messages by selectively opting-in to particular types of message is a further example of customisation. 3. Community: these days this is also known as ‘social networks’. Online channels such as the Internet are known as ‘many-to-many’ media, meaning that your audiences can contribute to the content. 4. Convenience: this is the ability to select and purchase, and in some cases use, products from your desktop at any time: the classic 24/7/365 availability of a service. Online usage of products is, of course, restricted to digital products such as music or other data services. Amazon has advertised offline using a cartoon showing a Christmas shopper battling in queues clutching several bags, to reinforce the convenience message. 5. Choice: the Internet gives a wider choice of products and suppliers than via conventional distribution channels. For example, Tesco.com provides Tesco with a platform to give consumers a wider choice of products (financial, travel, white goods) with more detailed information than is physically available in store. 6. Cost reduction: the Internet is widely perceived as a relatively low-cost place of purchase. A key component of the low-cost airline carriers’ OCVP is that it is cheaper than phone bookings. This simple price differential, together with the limited change behaviour required from phone booking to online booking, has been a key factor in, for example, Ryanair’s online ticketing channel effectively replacing all other booking modes.

Experiential marketing As services increasingly become commoditised – think of smartphone services sold solely on price – ‘experiences’ have emerged as the next step in how we can provide ‘customer value’. A customer experience occurs when a company intentionally uses products in combination with services to engage an individual customer in a way that creates a memorable event (Pine and Gilmore, 1998). Unless companies want to be in a commoditised business, they will be compelled to upgrade their offerings to the next stage of customer value creation: ‘customer experience’. Experiential marketing is a growing trend worldwide, evident in most sectors of the global economy. Essentially it describes marketing initiatives that give consumers in-depth, tangible experiences in order to provide them with sufficient information to make a purchase decision. It has evolved as a response to a perceived transition from a service economy to one personified by the experiences in which consumers participate. Increasingly, consumers are involved in the processes of both defining and creating value, and the co-created experience of consumers through the holistic brand value structure becomes the very basis of marketing. Finally, the more a company engages all five senses in the creation of a ‘customer experience’, the more effective and memorable it can be.

Conclusions Today, the right combination of the product value chain and the service value chain is not a sufficient competitive differentiator. Adding ‘customer experiences’ and ‘experiential marketing’ occurs when a company intentionally uses products in combination with services to engage individual customers in a way that creates a memorable event, which can characterised in one of four groups: entertainment, educational, aesthetic or escapist. Engaging the customer and adding customer experiences is further exemplified by the use of augmented reality (AR), 22

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which is a digital way of putting the product in the hands of the users and giving them the opportunity to test the product without paying for it. Consequently, AR is especially effective in the pre-purchase stage of the buying process. References [1] Anderson, J.C., Kumar, N. and Narus, J.A. (2007) Value Merchants: Demonstrating and Documenting Superior Value in Business Markets, Boston, MA: Harvard Business School. [2] Crain D.W. and Abraham S. (2008) ‘Using value-chain analysis to discover customers’ strategic needs’, Strategy & Leadership, 36(4): 29–39. [3] Day, G.S. (2011) ‘Closing the Marketing Capabilities Gap’, Journal of Marketing, 75, July, 183–95. [4] Jonk, G., Handschuh, M. and Niewiem S. (2008) ‘The battle of the value chains: new specialised versus old hybrids’, Strategy & Leadership, 36(2): 24–9. [5] McPhee W. and Wheeler, D. (2006) ‘Making the case for the added-value chain’, Strategy & Leadership, 34(4) [6] Walters, D. and Lancaster, G. (2000) ‘Implementing value strategy through the value chain’, Management Decision, 38(3): 160–78.


