Romanian Distribution Committee Magazine, Volume 8, Issue 3, Year 2017 by Romanian Distribution Committee

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Romanian Distribution Committee Magazine

Volume: 8 Issue: 3 Year: 2017 Scientific Review of the Romanian Distribution Committee

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Richard Beresford, Oxford Uk

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Dumitru Borţun, Bucharest

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John L. Stanton, Jr., Philadelphia

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Alexandru Nedelea, Suceava

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Ion Voicu Sucala, Cluj-Napoca

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Luigi Dumitrescu, Sibiu

Carmen Păunescu, Bucharest

Emil Toescu, Birmingham

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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

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Hans Zwaga, Tornio

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

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

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

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SCIENTIFIC COUNCIL

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Andreea Apetrei, Iasi

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Irina Purcărea, Bucharest

George Bobîrnac, Bucharest

Ivona Stoica, Bucharest

Roxana Codita, München

Dan Smedescu, Bucharest

Stefano Duglio, Turin

Constantin C. Stanciu, New York

Larisa-Diana Dorobat, Geneve

Radu Pătru Stanciu, Bucharest

Darius Ilincaş, London

George Cosmin Tănase, Bucharest Oana Patricia Zaharia, Bucharest

EDITOR-IN-CHIEF Theodor Valentin Purcărea

EXECUTIVE EDITOR Victor Lorin Purcărea

ASSISTANT EDITORS Dodu Gheorghe Petrescu Cătălina Poiană Raluca Gheorghe Mihaela Luminița Staicu

PUBLISHING EDITORS Petruţ Radu Ovidiu Călin

ART DESIGNER DIRECTOR Alexandru Andrei Bejan

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Romanian Distribution Committee Magazine Volume: 8 Issue: 3 Year: 2017

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CONTENTS

P. 12. Employee Experience, Learning While Executing, Working on the Organization’s Health, and Contributing to Company’s Innovation Engine

Theodor Valentin PURCĂREA

P. 16. Information and Communications Technologies Drive Digital Disruption from Business to Life on Earth -Part 2Victor GREU

P. 26 Vertical Brand Portfolio Management: The Planning Process George Cosmin TĂNASE

P.30. Competing in Today’s Challenging Retail Environment Theodor PURCĂREA

P.36. (by courtesy of) - Promotion, a Discipline Full of Promises, “Distribution d’aujourd’hui” Léon F. WEGNEZ

P. 40. (by courtesy of) - Shopping Centers in Istanbul, Marco Polo, Asia Pacific Ranking, Division or Unity, Revitalization Concepts, APRCE 2017, Innovation Forum Astana, CORP Vienna, Trade Innovation Bernd HALLIER

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

EDITORIAL: EMPLOYEE EXPERIENCE, LEARNING WHILE EXECUTING, WORKING ON THE ORGANIZATION’S HEALTH, AND CONTRIBUTING TO COMPANY’S INNOVATION ENGINE Theodor Valentin Purcărea Thirty years ago Tom Peters wrote the well-known book entitled “Thriving on Chaos” (Handbook for a Management Revolution, Alfred A. Knopf , New York, 561 pp.).1 On October 25, 1987, Robert Krulwich, the economics correspondent on the “CBS Morning News”, wrote an article published in New York Times, showing that Peters’s thesis - as in the books co-authored before, “In Search of Excellence” and “A Passion for Excellence” - to improve constantly and respond to changing market conditions is the only way for a company to be excellent, but this time telling to middle or senior managers of American corporations to shift gears to keep their customers, going beyond to survive with the excellence formula (decentralized management, flexible production, customer-inspired design and emphasis on innovation and quality), and demanding 600 percent improvement from their staff, dedication to quality being absolute, and challenging everything, changing everything, and improve everything, creating a sense of urgency.2 Twenty years ago, in 1997, McKinsey coined the phrase “war for talent”, as remembered by Josh Bersin, Principal and Founder Bersin by Deloitte, Deloitte Consulting LLP, in December 2013, when he also underlined, among other aspects, that “the talent won”, the above mentioned war being over, and organizations needing to treat every employee as a brand ambassador, while focusing management on coaching and development (not just performance).3 Just a month before, in November 2013, in his presentation at HSM World Business Forum, Milano, Tom Peters has reinforced the fact that “Brand = Talent”, and that “At its core, every relationship-partnership decision (employee, vendor, customer etc.) is a strategic decision about: “Innovate, ‘Yes’ or ‘No’”.4 It is well-known that Tom Peters (a former McKinsey consultant, named the world’s “most highly paid management consultant” in the 1996 Guinness Book of World Records) coined in 1997 the phrase “personal branding” in his essay “The Brand Called You”. It is interesting to note within this framework the fact that this was remembered two month before, in September 2013, in an article entitled “You Are What You Tweet”, and published in the American magazine “The New Yorker” a week after The Oxford Dictionaries Online added the term “selfie”.5 As we remembered last year, Tom Peters showed in an interview for McKinsey Quarterly, September 2014, among other aspects, that to deal with the insane pace of change involves living to get smarter and to learn new things, going up the value-added chain beyond the kinds of 12

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tasks and roles that can be automated. In 2016, on the occasion of a Deloitte Private Company Managers Annual Meeting in Toronto, Tom Peters also reminded us of the three rules highlighted by Deloitte’s representatives (Michael E. Raynor and Mumtaz Ahmed, Authors, in “The Three Rules: How Exceptional Companies Think,” Publisher: Portfolio; First Edition May 30, 2013) of how exceptional companies think: better before cheaper; revenue before cost; there are no other rules. And on the same slide Peters presented the three rules underlined by Jeff Colvin, Fortune (“The Economy Is Scary … But Smart Companies Can Dominate”) of how smart companies can dominate in a scary economy: they manage for value, not for EPS (Earnings per Share); they get radically customer-centric; they keep developing human capital.6 The 2017 Deloitte Global Human Capital Trends was entitled “Rewriting the rules for the digital age” because of change at an accelerating rate, which creates new rules for business and for HR within the so-called “Fourth Industrial Revolution” (Klaus Schwab, The Fourth Industrial Revolution, World Economic Forum, 2016) or the “Big Shift” (John Hagel, John Seely Brown, and Lang Davison, “The Big Shift: Measuring the forces of change,” Harvard Business Review, July - August 2009).7 Deloitte underlined the centrality of the employee experience, which is affected by leadership, organization structure and teams, career mobility, learning, diversity, employment brand, and HR services.8 And there is no doubt – as recently argued by two members of the Consortium for Advancing Adult Learning & Development (CAALD), convened by McKinsey & Company – that organizations have to learn while executing in order to adapt continually.9 In September 2012 we cited (Karl) Albrecht’s Law - “Intelligent people, when assembled into an organization, will tend toward collective stupidity” – within the context of approaching the topic of “The organizational health, the emotional memory of the organization, the positive associations of CRM capabilities, and the desired change to drive organizational performance.”10 But, beyond the humoristic quote, let’s come back to this year… to contradict again the above mentioned law on the basis of the recent confirmed evolutions. To work on the organization’s health (defined by McKinsey as the organization’s ability to align around a common vision, execute against that vision effectively, and renew itself through innovation and creative thinking) by redefining how to connect, engage, and communicate

with its employees, doing what the organization is already doing but doing it differently, it is a recent McKinsey’s recommendation based on the proofed conviction that balancing shortterm performance and long-term health is the best way to run a business, conviction redoubled recently by new evidence confirming the achievement of tangible performance gains (not only measurable improvements in their organizational well-being) in as little as 6 to 12 months by the companies that work on their health.11 All the more so because encouraging employees to work in more agile ways, within the context of a culture of continuous learning and improvement, is one of the steps (alongside focusing C-level attention on growth and setting clear goals for analytics) recommended by McKinsey to be taken in the current digital age by executives and their companies in order to drive organic growth.12 Talent is attracted and strategic options are created by growth while generating financial resources to fund new moves.13 And into the necessary conversation around adaptive innovation (to adjust to the fast-changing needs of target markets; driven by strategic internal and external relationships) and value (which can be cocreated via adaptive innovation), both employees and customers (both being important recipients of value together with value-chain partners, investors, the media etc.) are crucial contributors to company’s innovation engine.14 The 21st annual event KMWorld 2017 (The Knowledge Management & Enterprise Solutions Conference), which will take place on November 6-9, 2017, in Washington, DC, has the theme “People Power, Thinking & Tech”.15 As underlined by the organizers, people are at the core of knowledge sharing and the key to high functioning organizations. There is no wonder what the tracks at this above mentioned event include: Knowledge management (KM) strategies & practices: People; Digital workspace of the future; Social collaboration (to interact and share information to achieve common goals); KM strategies & practices: Processes; KM tools & techniques (it is important to select the right mix of KM approaches, chatbots, and agile frameworks); Learning, change, & culture; km strategies & practices: Value & management (a challenge for KM being always to provide value, ROI, and show measurable results); Innovation, future-proofing, & cognitive tech; Content, knowledge, & learning from failure.16 Looking at this challenging theme of “People Power, Thinking & Tech”, four articles come to our mind: ▪ two articles published on the blog of Saffron Interactive – “Too much data, too little insight”17 and “Leveraging the IKEA effect to create an LMS your learners love”18 – which highlighted the problems posed by knowledge management, and revealed (going beyond Bersin’s Predictions for 2014 report concerning the need to improve knowledge contribution and extend learning architecture in order to improve company’s performance) the findings of a Saffron Interactive survey, such as: when needing to find insights and information at work people go overwhelmingly to Google (instant and easy to use; information from the whole of the internet, but the most relevant information being difficult to filter), with the second most popular response being to “ask a colleague” (instant and contextual; but a trusted colleague can leave the company, taking with him all of his knowledge and expertise, the average time a person stays in a job dropping to 4.4 years), from here resulting that the perfect bridge between Google and asking a colleague is the LMS (like my status); ▪ an article published in Current Sociology journal of International Sociological Association – entitled “The Unknown in Process Dynamic Connections of Ignorance, Non-Knowledge and Related Concepts”19 – which underlined, for example, that: different types of unknowns are linked together dynamically; special cases of ignorance are preceded by ignorance; negative knowledge and nonknowledge can also causally develop out of ignorance; the search for new knowledge can potentially lead to more and more unknowns instead of new knowledge, because of formerly valid knowledge which can be found invalid (see also Table and Figure below).

