Romanian Distribution Committee Magazine, Volume 10, Issue 3, Year 2019

RET AI L E RS ’ S T RUGGL I NGT OADAPT T OT HECHANGI NGCONS UME R

US I NGT HEI NF ORMAT I ONANDCOMMUNI CAT I ONST E CHNOL OGY DAT ADE L UGEF ROMAS E MANT I CPE RS PE CT I VEOFADYNAMI C CHAL L E NGE : WHATT OL E ARNANDWHATT OI GNORE ?

VOL UME10 I S S UE3 2019

Editorial: Retailers’ Imperative of Ensuring Millennials Engaging and Relevant Brands’ Customer Journeys

This summer we continued to find time to read interesting opinions and articles, such as: ▪ the introduction to the Drucker Forum 2019, entitled “The Power of Ecosystems - Managing in a Networked World”, by Richard Straub, remarking also the quote of Charles Handy, Social Philosopher (“What we really need is a business reformation”) on the occasion of the Closing Address at the 9th Global Peter Drucker Forum 2017; ▪ an article of the McKinsey’s representatives entitled “Getting personal about change”, and highlighting from the very beginning “The need to shift mind-sets is the biggest block to successful transformations. The key lies in making the shift both individual and institutional - at the same time”; (Keller and Schaninger, 2019) ▪ another article entitled “Consumer Feelings: The Next Frontier in Market Research”, by Catherine Rickwood. (Rickwood, 2019) And our thoughts were going towards the marketers’ conversations with different Generations.

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In March this year CB Insights explored key consumer areas that U.S. millennials have been accused of “killing”, showing why the millennial generation (millennials, Gen Y) is so different, by looking for brands which prioritize convenience, personalization, and sustainability, as a result of these brands’ struggling to adapt to the changes in consumer preferences, taking advantage of the opportunity for creative transformation offered by the shifting markets. This report of CB Insights underlined, for instance, that millennials prefer to do their shopping online, but they (50% of them) also prefer going to physical store locations. And in contrast to the traditional departments stores (which are expensive and have limited selection), the well-known mass merchants (Amazon, Walmart, Target etc.) are benefiting from a small increase in millennial spending because of their price sensitivity and convenience. What means that to survive, the traditional departments stores need to better listen to millennials, adapting accordingly to the identified expectations, keeping pace with the changes in the consumer behavior. (CB Insights, 2019) Recently, another report of CB Insights explored some of the industries (Activities & hobbies: Camping, Fitness, Travel; Consumer goods: Fast casual dining, Coffee, Frozen foods, Seltzer, Houseplants, Skincare; Transportation: Automotive, Micromobility; Finance: Personal finance), which could massively benefit from the rise of this millennial generation, because of the companies’ reorganization and reprioritization by embracing both millennials’ changing preferences, and new technology allowing an unprecedented discoverability and customer connections. There were revealed among other aspects that millennials prefer more authentic travel experiences (being attracted by music festivals, cultural and culinary events, multi-day dance parties etc.), being price-sensitive and eager for healthy and fresh food options etc., cold brew and nitrogen-infused beverages etc., seltzers and flavored sparkling waters, eating on the go etc., looking for mobile ordering and in-store pickup, seeking out greenery to enhance their living spaces, and compared to any other generation buying far more skincare products, while as motorists preferring smaller, more efficient, and more affordable sedans, without neglecting millennial consumers’ preference for micromobility services and for using web and mobile personal finance apps (they representing the vast majority of users, relying on mobile banking and standalone budgeting apps). (CB Insights, 2019) And very recently, CB Insights reported on how millennials are disrupting personal finance (AI-powered virtual spending services being, for instance, a millennial-driven trend in the budgeting and saving space), proving to be a fiscally conscientious generation, using both online and mobile channels for banking, being more open to banking alternatives (offerings from Google, Amazon, Apple etc.) and to alternative investment vehicles (such as cryptocurrency) or to point-of-sale lending alternatives. (CB Insights, 2019) This made us recall: ● an article published by the Romanian-American University’s representatives and one of their foreign academic partners, in 2017, in “Amfiteatru Economic”, (Haydam, Purcarea, Edu and Negricea, 2017) this article’s authors highlighting from the very beginning some millennials’ behavioral features prompted by the extant literature (such as: better educated than other

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generational groups, confident, very communicative, relying heavily on technology to interact and for entertainment, seeking excitement, entertainment and new experiences, choosing brands based on identity and comfort despite the fact that loyalty is not always certain, selecting products frequently on the basis of their emotions and shopping venues based on their rational considerations etc.), and expressing the opinion that these behavioral features should be assessed within the context of this generation’s heterogeneity (knowing that individuals’ preferences and behavior are influenced by their attitudes, generating market segments inside generational groups, as it was demonstrated in 2010 by the Australian P. Glover); ● another article published by The Next Brick, in 2018, and entitled “Millennials have the most buying power of any generation”, and in which retailers are seen as curators of experience for millennials (who love a strong sense of community).