Retail in the era of Omni channel marketing Theodor PURCÄ‚REA

Abstract: There is no doubt that today’s Omni shoppers looking for richer experiences have great expectations from retailers, which must be ready to take their shopper marketing to the next level, creating insight matched with relevant market intelligence. On the Romanian retail market there is a considerable increase in the number of stores at the level of international retail chains. That is why a look at the recent developments on U.S. or European Union retail markets within the context of marketing changed by the rise of social media (and not only), considering, among others, the top retail trends, how consumers want to receive brand communications from retailers, how brands can enable a seamless customer experience and so on, give us another perspective of the retail marketing environment and of the challenges ahead.

Keywords: Omni channel marketing; Omni channel retailing; Retail challenges

JEL Classification: L81, L86, M31

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What today’s shoppers expect from retailers On the occasion of the Omnishopper Interational event (London, Marriott, 11/15/16 11/17/16), participants had the opportunity to better understand Gfk’s thoughts on the marketing challenge presented by the rise of the Omni-shopper. Two Gfk’s viewpoints are already wellknown concerning: the radical retail reversal showing how today’s shoppers expect retailers to queue up to see them; the need of getting to the front of the queue. That is why retailers have: ▪ to act in four directions: price (Omni shopper, Omni channel, Omni price), experience (creating compelling experiences to ensure repeat visit and loyalty), convenience (the end of the queue), choice (thinking beyond categories, identifying and understanding consumers’ needs as they evolve); (Gfk, The shopper will see you now) ▪ to struggle to better define the objective and process of shopper marketing, and to not focus exclusively on the Omni shopper’s journey’s digital aspects (excluding the brick and mortar stores, where most shopping is still done), better capitalising on consumers’ needs at the moment of their need, whether online or offline, by creating insight (matched with relevant market intelligence) so as to can win with today’s Omni shopper. (Gfk, Getting to the front of the queue) According to Gfk Romania, the number of touchpoints between brands and consumers is growing consistently, consumers looking for richer experiences beyond a simple purchasing of new products. And as competition for customer loyalty is increasingly fierce, the producers of consumer goods must in-depth understand both the customers’ motivations behind their choices, and their experiences in every touchpoint. In a press release from Bucharest, 20.10.2016, Gfk stated that: the economic expectations and those concerning revenues, but also the indicators of the buying trend did not evolve uniformly throughout European space (overall, the consumer climate for EU28 fell from 13.1 points to 12.3 points from June to September 2016); in Romania, the economic recovery improves little by little Romanian consumer attitudes, the buying trend, located at 2.3 points in September, being only slightly higher than the long-term average of 0 points (but reaching 5.4 points in July, the highest value since October 2008). Some month ago, in the Volume 7, Issue 3, of the Romanian Distribution Committee Magazine, we show that according to IKA Romania – Retailer Analysis, 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 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). Today, the situation is as follows, the total current number of shops on the Romanian retail market being 2,620 (compared to the above mentioned 2,501 international retail chains stores) per channel type is as follows: Cash&Carry – 57 (55 in September 2016); Discount Store – 404 (385 in September 2016); Hypermarket – 192 (188 in September 2016); Proximity Store – 726 (686 in September 2016); Specialized Store – 85 (84 in September 2016); Supermarket – 433 (417 in September 2016); Rural Store – 82 (49 in September 2016, a spectacular increase). Compared to the number of international retail chains stores in September 2016 (2,501 as mentioned above), there is an increase with 119 stores. In what concerns the Local Key Accounts, the total current number is 641 (IKA.Progressive Magazine, 2016). Thinking human-connect first for Omni channel retailing success In February 2016, French social media influencer Isabelle Mathieu pointed out that WhatsApp, Facebook Messenger, WeChat, Viber together (main messaging apps) have a wider community than Facebook, Twitter, LinkedIn, Instagram (main social networks). And a recommendation made at the beginning of December this year (Richard, 2016) starting from this fact was to start researching ways in which brands can reach customers and prospects through