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Source: Gross, M., The Unknown in Process Dynamic Connections of Ignorance, Non-Knowledge and Related Concepts, Current Sociology, September 2007, Vol. 55(5), pp. 751 and 754

▪ a McKinsey’s article – entitled “Creativity’s bottom line: How winning companies turn creativity into business value and growth”20 – in which the authors are arguing that creativity (which generates business value) is at the heart of business innovation (which is the engine of growth), effective creativity coming from “working the problem”, and attracted the attention on the importance of not forgetting about the art of marketing, while focusing increasingly on the science of marketing (including performance marketing, marketing AI, and advanced analytics). Allow us to paraphrase the reputed “Father of modern marketing”, Philip Kotler (whose latest book “My Adventures in Marketing: The Autobiography of Philip Kotler” was published in June this year; Editorial Reviews by Tom Peters, Al Ries, and Jim Collins),21 and to add finally that if the good news is that marketing is the art of brand building, the bad news is that marketing takes a lifetime to master. Theodor Valentin Purcărea Editor-in-Chief

References

(Endnotes) 1 Peters, T., Thriving on Chaos, retrieved on 23.09.2017, from: http://tompeters.com/2008/09/thriving-on-chaos/ 2 Krulwich, R., Books and business; the joy of flux, New York Times, October 25, 1987, retrieved on 23.09.2017, from: http://www.nytimes.com/1987/10/25/books/books-and-business-the-joy-of-flux.html? 3 Bersin, J., Predictions for 2014, Building A Strong Talent Pipeline for The Global Economic Recovery —Time for Innovative and Integrated Talent and HR Strategies, Bersin by Deloitte, Deloitte Consulting LLP, December 2013, retrieved on 24.09.2017, from: https://employeeengagement.com/wp-content/uploads/2014/01/Predictions2014_JB_Final.pdf 4 Peters, T., HSM World Business Forum, Milano, November 5, 2013, retrieved on 24.09.2017, from: http://tompeters.com/slides/event-slides/2013/ 5 Tulathimutte, T., You Are What You Tweet, September 3, 2013, retrieved on 24.09.2017, from: https://www.newyorker.com/business/currency/you-are-what-you-tweet 6 Peters, T., Deloitte, Private Company Managers Annual Meeting, Toronto, April 19, 2017, retrieved on 23.09.2017, from: http://tompeters.com/slides/event-slides/ 7 Bersin, J., Pelster, B., Schwartz, J., van der Vyver, B., Introduction: Rewriting the rules for the digital age, 2017 Global Human Capital Trends, February 28, 2017, https://dupress.deloitte.com/dup-us-en/focus/humancapital-trends/2017/introduction.html 8 Bersin, J., Flynn, J., Mazor, A., Melian, V., The employee experience: Culture, engagement, and beyond, 2017 Global Human Capital Trends, February 28, 2017, retrieved on 23.09.2017, from: https://dupress.deloitte. com/dup-us-en/focus/human-capital-trends/2017/improving-the-employee-experience-culture-engagement.html? 9 Edmondson, A. and Saxberg, B., Putting lifelong learning on the CEO agenda Commentary McKinsey Quarterly September 2017, retrieved on 07.09.2017, from: http://www.mckinsey.com/business-functions/ organization/our-insights/putting-lifelong-learning-on-the-ceo-agenda? 10 *** http://holisticmarketingmanagement.ro/RePEc/hmm/v1i1/7/1.pdf 11 Gagnon, C., John, E. and Theunissen, R, Organizational health: A fast track to performance improvement, McKinsey Quarterly, September 2017, retrieved on 07.09.2017, from: http://www.mckinsey.com/businessfunctions/organization/our-insights/organizational-health-a-fast-track-to-performance-improvement? 12 Ahuja, K., Hilton Segel, L., Perrey, J., .Mastering three strategies of organic growth, McKinsey’s Survey August 2017, retrieved on 22.08.2017, from: http://www.mckinsey.com/business-functions/marketing-and-sales/ our-insights/mastering-three-strategies-of-organic-growth? 13 Ahuja, K., Hilton Segel, L., Perrey, J., The roots of organic growth Article McKinsey Quarterly August 2017, retrieved on 13.08.2017, from: http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/ the-roots-of-organic-growth? 14 Nour, D., Three Ways to Co-Create Business Value (and New Products and Services) via Adaptive Innovation, retrieved on 06.08.2017, from: https://www.marketingprofs.com/articles/2017/32555/three-ways-to-cocreate-business-value-and-new-products-and-services-via-adaptive-innovation? 15 *** http://www.kmworld.com/Conference/2017/Default.aspx 16 *** http://www.kmworld.com/Conference/2017/Program.aspx 17 Neligan, R., Too much data, too little insight, retrieved on 24.09.2017, from: http://saffroninteractive.com/article/too-much-data-too-little-insight/ 18 Tyas, J., Leveraging the IKEA effect to create an LMS your learners love, January 26, 2016, retrieved on 24.09.2017, from: http://saffroninteractive.com/leveraging-the-ikea-effect-to-create-an-lms-your-learnerslove/#more-11957 19 Gross, M., The Unknown in Process Dynamic Connections of Ignorance, Non-Knowledge and Related Concepts, Current Sociology, September 2007, Vol. 55(5): 742–759, International Sociological Association, SAGE, DOI: 10.1177/0011392107079928 20 Brodherson, M., Heller, J., Perrey, J. and Remley, D., Creativity’s bottom line: How winning companies turn creativity into business value and growth Article June 2017, retrieved on 06.08.2017, from: http://www. mckinsey.com/business-functions/digital-mckinsey/our-insights/creativitys-bottom-line-how-winning-companies-turn-creativity-into-business-value-and-growth? 21 *** http://www.philkotler.com/2017/07/15/my-adventures-in-marketing-the-autobiography-of-philip-kotler/

INFORMATION AND COMMUNICATIONS TECHNOLOGIESDRIVE DIGITAL DISRUPTION FROM BUSINESS TO LIFE ON EARTH -PART 2Prof. Eng.Ph.D. Victor Greu

Abstract As premises of the digital disruption ( DD), the paper shows that Information and Communications Technologies (ICT) is further influencing all areas of humankind activity, determining the crucial role of ICT as main driving factor for the progress of Information Society (IS) toward Knowledge Based Society (KBS) and generally for the life on Earth. The paper analyses the DD evolution, which is strongly linked with ICT evolution, mainly as content and speed of development, from these factors coming the most of complexity and difficulty of analysing and foreseeing DD, in general DD being a set of dynamic and complex processes, which are interacting with ICT fast growing potential and are depending on the economical/social context. Ultimately, DD is basically generated between two pillars: technology and customer/humankind needs. The fast changes of the ICT context are one of the factors which determine the DD hardest requirements for the incumbents, because they have to continuously adapt to these rapid and complex changes in order to find the appropriate decisions for their business. The paper analysis is focused on the general causes of DD and its main driving factors are also detailed by their essential components and directions. Among these factors, the multiplication power of ICT products and services, generally associated with the digital processing but in reality being much more diverse and complex, is now â&#x20AC;&#x153;multipliedâ&#x20AC;? by the new increasing power of mobile and broadband connectivity which enables unprecedented applications, processing performance and huge amounts of data. In addition, the challenge to process and storage such amounts of data (provided by IoT and ... more) is analysed, along with solutions oriented on new models, design and algorithms for DD and generally for actual ICT role in IS toward KBS. As a consequence, the concrete problem the ICT development and generally all the decision makers have is to optimize the development/investments by a complex set of criteria, from revenues to social needs and environment, i.e. it is 16

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necessary to continuously adapt and improve the decision processes according to the actual realities and the last estimations of ICT/IS/KBS development, with a deeper approach for the processes which deal with data, information and knowledge. This approach leads to the necessity of using properly refined knowledge for the further development of DD/ICT/IS/KBS. A relevant given example is the field of human genome and generally in genetic engineering, where ICT state-of-the-art products and applications enable long expected results for people’s lives. Also, the unprecedented performance of advanced AI (“deep learning”) applications could provide one of the most expected contributions to refining knowledge for the surviving race against climate changes. An actual practical approach for the leaders facing DD is to watch start-ups, which have impressive flexibility and dynamic versus the big companies. Therefore, the leaders have to learn from the opportunities of digital ideas, connectivity and exploiting customer needs and behaviour in the context of ICT “storm“of offers. In general, “looking at the right data” is the first step toward an optimal “edge” of DD and in the same time the initial phase of the main goal of properly refined knowledge. The most important conclusion of the paper is that properly refined knowledge should mean, in each domain of development/implementation and in every case, to harmonize (globally optimize) all the policies, projects and applications with state-of-the-art or updated results/requirements from all domains which are or could be involved/affected today or tomorrow, at Earth scale, by DD/ICT development.

Keywords: digital disruption, Internet of Things, information society, knowledge based society, advanced artificial intelligence, start-ups, human genome, mobile and broadband connectivity, Maslow Pyramid.

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

1. Generating Digital Disruption between technological innovations, revenue and customer expectations

The Digital Disruption (DD) complex processes have an actual impressive impact on every industry and generally on humankind life, as Information and Communications Technologies (ICT) are the main driving factor of the progress of the Information Society (IS) toward Knowledge Based Society (KBS), generating complicate and dynamic processes at Earth scale, requiring, as a consequence, a timely analysis due to their crucial importance and exponential speed of development [4][5][6][21]. Remembering Maslow Pyramid, we can observe that in our days, in a very divided and imbalanced World, the basic needs are still important but well covered on the developed side of Earth, while the other side are still facing the lack of their fulfilment. In the same time, the statistics show that the Maslow Pyramid middle needs are continuously growing, on both sides of the Earth population, i.e. for rich and for poor, among them communication, connectivity and even entertainment being remarkable. This growing could be a certain indicator of the ICT penetration power and efficiency,

among other industries, but in the same time there is possible a two edge “sword” effect– as the ICT exponential pace of development could produce negative consequences when policies/investments are not very correct justified[13][8].

tsunami is wishful thinking. It cannot be stopped; it can only be surfed on”

Here it is essential to mention that although the above growing is referring to ICT industry, its impact is further influencing all areas of humankind activity and more, as we have already presented the crucial role of ICT as main driving factor of the progress of IS toward KBS and generally for the life on Earth and ... beyond [15].

In addition, here it is the point to observe that the fast changes of the ICT context are one of the factors which determine the DD hardest requirements for the incumbents, because they have to continuously adapt to these rapid and complex changes in order to find the appropriate decisions.

This advice is important for the analysis premises, as it express a prominent feature of DD referring to its dynamic and perspective.

This challenge is very clear presented This way we can consider that DD is ba- along with the corresponding approach and sically generated between these two pillars: objectives in [11] as: technology and customer/humankind needs. “The development of new competencies As a matter of fact, the real picture of revolves around the capacities to be more DD is much more complicated and that is why agile, people-oriented, innovative, customerthe next analysis is intended to identify the centric, streamlined, efficient and able to main factors and their relations in DD genera- induce/leverage opportunities to change the tion and evolution. unadapted status quo. Before any other considerations, it is The goal is an ability to move faster important to notice that the DD evolution is from an increased awareness and forecast strongly linked with ICT evolution, mainly as capability regarding changes to decisions and content and speed of development, as from innovation, keeping in mind those (potential) these factors it is coming the most of comchanges”. plexity and difficulty of analysing and foreseeing. More than theses, the general causes of DD and its main driving factors are also With other words, DD is a set of dynamdetailed by their essential components and ic and complex processes, which are interacting with ICT fast growing potential and are de- directions:

pending on the economical/social context[16] “Present and future shifts and [17]. changes can be induced by several causes, For example, coming back to Maslow often at the same time, on the levels of Pyramid, we have to observe that moral needs customer behaviour and expectations, new are on the top, but for many people, includ- economic realities, societal shifts (e.g. aging ing sometimes decision (or policy) makers, populations), ecosystem/industry disruption these could be “too high” to be considered or and (the accelerating adoption and innovation reached versus the other needs and therefore regarding) emerging or existing digital technologies. “neglected”. Also from the start it is important to mention that the market rules are still the main factors which influence the development of any industry, but remember also the two edge “sword” possibility[16][13][21]. Now the DD general picture between the mentioned pillars is better framed, but an also relevant point of view is given by [14]:

In practice, end-to-end customer experience optimization, operational flexibility and innovation, are key drivers of digital transformation, along with the development of new revenue sources and informationpowered ecosystems of value, leading to business model transformations”.