Going back in time, it is also worth mentioning an interesting approach of B.C.G.’s representatives with regard to “How Millennials Are Changing the Face of Marketing Forever”, in which there were underlined, among other aspects, that compared to other generations millennials: have their own spending habits, brand preferences, values, personalities, and general outlook on life; engage with brands far more extensively, personally, and emotionally, and by using Internet, social media, and mobile devices, and also by influencing the purchases of others through their feedback expressed both offline and online; expect a mutual relationship with companies and their brands (this being called by BCG the reciprocity principle, described here as having five key elements: reach, relevance, reputation, relation, and referral; marketers needing to align their strategies, initiatives, and investments around this reciprocity principle when targeting GenY); become vocal critics spreading (viral) the negative word when confronted with inadequate CX; are leading indicators of both large-scale changes in future consumer behavior ( influencing other generations), and of the new so-called “status currency”.

(Barton, Koslow and Beauchamp, 2014) Coming back to this year, we also noted in March the opinion expressed by the Strategy lead for Infor’s Retail and Fashion business, who see millennials as instant satisfaction seekers (considering that essential in keeping them coming back as customers is to ensure the prompt delivery time), and pledge for using tech to tailor CX, giving them personalized treatment.

(Rowe, 2019) But speaking about personalization let us quote John Ross, President & CEO of The Independent Grocers Alliance (IGA): “Ask any millennial and they will tell you, “I’m not a consumer. I’m a person”. What this means is that FMCG brands’ customer journeys have to be engaging and, above all else, relevant”. Within the same generous framework offered by The Consumers Good Forum (and we are eager to meet again, in October 2019, our Friend Ruediger Hagedorn, Director, End-to-End Value Chain, CGF, on the occasion of the Academic & Business Partnership 2019 SCM 4 ECR Conference, Targoviste, Romania, with the theme “Technology and Innovation in SCM for Creating New Value for Consumers”), IGA President & CEO did not forget to remember us that: “The smartphone has become the primary portal through which millennials engage with the world around them… they have access to far more

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information than the previous generation… The result? Purchasing behavior becomes fragmented and there is a disintegration of traditional consumption patterns, which marketers and salespeople have relied on for decades”. (Ross, 2018) But we are in a world in movement… What comes next for marketers? Because as Alvin Toffler said long before… the future already has begun… Three months ago we find out, for example: a new study by Snapchat and JWT Intelligence entitled “Into Z Future”, generation Z (ages 13 to 22 years old) being considered the most digitally creative generation to date, the hyper-connected…; (JWT Intelligence, 2019) an article entitled “Forget millennials and Gen Z, the rise of ‘Generation Alpha’ is on the horizon” made reference to Generation Alpha as the first generation born in a truly digital world (a report of Beano Studios of over 2,000 Generation Alpha kids and their parents around the UK), this younger Generation Alpha being seen by the CEO at Beano Studios as: “the generation that will seek to bend the digital world to their needs and ambitions and not be defined or consumed by it”. (Parsons, 2019) It is well-known that the phrase “Generation Alpha” was coined by the Australian social researcher Mark McCrindle, and that in his opinion “Generation Alpha will be the most formally educated generation ever, the most technology-supplied generation ever, and globally the wealthiest generation ever”.

(Pasquarelli and Schultz, 2019) Allow us to finally recall a 2016 article written by the reputed Don Peppers and entitled “Use technology to demonstrate empathy to customers”. He concluded as follows: “You shouldn’t need a reason to have a conversation with a customer”. (Peppers, 2016) We agree with him.

Theodor Valentin Purcărea Editor-in-Chief

References Barton, C., Koslow, L. and Beauchamp, C. (2014). How Millennials Are Changing the Face of Marketing Forever, BCG, January 15. Retrieved from https://www.bcg.com/publications/2014/marketing-center-consumer-customerinsight-how-millennials-changing-marketing-forever.aspx Haydam, N., Purcarea, T., Edu, T. and Negricea, I.C. (2017). Explaining Satisfaction at a Foreign Tourism Destination – an Intra-Generational Approach. Evidence within Generation Y from South Africa and Romania, Amfiteatru Economic, Volume: 19, No. 45/2017, pp. 528 – 542 Keller, S. and Schaninger, B. (2019). Getting personal about change, McKinsey Quarterly, August. Retrieved from https://www.mckinsey.com/business-functions/organization/our-insights/getting-personal-about-change?