messaging apps. And this considering what Mark W. Schaefer (marketing consultant, author, and speaker on digital trends and marketing transformation) underlined within the context of marketing changed by the rise of social media, marketers being challenged to combat with tensions such as: discoverability vs. interactivity (getting people to find brands and interact with them without failing to fulfill people’s hopes or expectations), content orientation vs. person orientation (the goal in this new world being engagement through private conversational moments). (Schaefer, 2016) At the beginning of November this year, Chris H. Petersen, PhD, CEO of Integrated Marketing Solutions and founder of IMS Retail University, (Petersen, 2016) argued that today’s retailers require new Omni channel data, metrics, and benchmarking, highlighting important aspects, such as: as customers are the new POS in today’s Omni channel marketplace (determining where they purchase, how they pay, and where they collect), retailers (their POS systems enabling and tracking all the way down to the SKU level to enable inventory replenishment, also detailing analyses of what is sold in the so-called “market basket”; their online POS system including the new dimension of shipments) are facing new business questions that will require new data, metrics and benchmarking; in order to manage retail operations, inventory and financials, retailers’ POS systems have been integrated into larger enterprise systems (scorecards being focused on sales, revenue, returns, and net profit), while in order to benchmark their own performance most retailers subscribed to 3rd party sources or associations that track total volumes of goods and market consumption (also using this data to analyze distributor data to map shipments through various channels); but beyond the fact that they can this way quickly benchmark their growth against competitive indices (tracking their market share at the country and local levels), they are missing core metrics facing the Omni channel consumers with their multiple combinations of choices of purchase and delivery (buying online, shipping to home; buying online, collecting in store; buying online, collecting at locker or another location; buying in store, taking home; buying in store, delivering at home; buying in store, delivering at commuter station or other location); and because the store became a triple point (of shopping, of customer experience, and of distribution), it needs to track the paths and core metrics. Also in November this year, Richard R. Shapiro, Founder and President of The Center For Client Retention (TCFCR) and a leading authority in the area of customer satisfaction and loyalty, highlighted 16 top retail trends: Amazon’s phase 2 – shopping with Alexa; brick & mortar stagnates but still relevant; brands expand locations and pop-up stores; the customer experience is a sensory experience; the mall in transition; geo-fencing, geo-targeting, geoconquesting; shopping virtually…with virtual reality and holograms; instant gratification will encourage more services; Where’s my stuff? GPS trackers for delivery services will tell you; the packaging (r)evolution; subscription services will continue to change how companies do business; peer-to-peer ecommerce sites expand offerings; renting versus owning; customers trust reviews … more than ever; membership/loyalty programs help improve the customer relationship; what does my garment do. Shapiro’s final recommendation was that retailers have to think human-connect first, then to work backwards and add the technology features that their customers are most likely to use and comment. (Shapiro, 2016) It is also worth mentioning within this framework what a Bluecore report (based on data from a survey conducted in July 2016 of 1,174 consumers in the U.S., who made an online purchase within the past three months) revealed concerning how consumers want to receive brand communications from retailers: via email (68%); while shopping in-store (6.9%); via text messages (5.6%), as shown in the figure below: (Nanji, 2016)

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Figure 1: How consumers want to receive brand communications from retailers, Bluecore, 2016 Source: Nanji, A., How Consumers Want to Receive Retail Brand Communications, November 21, 2016, retrieved on 21.11.2016, from: http://www.marketingprofs.com/charts/2016/31115/how-consumers-want-toreceive-retail-brand-communications?

According to the same report, respondents in all generations considered that email is the most preferred brand communication channel, as shown in the figure below:

Figure 2: How consumers in all generations want to receive brand communications from retailers, Bluecore, 2016 Source: Nanji, A., How Consumers Want to Receive Retail Brand Communications, November 21, 2016, retrieved on 21.11.2016, from: http://www.marketingprofs.com/charts/2016/31115/how-consumers-want-toreceive-retail-brand-communications?