After the above general considerations, a concrete example [14] could be very useful “Just waiting for the end of the digital for understanding the challenge of the ICT

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speed reflected on DD: <<“Books gestate very slowly,” veteran publishing entrepreneur Richard Nash observed at IDPF’s Digital Book 2015 conference at BookExpo America in New York City ... “But the life-cycles of start-ups are much shorter”>> Observing the start-ups advice, this example is completed by a relevant link with what we above have called “ICT penetration power and efficiency”, expressing again the amazing evolution and implications of smartphones (“Mobile is the first screen”): “Talk about things that change fast: In just five years, we’ve gone from mobile phones as disruptive ‘second screens’ to being the first, and sometimes only, screen in users’ lives. It goes without saying that software products must work well on smartphones. For novels, that challenge is quite simple. But if you seek to entertain with media, to educate with interactivity or to empower with reference and search, the mobile screen is a tougher beast to satisfy. Alas, customer expectations do not yield to technical complexity”. Although this example comes from the books industry, it is easy to observe its concrete relevance for all activity domains when emphasizing the customer expectations and indicating which should be the incumbents behaviour in order to “... stay relevant and healthy in a rapidly evolving environment. Publishers must do whatever it takes—including reinventing themselves, hiring outsiders, investing in new media— to be the best players at serving authors and readers by putting them in touch as much and as deep as possible. Books (in any format) are just one of the very many touch-points between authors and readers”. Coming back to the main features of DD generation, it is important to reveal that although technological innovations, revenue and customer expectations were transparently prominent in the above considerations, the crucial role of ICT in DD generation has very complex and complicate aspects to be, at least shortly, analysed. In fact it is necessary to reveal the main factors that explain the mentioned “ICT penetration power and efficiency”, as these are the real engines of DD evolution. In other terms, we have to see some actual features of the above “technological innovations”, as ICT development is impressing not only by its exponential pace, but also by the dramatic ways it leverages the development of all industries and areas of humankind activity. First of all, the multiplication power of ICT products and services [15][20], generally associated with the digital processing but in reality being much more diverse and complex, is now “multiplied” by the new increasing power of mobile and broadband connectivity which generates unprecedented applications and processing performance. Just for a flavour of this aspect it is worth to imagine how this new power will increase with the emergent IoT and 5G technologies, at Earth scale[7][18][10][9][21]. Some short data could again be useful examples for understanding how much the next performances could mean if we notice what we already have[1]: “Greater connectivity around the world is one of the factors facilitating disruption. The number of mobile phones in use has increased rapidly over the last ﬁfteen years. By 2016, total volume (mobile phones) increased to 8.5 billion compared to a population of just 7.3 billion. There are more phones in use than people on the planet... The number of smart phones has increased from less than one billion units in 2010, to approximately 3.2 billion last year and 4.1 billion this year. ...We expect the number of phones in use to peak at 9.0 billion in 2020 as the total stock of smart phones increases to just under six billion units”

As mobile phones are only a part of the picture, the contribution of IoT could be only aproximatelly foreseen[1][23]: “According to our dataset, the number of “Digitally Connected Devices” has increased from less than one billion in 2009 to around 5.0 billion in 2014. We claim 2016 as the year of singularity when the number of digitally connected devices, equalled the number of people on the planet. From a level of around 7.4 billion this year, we forecast the number of digitally connected devices will increase to around 11 billion by 2020, peaking around 15 billion by 2030... According to Gartner, there will be nearly 21 billion devices on the internet of things by 2020. ABI Research estimates that more than 30 billion devices will be wirelessly connected to the internet by 2020. 50 billion appears to be a reasonable assumption assuming our 11 billion digital connected devices is correct”. Remaining in actuality with ICT performances and features, emphasizing this time the IoT side, a crucial question is arising: how to process and storage such amounts of data (provided by IoT and ... more)? As we already have presented [15][19], this “iceberg” is one of the dramatic challenges of the future, not only for ICT, but for incumbents and eventually for humankind too. To imagine just the tip of this “iceberg”, again some numbers [1][23] are here relevant: “In 2015, we probably produced more every day since the birth of the printing press in the first 555 years. The rate of increase is exponential. Videos, photos, audio messages, blog posts are streaming onto the internet in ever increasing proportion. That’s lots and lots of information and lots of need to store. According to the Cisco Cloud Global Index 2015, annual global data centre traffic will reach 10.4 zettabytes by the end of 2019, up from just over 3.4 zettabytes in 2014. Global cloud traffic will reach 8.6 Zettabytes up from 2.1 ZB over the same period. Data created by the internet of everything will exceed 500 ZettaBytes by 2020 up from 150 ZettaBytes in 2015. That’s over half a Yottabyte each year with more to come. That’s a lot of data. How big is a Zettabyte - think Kilobyte (1) Megabyte (2) - Gigabyte (3) - Terabyte (4) - Petabyte (5) - Exabyte (6) - Zetabyte (7) and still to come yottabyte (8). Figures in brackets are the power factors from the humble Kilobyte. Consider the Encyclopaedia Brittanica is approximately 24 GB in total!” Without considering that our analysis is completed here (far for intending to be exhaustive), we may conclude that the last observations just showed the approximate size and the prominent issues of DD evolution in the general contextof actual ICT development. In fact it is important to observe that the most difficult issues move from “hard” to “soft”, i.e. from applications to models, design and algorithms or, at an other layer, from data to information and knowledge.

2. Find new edges for the digital disruption by ICT power and properly refined knowledge

As a consequence of the above conclusion, it is necessary to further analyse the relevance of models, design and algorithms for DD and generally for actual ICT role in IS toward KBS[21] [19][22]. More than this, one could ask which is the relationship between this relevance and the mentioned layer/plan from data to information and knowledge. Part of the answer is that the mentioned iceberg, although has an impressive tip by its figures (for example 500 ZettaBytes generated by 2020), reveals that, in spite of the performances provided by technology, the decision makers will have to face more and more 20

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complex problems in order to efficiently use this technology and especially the huge amount of data provided at Earth scale, even before IoT will become extended as it is foreseen today. As we have already estimated [19], we have just arrived to the concrete problem the ICT development and generally all the decision makers have: to optimize the development/ investments by a complex set of criteria, from revenues to social needs and environment. To solve these kinds of problems, including the case of DD, simply using analytics and other performant hard or soft technologies seems that soon it will be not enough. too.

That is why we consider that the optimal solutions must include other “layers/approaches”

This way it is now easier to understand the necessity to find new models, design and algorithms along with a deeper approach for the processes which deal with data, information and knowledge[21][19]. From the beginning it is important to notice that by “new models” it is not necessary to understand new business models (which is only a particular case), but it is sure that these “new models” will enable, along with the other mentioned components, the DD processes as part of ICT development penetrating all activity domains. Again an example could clarify the approach of such complex processes, starting from the most relevant scenario, created by the IoT expansion[1]: <<To the list of digital devices we add home appliances, connected clothing, medical devices, transportation, buildings and cities. Smart bodies, smart homes, smart cars, smart grids, smart farms, smart roads, smart cities … “Get Smart” will take on a whole new meaning to digital urgency. “Things” as an “inextricable mixture of hardware, software, data and service is the legal deﬁnition. People will be connected to the internet via internal and external devices. The pacemaker hooked up to the mainframe offering real time analytics. The digital dispenser offering feedback on medicine consumption and dosage levels. The nano bots coursing through the veins relaying important data on cell counts, sugar levels and genomic disorders. As the cost of chips fall, along with the cost and time of processing the data, the “nerd nirvana nears”>> Facing such unprecedented and fascinating scenarios is the most prominent challenge of the near future, for ICT specialists, for incumbents and ... humankind, as the above example is continued: “Data storage is made available and the data challenge becomes enormous. What secrets to predictive modelling will be extracted from the huge data ﬂow? Access to market has never been easier and cost of acquisition has never been lower. It is an exciting time for those with the right attitude and the right software to process the data and provide the service”. Apparently, the last observation is optimistic, because the “Access to market has never been easier and cost of acquisition has never been lower”, but the real problem is still, in essence, as we have defined it above: to find “the right attitude and the right software to process the data”. Continuing and paraphrasing the example approach, but adding the fast and ever changing ICT context we have already presented [15], we can say that “being smart will never be the same”. About this never ending complex process challenges, we have already made some considerations, where human mind and AI are in a progressive and dramatic competition [7] [22].

At this point we may consider that the premises of this section title are more than clear, with their good and bad parts, but this does not mean that the solutions are also easy to find or understand, in the actual and coming DD/ICT realities. Perhaps a good start to those solutions is very well expressed by [2]: “Your company may have used technology to give it an edge by reducing costs, automating existing processes or turning analog business models into electronic channels. But sharpening any edge becomes increasingly difficult over time. After all, as soon as others figure out how to automate the same processes, where’s the edge? How can companies create a new edge, and sustain it, when grinding away at their current strategies delivers fewer and fewer results?” Remembering the two edge “sword” feature of ICT is only a partial similarity, as any new solution or “miracle” could have negative consequences too and generally a possible competition with other (better) solutions – which is the case intended in the current example of DD. Remembering the two edge “sword” feature of ICT is only a partial similarity, as any new solution or “miracle” could have negative consequences too and generally a possible competition with other (better) solutions – which is the case intended in the current example of DD. Like many others references, this too confirmed the ways to exploit the advantages of digital economy:

cutting technologies for such edges: “Technologies such as smartphones, tablet computing, social media, big data, analytics, cloud computing, remote sensing and others provide the raw materials to forge a new edge”. Still, the most practical observation in this case is expressed as a conclusion of the above example: “Any company today —large or small, old or new — can use this digital technology to create a winning edge for its business and, perhaps, its industry”. Although this does not near us to the “iceberg” bottom, here it is worth to recall that one of the actual practical approach for the leaders facing DD is to watch start-ups [3]: “How can companies identify technologies or start-ups that are truly disruptive? It is difficult for companies to distinguish the truly disruptive start-ups from the hype. This is because most start-ups never really achieve critical mass. However, I think what companies can do is pay attention to where start-ups have identified and are addressing a customer pain point. They should ask themselves: “Where are some of these digital start-ups solving a problem for my customers where I’m doing less of a good job? What are the areas where my business model is making our customers unhappy?” Therefore, one of the actual practical approaches for the leaders facing DD is to watch start-ups, which have impressive flexibility and dynamic versus the big companies. Then the leaders have to learn from the opportunities of digital ideas, connectivity and exploiting customer needs and behaviour in the context of ICT “storm“ of offers.