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Rickwood, C. (2019). Consumer Feelings: The Next Frontier in Market Research, MarketingProfs, July 31. Retrieved from https://www.marketingprofs.com/articles/2019/41593/consumer-feelings-the-next-frontier-in-marketresearch?

Parsons, J. (2019). Forget millennials and Gen Z, the rise of ‘Generation Alpha’ is on the horizon, Metro.co.uk, 20 Jun. Retrieved from https://metro.co.uk/2019/06/20/forget-millennials-gen-z-rise-generation-alpha-horizon Pasquarelli, A. and Schultz, E.J. (2019). Move over Gen Z, Generation Alpha is the one to watch, AdAge. January 22.

Retrieved from https://adage.com/article/cmo-strategy/move-gen-z-generation-alpha-watch/ Peppers, D. (2016). Use Technology to Demonstrate Empathy to Customers, 1to1 Media, Sep 23. Retrieved from http://www.1to1media.com/technology/use-technology-demonstrate-empathy-customers Purcarea, T. (2019). Virgil Popa at the SpringBoard Workshop, The Consumer Goods Forum, End-to-End Value Chain, Barcelona, 25th-26th June 2019, Transportation, Romanian Distribution Committee, September 7. Retrieved from http://www.crd-aida.ro/2019/09/virgil-popa-at-the-springboard-workshop-the-consumer-goods-forum-endto-end-value-chain-barcelona-25th-26th-june-2019-transportation/ Ross, J. (2018). How FMCG Brands Can Keep Up with Millennials, The Consumers Good Forum, September 5 .

Retrieved from https://www.theconsumergoodsforum.com/how-fmcg-brands-can-keep-up-with-millennials/ Rowe, E. (2019). Millennials: Roadblocks or Enablers of Success? CustomerThink, March 8. Retrieved from http://customerthink.com/millennials-roadblocks-or-enablers-of-success/? *** https://www.druckerforum.org/home/ *** 12 Industries Experts Say Millennials Are Killing — And Why They’re Wrong, CB Insights, March 26, 2019.

Retrieved from https://www.cbinsights.com/research/millennials-killing-industries/ *** 12 Industries That Will Thrive Thanks To Millennials, CB Insights, August 2019. Retrieved from https://www.cbinsights.com/research/report/millennials-industries-thriving/? *** From Investing To Budgeting, How Millennials Are Disrupting Personal Finance, CB Insights, September 10, 2019. Retrieved from https://www.cbinsights.com/research/millennials-personal-finance/ *** Millennials have the most buying power of any generation, The Next Brick, May 09, 2018. Retrieved from https://www.thenextbrick.com/retail-consumer-trends/millennials-buying-power *** INTO Z FUTURE. Meet generation Z, the next generation of Super Creatives, June 2019. Retrieved from https://www.jwtintelligence.com/trend-reports/into-z-future-understanding-generation-z/?

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The Magazine is the result of a true partnership, by bringing scientists and practitioners together proving the passionate pursuit of knowledge for wisdom, the real passion for acquiring and sharing this knowledge inviting the readers to maturing interdisciplinary dialogue and building a transparent culture network.

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Using the Information and Communications Technology Data Deluge from a Semantic Perspective of a Dynamic Challenge: What to Learn and What to Ignore?

-Part 1-

Prof.Eng.Ph.D. Victor GREU Abstract The paper approaches the Data Deluge which is generated, at World scale, by the flows of data created by the complex proliferation and exponential development of Information and Communications Technologies (ICT), as main driving factor of the progress of the Information society (IS) toward Knowledge Based Society (KBS), but the paper analysis is focused on a systemic approach in order to observe the main premises and features of such complex processes, aiming the optimal efficiency of data generation and use, for humankind and Earth survival.

The main emergent (hype) technologies for ICT exponential development in 2019 are considered, as contributing to Data Deluge and including Artificial Intelligence (AI), Internet of Things (IoT), Cloud, Big Data, 3D Printing, Robotic Process Automation, Hardware Robotics, Blockchain, Augmented/Virtual Reality.

ICT, but mainly all the above mentioned emergent (hype) technologies, contribute, by their complex processes that involve people, machines and devices in a planetary digital disruption, to the huge phenomenon called Data Deluge, but behind is still, mostly but not exclusively, the Internet (3.0 industry revolution) as a backbone.