In the same time, we remarked that if last year, PSFK (the world’s leading provider of innovation insights) described the 10 pillars propping up the new shopper experience, this year PSFK (while promoting its Future of Retail 2017 report offering transformational strategies for a customer-first business, which can exceed the expectations of a new generation of shoppers) is reflecting on how to go actually about making the new shopper experience happen. To create a customer-first company delivering on customers’ wants (convenience, personalization, and seamless, Omni channel access), this involves holding and using employee development, optimized operations, and the latest technologies. (Alonso, 2016) Different approaches of the retail challenges in the last quarter of this year In an email sent on December 14, 2016 by Werner Studer, Executive Director of Intercontinental Group of Department Stores (IGDS: the largest association for department stores worldwide, founded in 1946, and comprising today 41 members in 38 countries and


on all continents; organiser of the Global Department Store Summit – GDSS, and World Department Store Forum), we find out an update on the programme and speakers for our 5th World Department Store Summit (WDSF), scheduled for 1st - 2nd June 2017 in Toronto. According to this message, the programme is including the following topics: Customers’ New Capacities; Omni-Digital-Mobile-Offline - The Winning Combination; Leading Transformation A Multi-Disciplinary Approach; Digital Vision; CEO Roundtable. This made us think of different approaches of the retail challenges in the last quarter of this year, and to try to identify eventual links with the above mentioned topics. The digital PR strategist and account manager at Preceptist underlined recently the real need of planning new e-commerce strategies so as to adapt to user needs and expectations (as they have more options than ever, and they are looking for the best possible user experience, companies being forced to strategize accordingly ), 2017 being expected to be an innovator’s market. (Parmar, 2016) Within this context four trends were identified requesting to do something about them: E-Commerce Market to Experience a Shift; Mobile to Be the Key Driver for E-Commerce; Active User Engagement to Drive Sales; Social Commerce. On the other hand, in the same period of time, the CMO and VP of marketing and product development at GetResponse attracted the attention that in order to make marketing work in 2017 U.S. companies must take into account some of the most critical challenges from 2016: ad fraud is still a big problem; marketers are stuck on data collection; marketing software is too hard to use; a spotlight on geospatial data; open platforms that speak to each other. (Brzezinski, 2016) Also in the middle of December this year, Ryan Carney, a Senior Lead UX Specialist at GfK, underlined the step made from the “killer app” to the “killer device” (both easy and fun to use, user testing becoming important), making difference between a good user experience and a great user experience in the age of the device ecosystem, and keeping users coming back. (Carney, 2016) In its turn, in full marsh on expanding beyond the online marketplace, Amazon will launch next summer an app designed to make it easier to connect truck drivers with shippers that need goods moved (“Uber model”), also eliminating practically a third-party broker. Targeting to control every point in a faster delivery cycle, Amazon is building new distribution centers in nearly every U.S. state, is also starting an air freight service (by leasing its own planes) to the launch of Amazon’s first drone delivery. (Keenan, 2016) Coming back to the arguments of the above mentioned reputed Richard Shapiro (who identified “Voice Recognition”, at the close of 2015, as the sixth Customer Experience Trend 2016), allow us to remember that Amazon started in July 2016 offering Echo-only deals (in early 2015 being launched a Echo device nicknamed “Alexa”; Apple’s “Siri” rely also on voice commands) to encourage customers to shop with their signature voice. (Shapiro, 2016) As shown by Shapiro, if Phase I of Amazon’s strategic plan (all about convenience, voice versus touch) represented the beginning step in transforming CX, the retail market will be dramatically impacted by the Phase II, which will augment Amazon’s current retail dominance, by revolutionizing goods’ and services’ ordering through voice control commands (“Alexa” paying attention to our conversations, for example). On the other hand, as highlighted by the Digital Editor for Adweek in November this year, Amazon (according to Verto Analytics’ stats comparing the top 15 retailers based on the online activities of 20,000 U.S. consumers during October 2016, and also revealing market numbers for mobile and desktop audiences, both showing Amazon - the leader in seven of the 11 categories - in the No. 1 position: (Heine, 2016)

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Figure 3: E-commerce, November 2016 Source: Verto Analytics’ stats, in Heine, C., Amazon Is Dominating Online Retail Going Into the Holiday Shopping Season. Data-rich chart shows it’s a statistical rout, November 23, 2016