“The answer is digitalization. A digitalized business creates value and revenue from digital assets. It goes beyond further rounds of process automation to transform processes, More than this, the real advance comes business models and customer experience by exploiting the pervasive digital connections when making concrete steps toward refined between systems, people, places and things” solutions: We still consider that this approach is closer to the tip of the mentioned iceberg than to the bottom, i.e. it does not bring details nearing the elaborated solutions, but positively brings a subtle feature of the road to solutions (“sharpening any edge becomes increasingly difficult over time”) and shows the 22

“Is there a way in which companies can anticipate potential future disruptions? Yes, companies can spot the early warning signs of disruption by looking at the right data. There are three categories of data – I call these lagging, current and leading indicators. Lagging indicators are often highly

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accurate and precise but they only reflect past events that can’t be changed. Most financial information, including profitability, is a lagging indicator. A company’s profits today are a function of what it did for customers and how it responded to competition in the past. Current indicators, on the other hand, are data about where a company stands at the moment. Examples of current indicators include inventory levels or the pipeline of opportunities. Finally, leading indicators provide information on where a company might be headed”.

In a concrete approach, to realize the complex processes which provide properly refined knowledge, a lot of factors and criteria should be implemented. A relevant example could be the case of the amazing progress we see today in the field of human genome and generally in genetic engineering, where ICT state-of-theart products and applications enable long expected results for people’s lives.

As a matter of fact we have already presented [7] what impressing advance the We consider that measuring such computing power has induced in the early complex processes of DD is one of the decoding of genetic disorder at new born interesting challenges, as it provides forward babies, in order to increase the chance to save their lives by critical time treatment. steps to the core of “iceberg”. Here properly refined knowledge is To be more concrete, “looking at the built up from all prior results and all new right data” is the first step toward an optimal “edge” of DD and in the same time the initial conclusions involving both ICT and medical phase of the main goal of properly refined technical and human issues. knowledge. More than these, the implementation of As we have pointed in the first section, the applications should direct the new models the road from data to knowledge is passing and design details for future improvements, through information, but the paradox is that but in the same time all the consequences the huge amount of data of the future will just (including the negative ones) must also be make this path longer and that is why we need considered and harmonized, for the ICT, for better models and algorithms for ICT complex e-health, for ethical, for legal, environmental and for other interdisciplinary reasons. and performant applications[21][7][19][22]. In general, in our opinion, properly refined knowledge means, in each domain of development/implementation and in every case, to harmonize (globally optimize) all the policies, projects and applications with stateof-the-art or updated results /requirements A real progress is expected from from all domain which are or could be advanced AI, especially from “deep learning” involved/affected today or tomorrow, at Earth applications [7][15][19], which eventually will scale. make the most difficult step, from information Anyway, it is important to put in top to knowledge. of requirements humankind life on Earth From this step, to reach the “properly ecosystem, for today and tomorrow, then refined knowledge” it is not only a very difficult, consider economical, financial or other issues. but perhaps a continuously race for optimal Just imagine what complexity and solutions, as this goal is itself ever-changing with the complex context of ICT/IS/KBS(i.e. a dramatic implications will have the IoT development at Earth scale, if the same sort of Fata Morgana). (properly refined knowledge) algorithm would Still, the last observation does not be applied. mean that it is not necessary to continuously The practical question is: Would it be adapt and improve the decision processes applied (at least with minimal requirements, according to the actual realities and the last although it should be more complex )? estimations of ICT/IS/KBS development. At this phase, the role of Big Data and AI (artificial intelligence) is prominent, but it is worth to notice that actual Big Data applications (usually called data analytics) are sometimes modest versus the goal.

As we have already mentioned [13][24], these processes include the essential factors of IS/KBS progress, where ICT is prominent, but humankind survival and Earth ecosystem should be first. The implications of these decisions include survival and Earth as it is clear that ICT industry itself is going to have a significant contribution to carbon footprint, but the indirect consequences by penetrating all industries and activity fields could have really dramatic effects, if speaking only about climate changes issues, without adding Earth resources fading and complex influence on humankind behaviour, life and evolution [24] [18] [13].

fast growing potential and are depending on the economical/social context. Ultimately, DD is basically generated between two pillars: technology and customer/humankind needs. The fast changes of the ICT context are one of the factors which determine the DD hardest requirements for the incumbents, because they have to continuously adapt to these rapid and complex changes in order to find the appropriate decisions for their business.

One of the actual practical approaches for the leaders facing DD is to watch start-ups, which have impressive flexibility and dynamic versus the big companies. Therefore, the leaders have to learn from the opportunities It is a matter of responsibility and of digital ideas, connectivity and exploiting imagination to understand the importance customer needs and behaviour in the context and complexity of the needed research and of ICT “storm” of offers. monitoring, at Earth scale, for all the above The paper analysis is focused on the challenges, including first environmental, general causes of DD and its main driving economical and humankind behaviour/ factors are also detailed by their essential evolution. That is why, the unprecedented components and directions. performance of advanced AI (“deep learning”) applications could provide one of the most First of all, the multiplication power expected contributions to refining knowledge of ICT products and services, generally for the surviving race against climate changes associated with the digital processing but in – to mention only our worst “nightmare”. reality being much more diverse and complex, is now “multiplied” by the new increasing In this context, refining knowledge, power of mobile and broadband connectivity including DD evolution, must be a learn- which generates unprecedented applications, decide-act continue (circle) process including processing performance and huge amounts all mentioned steps, state-of-the-art of data. technology and science, along with a lot of ... human wisdom. Subsequently, the challenge to process and storage such amounts of data (provided by IoT and ... more) is analysed, along with the solutions oriented on new models, 3. Conclusions design and algorithms for DD and generally for actual ICT role in IS toward KBS. As a consequence, the concrete problem the ICT development and generally all the decision makers have is to optimize the development/investments by a complex set of criteria, from revenues to social needs and environment, i.e. it is necessary to continuously adapt and improve the decision processes In addition, DD evolution is strongly according to the actual realities and the last linked with ICT evolution, mainly as content estimations of ICT/IS/KBS development, with and speed of development, as from these fac- a deeper approach for the processes which tors it is coming the most of complexity and deal with data, information and knowledge. difficulty of analysing and foreseeing DD, in This approach leads to the necessity general DD being a set of dynamic and com- of using properly refined knowledge for the plex processes, which are interacting with ICT further development of DD/ICT/IS/KBS. A Paper’s premises show that ICT impact is further influencing all areas of humankind activity and more, determining the crucial role of ICT as main driving factor of the progress of IS toward KBS and generally for the life on Earth and ... beyond.

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relevant given example is the field of human genome and generally in genetic engineering, where ICT state-of-the-art products and applications enable long expected results for people’s lives. Also, the unprecedented performance of advanced AI (“deep learning”) applications could provide one of the most expected contributions to refining knowledge for the surviving race against climate changes. The most important conclusion is that properly refined knowledge should mean, in each domain of development/implementation and in every case, to harmonize (globally optimize) all the policies, projects and applications with state-of-the-art or updated results /requirements from all domains which are or could be involved/affected today or tomorrow, at Earth scale, by DD/ICT development.

References [1] John Ashcroft, Six Things Everyone Should Know About Digital Disruption, six rules of disruption, Published on Jul 6, 2016, https://www.slideshare.net/jkaonline/six-things-everyone-should-know-about-digital-disruptionpdf [2] Mark P. McDonald, The digital edge, © 2012 Gartner, Inc, http://www.gartner.com/books [3] Rita McGrath, Fast Thinking: Reinventing Strategy for a Digitally Disrupted World, Interview with Rita McGrath, Digital transformation review, no.07 february 2015, http://ebooks.capgemini-consulting.com/digitaltransformation-review-7/files/assets/basic-html/page12.html [4] Victor Greu, Information and communications technologies drive digital disruption from business to life on earth -(Part 1), Romanian Distribution Committee Magazine, Volume 8, Issue 2, Year 2017. [5] Ilse van den Berg, The six rules of disruption (Nigel Moulton keynote address at the Dell EMC Forum on Thursday, 9 March 2017), 10 March 2017, http://www.bizcommunity.com/Article/196/379/158887.html. [6] Jacques Bughin, Nicolas van Zeebroeck, The case for offensive strategies in response todigital disruption , 2017. [7] Victor Greu, Developing information and communications technologies with more artificial intelligence, using artificial intelligence, when internet of things is ’’intelligence everywhere’’-(Part 1), Romanian Distribution Committee Magazine, Volume 7, Issue 4, Year 2016. [8] Mark Knickrehm, Bruno Berthon, Paul Daugherty, Digital disruption: The growth multiplier Optimizing digital investments to realize higher productivity, https://www.accenture.com/_acnmedia/PDF-4/Accenture-StrategyDigital-Disruption-Growth-Multiplier.pdf [9] Kathy Pretz, A toolkit for building energy-efficient communications networks, IEEE The Institute, May 2016. [10] 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.

[11] *** Digital transformation: online guide to digital business transformation, https://www.i-scoop.eu/digital-transformation/ [12] ***What Is Digital Disruption?, Oxford College of Marketing, http://blog.oxfordcollegeofmarketing.com/2016/02/22/what-is-digital-disruption/ [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] Gareth Cuddy, Digital disruption and innovation in brief, 2015 Digital Book World. [15] Victor Greu, The Exponential Development of the Information and Communications Technologies – A Complex Process Which is Generating Progress Knowledge from People to People, Romanian Distribution Committee Magazine, Volume 4, Issue2, Year 2013. [16] Mike Shaw, Digital disruption impacts every industry. Here’s how to win in an era of constant change, enterprise.nxt, 2016 Hewlett Packard Enterprise Development LP, https://www.hpe.com/h20195/V2/GetPDF. aspx/4AA6-7153ENW.pdf [17] Kathy Pretz, Environmentally friendly Information and Communications Technologies, IEEE The Institute, Mar.2016. [18] Mark Harris, The Internet of Trees, IEEE Spectrum, Mar.2014. [19] 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. [20] Prechi Patel, Building a more eco-friendly telecom industry, IEEE The Institute, Mar.2016. [21] Ana Carolina Riekstin,Bruno Bastos Rodrigues,Viviane Tavares Nascimento, Claudia Bianchi Progetti,Tereza Cristina Melo de Brito Carvalho, Catalin Meirosu, Sustainability Information Model for Energy Efficiency Policies, IEEECommunications Magazine, November 2016. [22] 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. [23] *** More Than 30 Billion Devices Will Wirelessly Connect to the Internet of Everything in 2020, ABI Research,London, United Kingdom - 09 May 2013, [24] Victor Greu, Information and communications technologies go greener beyond iot- behind is all the earth-Part1, Romanian Distribution Committee Magazine, Volume 7, Issue 2, Year 2016.

VERTICAL BRAND PORTFOLIO MANAGEMENT: THE PLANNING PROCESS Cosmin Tănase

ABSTRACT The goals that a brand manufacturer sets for the outcome of Vertical Brand Portfolio Management (VBPM) acts as the leading guidelines for the implementation of the strategy. They strongly affect the nature and design of the cooperation. For example, brand portfolio related goals will likely yield more on economical results whereas goals towards the retail partner are expected to emphasise relational outcomes. In principal, the goals of VBPM should be based on higher-level corporate- and in particular on marketing goals and objectives. Due to the fact that such goals depend on firm-specific situations of the brand manufacturer (e.g. size, brand portfolio, customer relationships etc.) not all such situations can be listed. Instead a general procedure will be proposed that includes appropriate criteria to determine the respective goals for VBPM. KEYWORDS: Brands, private labels, planning process, strategic analysis, decisions, marketing objectives, brand architecture

JEL Classification: L20, L81; M31

Brand manufacturers who engage in VBPM are the initiators of this collaboration with the retail partner. Hence their interests are paramount to all decision making. This implies first of all to determine the scope of goals that bear upon the initiator’s’ concerns, i.e. the goals that have an effect on the brand manufacturer’s own (internal) strategic environment. For example, brand manufacturers need to determine product categories and brands that are most suitable for the strategy. Essentially, the chosen brand will be affected by the outcomes of the cooperation.

Integrating a private label (PL) into one’s own brand portfolio and managing it on behalf of a retail partner will also affect the equilibrium of the brand portfolio in question. These are fundamental issues that need to coincide and align with the long term corporate strategy. The scope of goals will also reach towards external entities. For instance, the proposed cooperation will influence the relationship with the participating retailer and will aim at enhancing the performance of the retailer’s product category that was chosen for VBPM. This process is similar to Category Management cooperations, where brand manufacturers as category captains enjoy the freedom of having (partial) control over a retailer’s product category.

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Tasks of the cooperation have to be allocated to the collaborators. By following vertical marketing principles the collaborators need to determine the goals that are associated with each task. For instance, it should generally be in the interest of the brand manufacturer to gain as much control over the PL as possible. On the other hand, compensation for a performed task should be greater or at least equal to the invested effort. It can be said, that brand manufacturers will have an interest to take over important tasks while other tasks can be delegated.

The focus of the operational implementation of VBPM will strongly depend on the goals that are content related. For instance, content related goals can be influenced by the characteristics of the product category, the composition of the brand portfolio, or the firm’s overall marketing objectives.

Moreover, depending on the nature of the chosen product category for VBPM, the decision will impact the selection criteria for the company’s brand bound for the strategy and will guide the selection procedure of retailers. Contractual strategies are content related as well. The longevity of the cooperation directly correlates with the duration of the contractual agreement. The longer the cooperation lasts, the longer the brand manufacturer remains in control of the PL. Maintaining more vertical brand portfolios will also cover broader consumer segments which is generally a goal of brand portfolio strategy

The more specific goals can be described in terms of scope, task intensity, and content, the easier and controlled it will be to take decisions during the process of planning and implementing VBPM. It will also enable the planner to better allow for changes or adaptation needed due to changed internal or external parameters. When the actual goals for the strategy have been formulated and specified the internal and external analysis for the implementation of VBPM can commence.

Four-Step Planning Process for Vertical Brand

Portfolio Management

The planning process will start with an indepth analysis covering the following areas: x the manufacturer’s brand architecture and brand management capabilities x the brand manufacturer’s vertical marketing capabilities x market, category, and product characteristics, and x potential retailers Once the above mentioned areas have been analysed, the planning process will progress towards strategy formulation by implementing the results of the previous steps. Each step will lead to decision rules enabling or limiting the continuation of the planning process. The planning profits from the benefits of sequential planning. Sequential planning implies that if the decisions made at a certain stage do not work, the decisions made at earlier stages are not overturned and remain relevant.

Overall, the strategic analysis and the consequent decisions need to take an organisation’s higher-level mission, objectives, and policies into account. Foremost, marketing planning and objectives should guide the planner. For example, if the marketing plan calls for covering price sensitive segments, then exploring vertically into value PLs could be reasonable.

Once corporate and marketing objectives have been considered, the planner can proceed to determine the specific goals and objectives of the anticipated cooperation. These goals will guide but not limit the internal and external environment analysis. Pre-set goals also have the potential to be changed, dependent on the outcome of the environmental analysis. Once step one, two, and three are accomplished, a ‘strategic fit’ should link the internal and external factors into the formulation of the actual strategy. When implemented, measurement and control mechanisms will monitor the strategy’s performance.

Step 1: Intra-Organisational Audit

The first step of the planning process is dedicated to an audit of the internal environment of the manufacturer. The audit will cover the firm’s resources and organisational, management, and personnel capabilities. The analysis will particularly call for a critical evaluation of the manufacturer’s branding strategy. It has to be questioned as to how the firm’s brand architecture will impact the outset of VBPM. Next to that the brand portfolio strategy demands specification so that the structure of the portfolio and the scope, roles, and interrelationships of the portfolio brands are clear. This step is mainly necessary to enable the integration of (private label)-brands into the portfolio in an informed way. Once a clear intra-organisational picture is given a first step towards brand and product category selection is taken. Step one will offer transparency of the portfolio brands that are generally suif for VBPM. Next to that it will identify brands whose portfolio roles could forbid an involvement in the cooperation. For example, some brands, such as strategic brands, could have an exposed status within the portfolio and might therefore be unsuited for VBPM. The intra-organisational audit will additionally cover the brand manufacturer’s resources and capabilities to carry out VBPM. Therefore, strengths and weaknesses within the organisation, that are important for a successful implementation of VBPM, will be uncovered and analysed. Main areas of assessment will be Vertical Marketing capabilities and brand management expertise. Hence these abilities and capabilities have to be assessed and evaluated.

Step 2: Understanding Market and Product Category Characteristics

The brands of the supplier’s portfolio belong to a product category and a market. Hence a holistic review of every VBPM strategy relevant product category and its market parameters is the task subsequent to the intra-organisational analysis. In this step, the planner will gain insights on items such as product variety, competitor brand market shares, share of voice, PL penetration, PL quality levels, and et cetera. The outcome of this step will enable the planner to take better informed decisions for more complex brand portfolios. Carrying out these kinds of tasks can be compared to the responsibilities of category captains within category management cooperations.

Step 3: Evaluate Retailer

When the strategist has taken the decision as to which brands are suited for strategy implementation and fully understands the market of the respective product categories, the next step of the planning process has the aim to determine the retailer with whom VBPM can be carried out. A broad selection process will bring forth potential collaborators. Main criteria to pre-select retailers will be based on existing (ECR)-relationships, importance, and size of One of the key motivators for a retailer to hand-over a PL into the hands of a manufacturer will likely be the latter’s’ brand management skills and the ability to manage product categories effectively.

Once eligible, the trade partner’s resources and strategy relevant capabilities will then undergo an analysis by the manufacturer. Among others, this analysis will foremost cover the retailer’s PL branding strategy. This step is necessary to assess the collaborators’ branding strategy compatibility (retail brand vs. supplier brand architecture). Due to its cooperative nature, VBPM is based on trust and calls for experienced collaborators. For that reason, the existing relationship with the retailer and his relational capabilities should be assessed. Completing step three 28

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should bring forth retailers that carry the product category in question, whose branding strategy is compatible or can be made compatible with that of the brand manufacturer, and with whom past relationships have been positive and trusted. The selection therefore calls for the before mentioned strategic fit.

Step 4: Develop VBPM Strategy

Finally, when the first three steps of the planning process are completed and each step was decided favourably, a product category with corresponding manufacturer brands can be nominated indefinitely for strategy implementation. The last and fourth step of the planning process requires the manager to decide how best to integrate the retailer’s PL into the brand manufacturer’s brand portfolio. Therefore, requirements that the PL has to meet in response to the manufacturer’s brand architecture will be developed. This fourth and final planning sequence mainly revolves around brand management issues and in particular brand portfolio management tasks. A starting point for the integration will be given by linking it with market segmentation issues. The organisation of the brand portfolio reflects the type of market segmentation chosen by the company and is closely related to VBPM. The strategy formulation will mainly draw its input from aligning the results of step 1 of the planning process, where the manufacturer’s brand architecture was examined, with the subsequent steps of external environmental analysis. The planning results may then be used to constitute the firm’s overall strategic situation by using the analytical tool of S.W.O.T. analysis. Finally, contractual strategy will conclude the initiation phase of VBPM planning. Conclusions

In summary, the goal of the planning process is to enable a well informed and best possible integration of private labels into a manufacturer’s brand portfolio. Following the purpose of VBPM strategy, it has to be decided which product category and brands can be brought forward and which retailers and their PLs meet the specific requirements. The process has the aim to support brand manufacturers in making these decisions. The scope of tasks in planning for VBPM is multi-dimensional. Two independent firms have to cooperate closely which can pose challenges. Therefore, the planning process has to ensure that the interests of the initiator, i.e. the goals and objectives of the brand manufacturer, are kept as priorities throughout the planning period. Naturally, these goals and objectives have to be streamlined with the retailer’s objectives in order to aim for a “win-win” situation among the collaborators. Additionally, vertical marketing strategies have to be brought in unison with brand portfolio issues.

References [1]

Fernie, J. (2004). Relationships in the Supply Chain. In J. Fernie & L. Sparks (Eds.), Logistics and Retail Management: Insights Into Current Practice and Trends From Leading Experts (pp. 26-47). London Sterling.

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Grant, R. M. (2005). Contemporary Strategy Analysis (5th ed.). Oxford: Blackwell Publishing.

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Heller, A. (2006). Consumer-Centric Category Management-How to increase profits by managing categories based on consumer needs. Hoboken: Wiley & Sons.

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Hill, S., & Lederer, C. (2001). The infinite asset: managing brands to build new value. Boston: Harvard Business School Press.

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Keller, K. L. (2008). Strategic Brand Management: Building, Measuring, and Managing Brand Equity (3 ed.). Upper Saddle River, NJ: Prentice-Hall.

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Laforet, S., & Saunders, J. (2007). How Brand Portfolios Have Changed: A Study of Grocery Suppliers Brands from 1994 to 2004. Journal of Marketing Management, 23(1/2), 39- 58.

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Lincoln, K., & Thomassen, L. (2008). Private Label: turning the retail brand into your biggest opportunity. London and Philadelphia: Kogan Page.