When it comes to a customer service request in conjunction with brick-and-mortar retailers (supermarkets, grocery stores and clothing stores) according to a worldwide study (entitled “The Digital Tipping Point: How Do Organizations Balance the Demands for Digital and Human Customer Service?”) of more than 24,000 consumers and 1,000 businesses (interviews conducted in the local language in Australia, Brazil, India, France, Germany, Japan, Mexico, the Netherlands, New Zealand, South Africa, U.K. and the U.S.), the majority of respondents confirmed they prefer to talk to a live person (on the phone or in person). (Capuano, 2016) If within such a context customers display more positive behaviors toward brand, when it comes to on line’s and via mobile devices’ service, they need to have one which is faster and more intuitive to serve end users. According to a recent report from Astound Commerce (based on data from a survey of more than 1,000 US consumers asked about their online shopping behavior, in-store preferences, and social commerce actions), consumers’ retailer choices are influenced mainly by price (79% say it is important), free shipping (68%), and in-stock inventory (67%). (Nanji, 2016) On the other hand, it is good to better understand: how important is that a retailer’s website be mobileoptimized, respecting the way they want to be engaged, and ensuring the right user experience from any device, offering flexibility to apply for credit, manage their accounts etc.; (Kroskie, 2016) how difficult is for retailers to ensure that their website would be fast and stable during peak traffic periods (according to a recent study from eCommera), despite their agreement that innovations should lead to definite improvements, and that improving the customer experience is a primary focus of their innovation program; (eMarketer, 2016) how brands can enable a seamless customer experience by focusing on customers’ purchasing behaviors and aligning the digital and physical elements of an Omni channel strategy, considering the role of the local brick-and-mortar store in driving sales and converting potential buyers to active customers (as increasingly more and more in-store visits are driven by what shoppers saw online first); (Morrissey, 2016) how six in ten internet users in Germany (even the youngest adult shoppers, despite the fact that they are considered most digitally engaged compared to other countries) still prefer in-store purchases (according to a survey released in October 2016 by Creditreform Boniversum); (eMarketer, 2016) how across the major European markets Omni channel and online retail are at different maturity levels, the most developed being the United Kingdom and France, while the winning CPG (consumer-packaged-goods) companies (as early entrants into the e-commerce space) are already experienced in activating online shoppers, curating an online assortment, and managing channel conflict (according to a multiyear global survey conducted by McKinsey in partnership with Nielsen, being interviewed more than 100 sales executives across Europe about their customer- and channel-management practices); (Land,