COMPETING IN TODAY’S CHALLENGING RETAIL ENVIRONMENT Theodor Valentin Purcărea Abstract We are witnessing that the physical retail industry is changed by digital retail and the pervasiveness of smartphones, being under the pressure of integrating physical and digital, of bringing continuously in-store innovation, of investing in CX and Omni channel efforts. Retailers must give more attention to the entire shopper journey, adequately matching their customers’ expectations across key areas, considering the newest solutions while looking at preferences and shopping habits, learning from Walmart’s ecommerce moves, having a customer-centric approach and innovating accordingly, and the last but not the least gaining and strengthening the necessary organizational commitment. Keywords: In-store and digital experience; Physical and digital integration; Brick and mortar stores’strengths; Store’s 4th dimension; Shopper journey; AI solutions; CX; Omni channel JEL Classification: L81, L86, M31, Q55

Introduction Deloitte Global Powers of Retailing 2017 report highlighted significant retail trends for 2017 (not new, because some time ago there were considered futuristic): changing preferences (including the trend toward owning less and living in the social media-driven economy), changing retail formats (through the blurring of sectors and proliferation of on-demand fulfillment), and the transformative possibilities from living with exponential technologies (which are fundamental to the shopping experience, but not enough), both in-store and beyond. Within this framework it was shown that retailers are rethinking the role of bricks-and-mortar stores, and e-commerce (which is continuing to be a major growth engine for the retail) is transforming the global retail industry. (Deloitte, 2017) On the other hand, at the beginning of August 2017, Chris H. Petersen, PhD, CEO of Integrated Marketing Solutions (and the founder of IMS Retail University), brought arguments in favor of Walmart’s capability of being a viable Amazon alternative (considering both its size, revenue, number of stores and logistic expertise, one hand, and the other hand its signs of adapting to Omni channel consumers rising expectations), and finally underlining the essential role of an adequate customer experience (CX). (Petersen, 2017) And at the end of the same month, an e-mail (from Rachel Muser) entitled “Future Stores Key Speaking Roles Now Open” revealed challenging topics such as: “Bringing digital into brick and mortar…; Achieving a mobile-first retail environment; The future of in-store innovation: AR, AI and IoT.” That is why we chose this time to approach three aspects: in-store experience, and physical and digital integration; facing the divide between real-world and digital behavior; Walmart: the real need of investing in CX and Omni channel efforts. In-store experience, and physical and digital integration In the opinion of the CEO of Euclid Analytics, Brent Franson, (Franson, 2017) it is important to better understand some strengths of the physical stores (brick and mortar stores compared to online stores), according to Euclid Analytics’s research actually two out of three shoppers wanting to come in to a store to see products for themselves, often the critical component of the path to purchase in

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the case of many products being the in-store experience. So-called “retail therapy” is well-known (the feel-good experience of shopping), not forgetting (empirestatefurniture.wordpress.com, 2012) the bond between seller and buyer created by the human contact – in other words the memorable unique in-store shopping experience (including decor, music and smells etc.) – or the expertise that a well-trained in-store associate can offer to the shopper (by answering questions immediately, leading shoppers to the items they want and making more personalized suggestions etc.). (Hambleton, 2017) What also involves retail sales training and customer service, making shoppers’ lives more convenient or meaningful, feeling they are in good hands, making them want to return soon to enjoy an exceptional experience, knowing that every interaction confirms or denies the personal values. Leading with such strengths presupposes to start by offering curated variety, featuring displays which show how seemingly unrelated items work together, offering personal touch and immediate satisfaction, removing frustrations from shoppers’ lives. (retaildoc.com/blog, 2017) And as shown three years ago by a Forbes’s Contributor (who is also a frequent speaker on the subject of marketing and selling to women), to better serve both your customers and the bottom line it is necessary to leverage the traditional retail’s built-in opportunity to stoke inspiration, create sensory experiences and differentiate itself by providing outstanding personal service. (Brennan, 2014) Within this context our attention was attracted by a French article significantly entitled: “Analyse: With its Comptoir, Boulanger enters its 4th dimension: human, responsible and especially of increased proximity.” From the very beginning it was underlined here that with the opening of its store Comptoir (meaning “Counter”) in Wasquehal (a town in the Nord department in northern France), a store specialized in multimedia and electrical appliances. Boulanger (having about 130 stores in France) introduced this new format of proximity considered as an ideal model of perfect synthesis to satisfy the Omni channel approach, as a true link between the unavoidability of an enriched physical experience to which the stores must absolutely turn to reinvent themselves and to recreate attractiveness, and the opportunity of the store “increased” by all the possibilities offered nowadays by the associated trader and logistician digital ecosystem and all on a human scale with a team’s “enthusiasm” specific to Boulanger/Auchan. (le-furet-du-retail.com, 2017) Etienne Hurez, CEO of the brand and Cédric Leprince Ringuet designer and animator of this new format of proximity, spoke about this model, the ambition of the brand being to offer a format (the word “Comptoir” – “Counter” – being for Etienne Hurez a true sign of return to the origins of commerce) of minimum 300 to 400 square meters allowing the brand to return to the city center with an ultra-muscled format based on a perfect mix on/off, by focusing the offline format on the care to exploit in major what the customers expects, mainly the product experience (with a reduced assortment, just the best to try here and now) and a human relationship which reaches here an optimum dimension, personalized with Boulanger team members (all the products displayed in a Boulanger counter are testable and for try-on; the customer is side by side with his enthusiast polyvalent Boulanger teammate who accompanies him throughout his process of purchasing and information and pre-training to his purchase). The Director of “Who’s Mailing What!” (considered the most complete, searchable and fully online library of direct mail and email in the world), Paul Bobnak, attracted the attention in July this summer on how the German supermarket chain Aldi (a global grocery chain of over 10,000 stores; expected to rank third in operated stores, behind Wal-Mart and Kroger, following an $5 billion investment to expand its presence in the U.S.) is combining offline and online and differentiate itself on this most competitive marketplace by focusing on price – with the help of Email marketing (leveraging the store’s exclusive deals as well as its limited-time only pricing) – to drive customer traffic. In the opinion of Bobnak price is a good way to stake your claim and shape customer behavior within the threat of Amazon and other disruptors. (Bobnak, 2017) It is worth mentioning within this framework that: Amazon faced in the same month a Consumer Watchdog complaint – on the fact that Amazon is routinely using inflated and fictitious previous prices to offer misleading discounts, (Stott, 2017) Consumer Watchdog believing that the Whole Foods acquisition should be blocked by Federal Trade Commission (FTC, who keeps an eye out for different types of misleading sales information such as, for example, dynamic surge pricing – Lockner, 2017) unless Amazon changes its pricing strategies (Picchi, 2017) – which was refuted by Amazon; FTC decided in August 2017 not to further pursue an investigation (to determine whether the acquisition substantially lessened competition, or constituted an unfair method of competition) of Amazon.com, Inc.’s acquisition of Whole Foods Market Inc. (ftc.gov, 2017) Total Retail’s research report “The Amazon Effect: How Retailers Are Adapting Their Business to Better Compete With the Industry Leader” revealed that the in-store shopping experience is in the opinion of the traditional brick-and-mortar brands (45% of retailers urveyed) a competitive advantage against Amazon. And this within the context in which 38% of the surveyed retailers don’t have a brickand-mortar location, and only 17% of respondents didn’t believe their stores offered an advantage against Amazon. But the conversation around experiential and Omni channel retail, around physical and

digital integration, as Amazon (and not only) invests further into brick-and-mortar channel, is evolving. (Palmieri, 2017) On the other hand, the same research report revealed how retailers’ online customer experiences are influenced by Amazon: very much, 28%; somewhat, 49%; not at all, 24%. (Knight, 2017) According to the IBM 2017 Customer Experience Index (CEI) – which is generating almost 30,000 individual data points about more than 500 retail brands across the world – only 3% of retailers are deemed to be CX leaders, in other words those being able to match or better customer expectations consistently across seven key areas: digital experience, mobile experience, personalisation, store experience, physical and digital integration, supply chain and social media, as shown in the figure below: (Ward, 2017)

Figure 1: Analysis of CEI scores: Leaders and Laggards, IBM 2017 Customer Experience Index (CEI) Source: Ward, C., Customer experience: If you’re not a leader, you’re a laggard, MyCustomer in association with IBM, 2nd Jun 2017 The above mentioned IBM study also showed, among other aspects, that it is very important for retailers to better understand the real need of a holistic approach, providing more focus on the entire shopper journey, having the organizational collective capacity to tackle their customers’ moments of truth, building better experiences around them, knowing that the last best experience drives the minimum expectations for every future experience of their customers. In July this year Sandeep Raut (Senior Director for digital transformation in Syntel), who is ranked in top 10 global influencers in digital transformation, argued that retailers are the ones benefitting most from augmented reality (AR) applications (compared to other industries such as healthcare, tourism and entertainment), giving some significant examples: the mobile apps & AR mirrors of French cosmetic super chain Sephora (one of the leaders in AR marketing area) allow people to see how clothing, jewelry, and accessories look on them; Customers of Lego’s “Digital Box” (a kiosk in stores) are provided with an Interactive 3D Digital Experience; a giant billboard of fashion retailer Forever 21 features a model walking in front of an image of the crowd below, this model occasionally leaning over, and plucking someone out of the crowd, while sometimes she is dropping them in her bag, happily walking off. (Raut, 2017) And as artificial intelligence (AI) is a key component of the current digital transformation, which is fundamentally changing the retail industry, retail industry has to also consider, for instance, the impact of so-called Intelligent Voice Assistants, being known already that AI solutions provide massive understanding into consumers’ preferences and shopping habits. (Tuttle, 2017) UNIQLO’s AIpowered assistant can ensure deep knowledge about product catalog, retail locations and more. The competition for the winner in voice-enabled retail is continuing (Google Home can understand context for follow-up questions, Amazon Echo leads in range of function etc.). (Tuttle, 2017) Facing the divide between real-world and digital behavior Walmart (founded by legendary Sam Walton in 1962), USA’s largest company (nearly $500 billion business, having some 4,700 physical stores, and serving customers in 28 countries worldwide), is strengthening what they are doing in brick-and-mortar retail, and cleverly combining it with e-commerce and digital capabilities, changing established habits, trying to be faster and more efficient, as a constant educational process (as underlined by Walmart’s CEO Doug McMillon in the March-April

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2017 issue of the prestigious Harvard Business Review, being interviewed in his office at Walmart’s Bentonville headquarters, Arkansas, by Adi Ignatius, the editor in chief of Harvard Business Review). It is not by chance that people like Kevin Systrom, Instagram cofounder and CEO, and Marissa Mayer, Yahoo CEO, are members of the Walmart’s board. (Ignatius, 2017) Last year, at the beginning of October, Facebook’s Director of Product Management, Mary Ku, introduced “Marketplace: Buy and Sell With Your Local Community”, Facebook not facilitating the payment or delivery of items in this “Marketplace”: rolling out (over the next few days following October 3) to everyone over 18 years old in the US, UK, Australia, and New Zealand on the Facebook app for iPhone and Android; which will continue expanding to additional countries etc.; (Ku, 2016) currently already available in the US, Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, and United Kingdom (and the expansion will continue). (facebook.com/marketplace) This year we found (Cheng, 2017) thanks to e-Marketer Retail that Walmart (which first started marketplace selling in 2009, but expanded the platform aggressively years before) increased its assortment to 50 million items from 10 million the past year (announcement made in May concerning Q1 earnings), while Amazon said that it carries hundreds of millions of items). Also interesting is the fact that this expansion of Walmart’s marketplace was paralleled by other ecommerce moves, such as buying Bonobos (a men’s clothing retailer), Moosejaw (an outdoor gear seller), and ModCloth (a women’s clothing seller). Within this framework: ▪ it was quoted, among other experts, the CEO of ChannelAdvisor (whose powerful platform provides means to connect with more customers and increase sales on Amazon, eBay, Walmart, Jet and dozens of other e-commerce marketplaces), David Spitz, who argued that it is a difference between Walmart’s in-store shoppers and Walmart.com shoppers (the last ones tending to be higher-income); (channeladvisor.com) ▪ it was showed that (according to a 2017 Feedvisor survey of 1,600 US Amazon sellers questioned about their selling habits, revenue, concerns, and plans for the future) the percentage of Amazon sellers also selling on Walmart.com (of 9% per total) jumped to 36% among those with $2 million plus in annual revenue; (Ben-David, 2017) ▪ it was also showed that (according to a Euromonitor study) Walmart.com’s marketplace sellers’ retail sales between 2011 and 2016 rose an annual average of 58.6% (outpacing growth rates seen at Amazon, eBay, Sears, Rakuten and Etsy). At the beginning of August 2017, the VP of Marketing at Feedvisor, Ohad Hagai, highlighted that (within the context of a third-party seller marketplace dominated by Amazon: more than three-fifths of the third-party sellers’ sales, about half selling almost exclusively with Amazon) other channels for expansion are considered by sellers (in addition to Amazon, 65% selling on eBay, and less than 10% selling on Walmart), and Walmart expansion could conduct to a new credible challenger. (Hagai, 2017) On the other hand, at the beginning of September 2017, we find out that already integrated with other major marketplaces (such as Amazon, Google and eBay), the cloud e-commerce platform Acenda (which is continuously improving online retail process, making it efficient through advanced data analytics and AI) has integrated with walmart.com, letting this way Walmart’s sellers automate and manage the online selling while customizing content, improving listings and analyzing performance. (Malinowska, 2017) Walmart: the real need of investing in CX and Omni channel efforts On July 11, 2017, Kantar Retail Research Team presented (kantarretailiq.com) the latest rankings of the top 50 US retailers, and of the top 50 global retailers, which confirmed, among other aspects: Amazon’s advance both globally and in the US, ranked as No. 3 in US (after Walmart and Kroger, and followed by Costco) from the seventh in 2016, and as No. 2 globally (after Walmart, and followed by Costco). Walmart is currently ranking as: No. 1 in Fortune 500 Companies 2017 (companies representing two-thirds of the U.S. GDP with $12 trillion in revenues, $890 billion in profits, $19 trillion in market value, and employ 28.2 million people worldwide); (fortune.com) No. 1 in Fortune Global 500 List 2017 (the world’s 500 largest companies which: in 2016 generated $27.7 trillion in revenues and $1.5 trillion in profits, in 2017 employ 67 million people worldwide and are represented by 34 countries); No. 19 in the Gartner Supply Chain Top 25| 2017 (best exemplifying the demand-driven ideal for today’s supply chain, the ranking score being based on a combination of the peer and Gartner opinion, Return on Assets, inventory turns and 3 year revenue growth); (rankingthebrands.com) No. 30 in the FutureBrand Index Top 100| 2016 (more likely to be successful in the future, thanks to a very strong balance between