Rickert, and Schmutzler, 2016) how by leveraging Omni channel marketing retail marketers can take control of their customers’ journeys (given the technology platforms that capture data), providing them with an integrated shopping experience, and familiarizing them with the brand, keeping them coming back for more. (Alonso, 2016) Conclusions The modern retail trade in Romania will also continue to adapt to the above highlighted developments, better understanding the decision journey that the Omni channel shoppers undertake. And coming back to the same Chris H. Petersen, but to other arguments (brought by him on the occasion of the recent RVCF Annual Fall Conference), it is useful to show some of them: (Petersen, 2016) • Omni channel (a relatively new term that emerged in about 2008) has become essential for a retailing forced to keeping pace with the changing pattern of customer behaviors related to shopping in more than one place, the future of retailing being now about how retailers must connect and transact with consumers across time and space (where they shop at a moment in time); • That is why it is necessary to take into account that: today’s retailing is boundary-less (no boundaries of when consumers shop, where consumers shop and purchase from), transcending boundaries of states and countries, while purchasing became a boundary-less journey (in scope, sources, touch points and time); consumers need omnipresent retailing; mobile smartphones enable omnipresence, boundary-less engagement; to be “omnipresent” and boundary-less requires hard work and considerable investment and infrastructure; retailers need new metrics to measure ROI beyond the POS sales transaction. And allow us to also remember that five years ago, approaching the link between the future of shopping and the Omni channel organization, Darrell K. Rigby (a partner in the Boston office of Bain & Company; author of “Winning in Turbulence”) highlighted (Rigby, 2011)that a successful Omni channel strategy should deliver the kind of revolution in customer expectations and experiences that comes along every 50 years or so (better understanding that the digital and physical arenas complement each other). References Alonso, B., Editorial Roundtable: How To Become A Customer-First Company, PSFK , 23 November 2016, retrieved on 24.11.2016, from: http://www.psfk.com/2016/11/retail-trends-editorial-roundtable-become-customer-firstcompany.html Brady, S., Top 5 Marketing Resolutions Retailers Must Acknowledge Before 2017, December 16, 2016, retrieved on, from: http://www.mytotalretail.com/article/top-5-marketing-resolutions-retailers-must-acknowledgebefore-2017/ Brzezinski, D., 2017 Marketing Won’t Work Until You Fix This From 2016, Target Marketing Magazine, December 19, 2016, retrieved on 20.12.2016, from: http://www.targetmarketingmag.com/article/2017-marketing-wont-workfix-2016/#utm_source=today-%40-target-marketing&utm_medium=newsletter&utm_campaign=2016-12-19&utm_content=2017+marketing+won%E2%80%99t+work+until+you+fix+this+from+2016-4 Capuano, D., Balance Online Customer Service Carefully With Human Interaction, December 8, 2016, retrieved on 13.12.2016, from: http://www.mytotalretail.com/article/balance-online-customer-service-carefully-with-humaninteraction-says-survey/ Carney, R., The secret to a “killer device” that keeps users locked into your ecosystem, Dec, 14 2016, retrieved on 15.12.2016, from: https://blog.gfk.com/2016/12/secret-killer-device-keeps-users-locked-ecosystem/ Heine, C., Amazon Is Dominating Online Retail Going Into the Holiday Shopping Season. Data-rich chart shows it’s a statistical rout, November 23, 2016, retrieved on 26.11.2016, from: http://www.adweek.com/news/technology/ amazon-dominating-online-retail-going-holiday-shopping-season-174785 Keenan, J., Amazon Secretly Working on ‘Uber for Trucking’ App, December 20, 2016, retrieved on 22.12.2016, from: http://www.mytotalretail.com/article/amazon-secretly-working-uber-trucking-app/#utm_source=total-retailreport&utm_medium=newsletter&utm_campaign=2016-12-20&utm_content=amazon+secretly+working+on+%E2%80%98uber+for+trucking%E2%80%99+app-1 Kroskie, K., Building on a seamless brand experience with Account Center, retrieved on 01.12.2016, from: http://knowmoresellmore.com/insights-news/building-seamless-brand-experience-account-center? Land, S., Rickert, S, and Schmutzler, R., The sales practices of Europe’s leading consumer-goods companies, November 2016, retrieved on 01.12.2016, from: http://www.mckinsey.com/industries/consumer-packaged-goods/ourinsights/the-sales-practices-of-europes-leading-consumer-goods-companies? Morrissey, B., Omnichannel Marketing’s Secret Weapon: Local Brick-and-Mortar Stores, December 8, 2016, retrieved on 09.12.2016, from: http://www.marketingprofs.com/opinions/2016/31240/omnichannel-marketings-secretweapon-local-brick-and-mortar-stores? Nanji, A., How Consumers Want to Receive Retail Brand Communications, November 21, 2016, retrieved on 21.11.2016, from: http://www.marketingprofs.com/charts/2016/31115/how-consumers-want-to-receive-retail-brandcommunications? Nanji, A, What Consumers Want From Retailers This Holiday Season [Infographic], December 9, 2016, retrieved on 09.12.2016, from: http://www.marketingprofs.com/charts/2016/31238/what-consumers-want-from-retailersthis-holiday-season-infographic? Parmar, D., 4 E-commerce Trends That Will Rule the Market in 2017, Target Marketing Magazine, December 21, 2016, retrieved on 22.12.2016, from: http://www.targetmarketingmag.com/article/4-e-commerce-trends-that-willrule-the-market-2017/#utm_source=today-%40-target-marketing&utm_medium=newsletter&utm_campaign=2016-12-21&utm_content=4+e-commerce+trends+that+will+rule+the+market+in+2017%C2%A0-2 Petersen, C., 7 Critical questions traditional retailer metrics can’t answer, Nov 9, 2016, retrieved on 14.11.2016, from: http://customerthink.com/7-critical-questions-traditional-retailer-metrics-cant-answer/? Petersen, C.H., Is Omnichannel dead? 5 Factors driving retail transformation, Nov 17, 2016, retrieved on 21.11.2016, from: http://customerthink.com/is-omnichannel-dead-5-factors-driving-retail-transformation/? Richard, The Top Social Media Trends for 2017 – The Influencers’ View, December 06, 2016. Retrieved on 23.12.2016, from: https://www.talkwalker.com/blog/2017-social-media-trends-influencers-view

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@


Léon F. WEGNEZ (by courtesy of) - The convenience of purchases: an absolute requirement of the consumer to favor his free time, “Distribution d’aujourd’hui”, 57ème année, November 2016, Brussels 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“. He 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, the above mentioned article published in the prestigious “Distribution d’aujourd’hui”.

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ERA Hall of Fame 2012-2017, TOP 500 Retail Asia-Pacific, CZ-Summit 2017, Post-Harvest Congress, SCM-ECR Laboratory, and Meeting Innovation 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 fourth quarter of 2016, and allowed us to present them. It is also worth mentioning that immediately after visiting Romania for the first time on the occasion of the 24th International Congress of the International Association for the Distributive Trade (AIDA Brussels), Prof. Dr. Bernd Hallier sent us, in May 2008, a memorable letter we have referred initially in the Journal of the Romanian Marketing Association (AROMAR), no. 5/1998, and also later, in 2010, in the first issue of the Romanian Distribution Committee Magazine. ERA Hall of Fame 2017: Philip Alexander NOBEL European Retail Academy (ERA) has officially announced in December 2016 that the Personality of 2017 of the Hall of Fame of the European Retail Academy is Mr. Philip Alexander Nobel.

Prof. Dr. Bernd Hallier, President of ERA, did choose the Almaty Investment Forum in Kazakhstan (more at www.european-retail-academy.org/urban-revitalization) to proclaim, in the presence of the Swedish Ambassador Christian Kamill and 500 delegates from politics, finance, investors, facility management and education, the late Philip Alexander Nobel posthume the Personality of 2017 of the Hall of Fame of the European Retail Academy. President of ERA pointed out in his statement that Philip Alexander Nobel (at the photo) had been Advisor of the Eurasian Economists Club of Sciences helping to build-up the Astana Club of Nobel Laureates, backing G-global and the topic of Sustainability for the EXPO 2017. For him Philip Nobel was a bridge-builder not only between Europe and Asia but a global thinker and a gentleman dedicated to support young people.

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It is well-known that Dr. Philip Alexander Nobel was the Chairman of House of Nobel and President of Nobel International Fraternity Academy. Like his great-grandfather, Mr. Philip Alexander Nobel demonstrated an enormous passion for the development of both educational and social fields.

Prof. Dr. Bernd Hallier at TOP 500 Retail Asia-Pacific For 13 years already Andrew Yeo, founder of NYCU Media, mainly supported by Euromonitor International and KPMG is publishing the TOP 500 Retailer List of 14 Asian Pacific players (more in ERA-news to come). Part of the Award Ceremony for the Top retailers from all nations is an additional competition via a questionnaire. Here international well-known scientists check the performance and strategies.