purpose and perceptions; Amazon is ranked as No. 9); (rankingthebrands.com) No. 137 in the 2017 Temkin Experience Ratings (Amazon is ranked as No. 28, being in the top 10% of companies for the entire Ratings). (experiencematters.blog) It is interesting to note from the viewpoint of this last ranking that in what concerns the retail mobile customer experience, Walmart is better ranked according to a competitive benchmarking study that compared the mobile web user experiences of the top eight Fortune 100 retailers (Best Buy, Costco, The Home Depot, Lowe’s, Macy’s, Target, TJ Maxx and Walmart). (Smith, 2017) This inaugural Retail Mobile Customer Experience Index, which was published by UserTesting in June this year, (info. usertesting.com, 2017) underlined that as the Omni channel purchases are influenced more than ever before by the mobile web interactions, the high performance across all channels for even the most successful retailers becomes a necessity. Brian Smith, VP of Marketing of UserTesting, argued that – because of their legacy bricks and mortar model and of their many customer touchpoints – leading retailers are at a distinct disadvantage (compared to mobile-first companies like Uber and Lyft), and they are extremely challenged to attaining a delightful mobile customer experience (in accordance to the current increasing customer expectations) by having a customer-centric approach and innovating accordingly (going beyond just BOPUS – Buy Online, Pick Up in Store – and considering a mix of chatbots, voice search, Instagram sales channels in right connecting with customers). (Olensky, 2017) The reputed Bruce Temkin, CCXP (Managing Partner of the Temkin Group, and Co-founder and Emeritus Chair of the Customer Experience Professionals Association - CXPA.org), let us know recently that Temkin Group introduced (in the report Activating Executive Commitment to CX) a blueprint that CX leaders can use to gain and strengthen senior executive commitment, the six levers of this blueprint being the following: create vision clarity, share compelling opportunities, amplify emotional empathy, feed intrinsic motivations, enable first steps, and fuel ongoing confidence. (Temkin, 2017) Conclusions: Retailers’ focus on creating a seamless cross channel shopping experience A recent Euclid Commissioned Consumer Survey Report - September 2017 (there were approx. 1,500 U.S. smartphones owners surveyed concerning their online and offline shopping preferences for the upcoming holiday season, changes in their shopping behaviors in brick-and-mortar retail, and it was evaluated how the physical retail industry is changed by digital retail and the prevalence of smartphones) revealed that both capitalizing on the convenience which brick-and-mortar locations can offer, and realizing that for these physical stores it is important that the purchase happens with them (not with Amazon) - no matter if the purchase happens in the physical store or online later - are the determinants of winning the upcoming holiday season. It is useful to have a holistic picture of today’s real need of retailers of: adopting an agnostic perspective of where the purchase actually happens and of focusing on creating a seamless cross channel shopping experience, taking into account the revealed consumers’ percentage saying that they make the purchase after visiting a store to see a product; better guiding their customers’ in-store experience and marketing decisions by knowing what draws these customers to retailers’ physical locations (price, according to 86% of respondents; quality, 85%; in-store experience, 38%); employing brand awareness strategies which span both online and offline channels; delivering the convenience factor with more than just their location; better understanding the consumers’ feeling when shopping during the holidays (getting the best deal, according to 86% of respondents; buying what they had planned, 88%; getting in-and-out quickly, 82%), including identifying the differences across gender and age; harmonizing the convenience of digital with the well-known irreplaceable tactile experience of in-store shopping, catering to regional needs with an adequate inventory, make it simple for commuters and shoppers, and making customers aware of upcoming in-store deals. (Evolution of Retail: 2017 Holiday Physical & Digital Retail Trends) There is no doubt that retailers focusing more on a holistic customer experience, understanding better their customers’ feelings and pro-actively adapting to their Omni channel rising expectations, better guiding their customers’ in-store and digital shopping experience is a must. References Ben-David, T., 2017 Amazon Seller Survey Results: Revealed, April 25, 2017, retrieved from: https://feedvisor.com/resource-center/blog/2017-amazon-seller-survey-revealed Bobnak, P. 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Ignatius, A., “We Need People to Lean into the Future”, Harvard Business Review, March–April 2017 issue, pp.94–100, retrieved on 18.09.2017, from: https://hbr.org/2017/03/we-need-people-to-lean-into-the-future Knight, T., How Amazon Has Affected the Online Customer Experience, July 27, 2017, retrieved on 01.08.2017, from: http://www.mytotalretail.com/article/amazon-affected-online-customer-experience/ Ku, M., Introducing Marketplace: Buy and Sell With Your Local Community, October 3, 2016, retrieved from: https://newsroom.fb.com/news/2016/10/introducing-marketplace-buy-and-sell-with-your-local-community/ Lockner (Bernat), A., Dynamic Pricing: Is “Surge” Pricing Coming to Retail? Published on April 20, 2017, retrieved on 15.09.2017, from: https://www.linkedin.com/pulse/dynamic-pricing-surge-coming-retail-anne-lockner-bernatMalinowska, P., Walmart teams with 3P Service on product listings, Originally published by Path to Purchase Institute, retrieved on 21.09.2017, from: https://consumergoods.com/walmart-teams-3p-service-product-listings?eid=363761797&bid=1865115 Olensky, S., The State Of The Mobile Customer Experience, Jul 27, 2017, retrieved on 21.09.2017, from: https://www.forbes.com/sites/steveolenski/2017/07/27/the-state-of-the-mobile-customer-experience/#2029acaaf926 Palmieri, C., Can Brick-and-Mortar Retailers Take on Amazon? July 25, 2017, retrieved in 01.82.2017, from: http://www.mytotalretail.com/article/can-brick-and-mortar-retailers-take-on-amazon/#ne=c4e4aa5148bbd545a29a454a970be8d3utm_source=totalretail-reportutm_medium=newsletterutm_campaign=2017-07-29&utm_content=can+brick-and-mortar+retailers+take+on+amazon%3F-2 Petersen, C., Is Walmart failing fast enough to blunt Amazon’s onslaught? Aug 7, 2017, retrieved on 21.08.2017, from: http://customerthink.com/is-walmart-failing-fast-enough-to-blunt-amazons-onslaught/ Picchi, A., FTC said to be reviewing Amazon’s “deceptive” pricing, MoneyWatch July 21, 2017, retrieved on 15.09.2017, from: https://www.cbsnews.com/news/ftc-said-to-be-reviewing-amazons-deceptive-pricing/ Raut, S., How Augmented Reality is improving Digital Age!! Jul 11, 2017, retrieved from: http://customerthink.com/how-augmented-reality-is-improving-digital-age/ Smith, B., Best Buy, Home Depot, Target Top Mobile CX Index, August 7, 2017, retrieved on 13.08.2017, from: http://www.mytotalretail.com/article/mobile-cx-study-gives-best-buy-home-depot-and-target-top-marks/#ne=c4e4aa5148bbd545a29a454a970be8d3 utm_source=total-retail-reportutm_medium=newsletterutm_campaign=2017-08-07&utm_content=best+buy%2C+home+depot%2C+target+top+mobile+cx+index-10 Stott, R., Amazon Accused of ‘Surge Pricing,’ Misleading Consumers During Prime Day, July 28, 2017, retrieved on 01.08.2017, from: http://www.targetmarketingmag.com/post/amazon-accused-of-surge-pricing-misleading-consumers-during-prime-day/ Temkin, B., 6 Levers For Executive Commitment to CX (Infographic), September 6, 2017, retrieved on 21,09.2017, from: https://experiencematters.blog/2017/09/06/6-levers-for-executive-commitment-to-cx-infographic/ Tuttle, T., How Artificial Intelligence is Transforming Retail, June 16, 2017, retrieved on, from: http://www.mytotalretail.com/article/how-artificial-intelligence-is-transforming-retail/ Tuttle, T., Is 2017 the Year of Voice Interfaces in Retail? 03/15/2017, retrieved from: https://apparelmag.com/2017-year-voice-interfaces-retail Ward, C., Customer experience: If you’re not a leader, you’re a laggard, MyCustomer in association with IBM, 2nd Jun 2017, retrieved on 09.07.2017, from: https://www.mycustomer.com/experience/engagement/customer-experience-if-youre-not-a-leaderyoure-a-laggard *** Deloitte report, Global Powers of Retailing 2017. The art and science of customers, retrieved on 21.09.2017, from: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/consumer-industrial-products/gx-cip-2017-global-powers-of-retailing.pdf *** Physical shops versus online stores: advantages and disadvantages, June 1, 2012, retrieved 14.09.2017, from: https://empirestatefurniture.wordpress.com/2012/06/01/empire-state-furniture/ *** How to Find Strength In Being A Brick and Mortar Retail Store, January 01, 2017, retrieved on 14.09.2017, from: https://www.retaildoc.com/blog/how-to-find-strength-in-being-a-brick-and-mortar-retail-sales-store *** Analyse: Avec son Comptoir, Boulanger rentre dans sa 4ème dimension: humain, responsable et surtout de proximité augmentée, Publié le 17 avril 2017 par le-furet-du-retail, brick & mortar strategy, retail design et merchandising, retrieved on 14.09.2017, from: http://www.le-furet-du-retail.com/2017/04/avec-son-comptoir-boulanger-rentre-dans-sa-4eme-dimension-humain-responsable-et-proximite.html *** Statement of Federal Trade Commission’s Acting Director of the Bureau of Competition on the Agency’s Review of Amazon.com, Inc.’s Acquisition of Whole Foods Market Inc., Press release August 23, 2017, retrieved on 15.09.2017, from: https://www. ftc.gov/news-events/press-releases/2017/08/statement-federal-trade-commissions-acting-director-bureau *** https://www.facebook.com/marketplace/learn-more *** https://bonobos.com/ *** https://www.moosejaw.com/ *** https://www.modcloth.com/ *** https://www.channeladvisor.com/solutions/marketplaces/ *** Kantar Retail′s 2017 Top 50 US and Global Retailers, Kantar Retail Research Team, 11 Jul 2017, retrieved on 21.09.2017, from: https://www.kantarretailiq.com/Conversation/ConversationDetails.aspx?id=1500609 *** Fortune 500 Companies 2017: Who Made the List, retrieved on 21.09.2017, from: http://fortune.com/fortune500/ *** Fortune Global 500 List 2017: See Who Made It, retrieved on 21.09.2017, from: http://fortune.com/global500/ *** The Gartner Supply Chain Top 25| 2017, retrieved on 21.09.2017, from: https://www.rankingthebrands.com/The-Brand-Rankings.aspx?rankingID=94&nav=category *** The FutureBrand Index Top 100| 2016, retrieved on 21.09.2017, from: https://www.rankingthebrands.com/The-Brand-Rankings.aspx?rankingID=366&nav=category *** Ace Hardware, BJ’s Wholesale Club, and QVC Earn Top Customer Experience Ratings for Retailers, March 27, 2017, retrieved on 21.09.2017, from: https://experiencematters.blog/tag/wal-mart/ *** Retail Mobile Customer Experience Index: June 2017, UserTesting, retrieved from: http://info.usertesting.com/website_website_mobile-customer-experience-index-retail_wp_global_registration_page.html?&utm_medium=press-release&utm_source=prwire&utm_campaign=press-release_mobile-customer-experience-index-retail_wp_global&utm_content=wp *** Evolution of Retail: 2017 Holiday Physical & Digital Retail Trends, A Euclid Commissioned Consumer Survey Report - September 2017, retrieved on 22.09.2017, from: file:///C:/Users/Internet/Downloads/2017_Holiday_Physical_and_Digital_Trends.pdf