The selected three companies as benchmarks being on stage in Singapore at Sofitel Sentosa Resort together with the jury (please see the above picture) were: The Good Guys/Australia (a benchmark far above the Asian Pacific area; as a general electrical retailer The Good Guys analyses their market-share not only within the total market development, but for many segments; the company’s business statistics show that the application for the Retail Asia Awards is not just an ad-hoc decision - but they use questions of strategy and efficiency as their own long-standing tools of self- control); Rustan/Philippines (a department store with 65 years tradition positioned as an oasis for quality, beauty and soothening retail therapy; Rustan aims to offer lifestyle solutions which can be appreciated in value still over time; by this vision and consequences in operations Rustan became a successful brand in the Phillipines); Indomarco/Indonesia (very innovative with mini-markets and convenience stores in a space less than 400 sqm).  The Gold medals for the markets (in alphabetical order) went to Australia/Westfarmers, China/ China Resources Enterprise, Hong Kong/AS Watson Group , India/Future Group, Indonesia/Indomarco Primatama, Japan/AEON, Malaysia/ GCH Retail, New Zealand/Foodstuffs, Phillippines/ SM Retail, Singapore/NTUC FairPrice Co-operative, South Korea/Lotte, Taiwan/ President Chain store, Thailand/ CP All and Vietnam/ Saigon Union of Trading Co-operatives.

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A double-digit growth until 2021 is expected for the Retail in the Asia-Pacific area (which has the youngest population in the World). CZ-Summit 2017 European Retail Academy (ERA) also let us know that from its start the CZ-Summit was supported in Prague by ERA due to the strong relationship with Prof. Jiri Jindra and Prof. Dana Zadrazilova (both VSE Prague) as well as Dr. Tomas Krasny and Dr. Barbora Krasna (at the beginning still from Incoma: now Blueevents). The CZ-summit is considered a success-story of change from socialism to market forces. Meanwhile the CZ-Summit is the biggest conference player for trade within all Central Europe. The 2017-Event is underlining that consumers, distribution and producers all together form “one market�; they fight with different tools like brick and mortar and with different retail brands for one and the same consumer like the internet-trade; and consumers make up their choices each day new!


Post-Harvest Congress European Retail Academy also informed us that within a Global House of Harmony between Economics, Ecology and Ethics the care for Africa has to be empowered, Prof. Dr. Bernd Hallier stating this in view of the strategic tasks for the upcoming five years. The change of climate, the inequality of living standards and the necessary increase of food security worldwide needs an optimization of the value chains with fair trade practices. Knowledge of Logistics, Storage and Processing has to be distributed urgently to SMEs in the Third World. ERA will support the Congress by input and dissemination, by an additional art-exhibition about Food Waste at the Nairobi National Gallery in cooperation with the Association of International Artists (Link) and by workshops for underprivileged school-children.

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SCM-ECR Laboratory ERA also let us know that the 2016 SCM4ECR Conference was jointly organized by the SCM-ECR Laboratory of the Valahia Univerity of Targoviste, together with University of Technology Czestochowa, University Politehnica of Bucharest, Bucharest University of Economic Studies, Romanian-American University and the Romanian Logistics Association ARILOG. Matei Purcarea - at the photo together with Prof. Virgil Popa, Conference Chair - presented the hot topic “The challenge of a distinctive Customer Journey into an Augmented Reality Supply Chain�.


Meeting Innovation It is well-known that ERA was founded at the EuroShop 2005 as a link to Academia. In November 2016 ERA informed us that the first EuroShop Exhibition was organized in 1966 jointly by ISB/today EHI Retail Institute and the Duesseldorf Fair. In 1966 the title of the show was very ambitious: Europe was still in the very early beginning! Today this triennial event has become the World Leader in retail technologies. Its net area exhibition place in 2017 will be about 120.000 square meters.

The 2017 Show from March 5th-9th is innovating itself by segmenting the exhibition no longer in four but seven focal points: Shop Fitting and Store Design, Retail Technology, Expo & Event Marketing, Food Tech & Energy Marketing, POP Marketing, Lighting, Visual Merchandising. The European Retail Academy offers additionally store-checks in the Duesseldorf/Cologne Area on demand.

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Romanian Distribution Committee Magazine, Volume 7, Issue 4, Year 2016  
Romanian Distribution Committee Magazine, Volume 7, Issue 4, Year 2016  
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