LÉON F. WEGNEZ (BY COURTESY OF) – PROMOTION, A DISCIPLINE FULL OF PROMISES, PUBLISHED IN THE PRESTIGIOUS “DISTRIBUTION D’AUJOURD’HUI”, 58ÈME ANNÉE, AVRIL 2017, BRUSSELS Léon F. Wegnez 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 six years were: Philip Alexander Nobel, 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”.

Romanian Distributtion Committee Magazine / September 2017 / www.distribution-magazine.eu

SHOPPING CENTERS IN ISTANBUL, MARCO POLO, ASIA PACIFIC RANKING, DIVISION OR UNITY, REVITALIZATION CONCEPTS, APRCE 2017, INNOVATION FORUM ASTANA, CORP VIENNA, TRADE INNOVATION Bernd Hallier

Emilian M. Dobrescu, Bernd Hallier and Theodor Purcarea at the Romanian Academy

Prof. Dr. Bernd Hallier, President of the European Retail Academy (ERA), 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 2017, and allowed us to present them. It is also worth remembering 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; the RomanianAmerican University has awarded Prof. Dr. Bernd Hallier a “Diploma of Special Academic Merit”; the “Carol Davila” University of Medicine and Pharmacy , Bucharest, has awarded Prof. Dr. Bernd Hallier a “Diploma of Excellence”.

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ERA let us know on July 10, 2017 that there is no other city in the world which over thousands of years is an example for change/urban revitalization like Byzanz (Greek Empire),

Konstantinopel (Roman Empire), Stanbul (Osman Empire) and today called Istanbul - being the bridge between Orient and Okzident as like as it was already in the times of the historical SILK ROAD. According to Dr. Cebrayil Valiyev, the biggest Shopping Centers in Istanbul are: the Forum Istanbul (176.400/2009), Mall of Istanbul (135.000/2011), Istanbul Javahir (110.000/2005), Torium (90.000/2010), MetroCity (51.000/2003), Olivium (35.000/2000), Akmerkez (34.000/1993) and Airport Outlet (32.000/2008). For Galleria (77.000/1988) and Atirus (56.000/2005), data reflecting the total area of the facility.

Marco Polo On July 20, 2017, ERA informed us that the most famous name in Europe connected with the Silk Road is the Venetian merchant Marco Polo (1254 - 1324). But Dr. Francis Wood from the British Museum in London does question if Marco Polo had ever been in China; she believes that he traveled only up to Constantinople and everything else is fiction! For sure his reports became only well-known in 1558 - 234 years after his death. In his notes dictated to Rusticello from Pisa with whom he shared for 10 months a prison cell in Genoa he neither mentioned the Great Wall

or the Chinese pottery nor the crippled feet of the Chinese women at that time. Therefore the thesis is that he got his China information from people from Far East for whom the Wall, the pottery, the feet were so common that it was not worth to be mentioned. Scientific fact is too that over the centuries the Marco Polo story increased by each new edition. More about the Silk Road at AEUC (Link).

Asia Pacific Ranking ERA let us know on July 28, 2017 that NYCU Media together with Euromonitor International and KPMG just published its newest ranking of the TOP 500 companies of the Asia Pacific region. At Oct. 24th 2017 the Best-of-the-Best will be honored in an Award Ceremony & Gala Dinner in Kuala Lumpur/ Malaysia . Among the international jury for more than a decade is Prof.Dr.Bernd Hallier. Measured by sales (US $ mm) the leading company is AEON/Daiei (Japan) with 29.870 mm and 688 outlets in front of 7-Eleven (Japan) with 27.206 mm (19.572), Thomas Dux/Woolworth (Australia) 25.022 mn (981), Westfarmers/Coles (Australia) 24.714 mm (783), Family Mart (Japan) 17.287 mm (18.606), China Resources Holding(China) 15.530 mm (906), Sun Art Retail (China) 14.631 mm (432), Gome Electrical (China) 14.101 mm

(1.195), Suning Commerce (China) 13.907 mm (1.500) and Lawson (Japan) 13.780 mm (12.837).

Division or Unity On August 10, 2017, ERA informed us that the peaceful summer picture of Luebeck-Bay at the Baltic Sea painted by M.-C. Hallier - should remind us of the values of Peace: in 1945 this spot was the grave for some hundred refugees being torpedoed by a submarine while trying to escape World War II; untill 1989 it was part of the military border between East and West Germany! Now the human beings of East and West can jointly use its gorgeous beaches and can travel without any formalities across the borders to the neighboring beaches of Poland or the Baltic States! The city of Luebeck/Germany was also a key-town for the HANSEpartnership: uniting the trade of Scandinavia, Germany and the Baltic States in the middle ages. Its “brickstone

Gothic of the churches and houses” built by the HANSE-traders can still be seen all around the coast of the Baltic Sea. Revitalization Concepts ERA let us know on August 20, 2017 that Vienna was already becoming Capital in 1804 - at that time of the Royal Austrian Empire. In 1814/15 the Vienna Congress decided about the new political structure of Europe after the Napoleon War. Today its City Center as well as the Castle Schoenbrunn belong to the UNESCO World Heritage. In September 2017 the 22nd International Conference of REAL CORP (List of presentations) about the present urban revitalization case-studies worldwide will be organized by the Technical University of Vienna, www.corp.at, www.isocarp.org - and supported like at the last Conferences in Hamburg and Ghent by the European Retail Academy. Prof.Dr.B.Hallier will speak about the Silk Road Revitalization.

APRCE 2017 On August 30, 2017 ERA informed us that the Asian Pacific Retailers Association is organizing biannually since 1983 a three-days Congress and Exhibition which is rotating in the area: having started in Tokyo/ Japan, being in 1985 in Seoul/South Korea and in 1987 in Hong Kong. In 2015 the Exhibition was in Manila/Philippines and it will be held in 2017 (Oct. 25th-27th) in Kuala Lumpur/Malaysia. The APRCEEvent is also ranked very high politically. In 1983 it was graced by the Japanese Prime Minister Nakasone - and in 2015 attended by the Philippine President H.E. Benigno S. Aquino III (Link APRCE Manila). In Manila Prof. Dr. B. Hallier was very happy to exchange words again with the Honorary President of AEON, Takuya Okada-san, who is also co-founder of the Asian Pacific Retailers Association (see also AEON History in theÂ LINK).Â

Innovation Forum Astana ERA let us know on September 15, 2017 that within the EXPO Astana Concept the platform G-Global and 44

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partners organized the first Innovation Forum for the Silk Road Area at the Nazarbayev University next to the EXPO exhibition area. Among others participants were M. Karimsakov and N. Achilov from G-Global, Prof. H. Barabaner and Prof. Dr. B. Hallier from the Eurasian Club of Scientists, and the Korean Nobel Laureate Prof. Dr. Rae Kwon Chung. Prof. Dr. Chung and Prof. Dr. Hallier agreed in their speeches that a Green Economy can be profitable already in the medium-term for companies and countries and that a Global House of Harmony has to focus Ecology first, being based on economic and ethical balances. According to all speakers the Silk Road Revitalization could contribute to those values. The European Retail Academy started in 2017 its new AEUC platform (european-retail-academy.org/AEUC) to

promote the historical understanding of the area and to give new retail/wholesale initiatives an international platform.

CORP Vienna On September 20, 2017 ERA informed us that having in 2015 its annual conference in Ghent/Belgium and in 2016 in Hamburg/Germany Real CORP - the international organization of city planners - celebrated its three-day-event 2017 at the Technical University (TU) of Vienna/Austria under the title â&#x20AC;&#x153;Panta Rhei: a world in constant motionâ&#x20AC;?. The President of the European Retail Academy , Prof. Dr. Bernd Hallier (at the photo together with CORP-organizer Manfred Schrenk, the Chief Data Officer of the city of Vienna, Gerhard Hartmann, and the innovation-experts Gerti Neubauer and Stefan Fazekas, both from the city of Graz) promotes CORP and was lecturing in Vienna about the Revitalization of the historic Silk Road and taking part in an innovation panel.

Trade Innovation ERA also let us know recently that Prof.Dr.Hallier was interviewed by the public TV-station ZDF about the transformation of Germany after World War II from Mum and Papa Stores towards modern selfservice (retail being an indicator of the wealth of a nation and its innovation power). Hallier has researched innovation-cycles of trade which for him appeared roughly all 25 years in Western Europe over a period of nearly 200 years. Hallier sees the founding of consumer-cooperatives at 1850 followed in 1875 by department stores , in 1900 by retail-cooperatives like EDEKA , by mail-orders like Schickedanz/Quelle in 1925, by first small self-service supermarkets in 1950, by hypermarkets and shopping centers in 1975, by B2B and B2C in the year 2000 and approaching Mobile Shopping until 2025.Â

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