For the paper entry in Data Deluge issue the CERN amazing “temple” of science and technology is chosen, but social media have also produced crucial changes in the way we live, including business models, although entertainment and other applications that use broadband mobile communications provided are also impressive in generating Data Deluge.

All these Data Deluge sources are illustrated with global figures that seem to be more impressive every year (over half a Yottabyte are generated), as the overwhelming park of connected devices and people are exponentially increasing, approximately following the Moore Law consequences as an invitation to Data Deluge.

Although the cost of computing and communication is falling to Zero, this reality is not necessary a guarantee that the benefit in information/knowledge is automatically high, but on the contrary, it is necessary to have higher expertise (means/methods) to extract information and eventually knowledge from the Data Deluge.

As prominent and relevant source of Data Deluge, CERN project is presented in detail (it includes 22 member states and a global community of 15,000 researchers). The CERN’s mission is pointing international research, technology, education and collaboration. CERN will advance the frontiers of knowledge like the fundamental structure of the Universe, the generation of Universe by Big Bang, the kind of matter within the first moments of the Universe’s existence, understanding the very first moments of Universe after the Big Bang or Dark Matter looking for Antimatter. In addition, CERN will develop new technologies for particle accelerators and detectors, but also for emergent fields like advanced ICT (including Quantum Computing), Web (the World Wide Web was invented at CERN in 1989 by British scientist Tim Berners-Lee) or the

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(computing) GRID. The medical diagnosis and therapy will also considerably benefit from the unprecedented advances achieved by the CERN. The CERN LHC is a machine of records, including: hottest spots in the galaxy; colder temperatures than outer space; the most sophisticated detectors ever built; the detectors are like gigantic digital cameras built in cathedral-sized caverns.

Concluding that CERN is just a tip of the iceberg that Data Deluge is or could become, other relevant examples could be given, but none could reach the CERN unique records (although, in the same class of Data Deluge “giants”, there are Facebook, Google, Amazon, Netflix etc.). A paper goal is to try to analyse what and how, under these storm waves of Data Deluge, is going to melt these icebergs in order to extract and use the best of information/knowledge humankind and Earth need today and especially tomorrow.

In the second section of the paper, a disproportional comparison of the antiquity Pyramids with CERN was deliberately chosen just to emphasise the huge role of using the technology advances (mainly enabled by ICT) for generating Data Deluge and then extracting information and eventually knowledge, even from sources (like the antiquity Pyramids) which almost have “run dry” before this new technological support. It is mentioned the importance of the humankind evolution phase we are in, for the relevance of any analysis results, as in every phase the technology advances push the data, information and eventually knowledge generation to a higher level (quite incredible before), which explains also the miracle in the case of Pyramids.

The analysis also considered the deep and complex processes where data, information and eventually knowledge are linked with a multitude of goals the people could have when they expect the desired data and look, from a semantic perspective, for using them to fulfil these wishes. The difficulty and complexity of such analyses and optimization approaches are badly increased by the fact that all the mentioned processes premises are fast and nonlinearly changing, mainly because of ICT/IS/KBS exponential pace, this way generating everywhere a dynamic challenge of the mentioned semantic perspective, which in a simple expression could be: What to learn and what to ignore?

The paper also approached The Difference Between Data and Knowledge, observing that for leveraging knowledge refining it is necessary to timely think (have a thought) and create appropriate ICT tools because creating large amounts of data does not automatically generate lots of knowledge. Approaching both tools and thoughts related to the processes involved in knowledge creation in this epoque of Data Deluge, we pointed the diversity, complexity and difficulty of semantic context cases where we have to select the optimal data (amount) leading to the desired information and eventually the knowledge benefic to wisdom. As tools prominent example, the heart of CERN computing infrastructure, was given, as the Worldwide LHC Computing Grid (WLCG) includes: 170 computing centres in 42 countries; 1M CPU cores; 1EB of storage; 340 Gb/s transatlantic; 3PB moved per day.

The analysis of complex processes where data stream to information and eventually knowledge pointed the two main factors that could influence this (long) road, considering that environmental factors could be located among the Data Deluge sources (where the Data Deluge comes from) discussed mainly in the first section, while the cultural factors are referring to the intimate, diverse, complex and dynamic processes where data are analysed, interpreted or selected by humans or machines, usually (but not exclusively) by semantic methods which naturally benefit from ICT prominent advances like AI/ML/CAIS. The final conclusion is that our analysis needs to be further continued, in order to get deeper (usually, but not always, scientific) insights when looking to Data Deluge, which, in our days comes faster and everywhere.

Keywords: Data Deluge, CERN Large Hadron Collider, semantic methods, Worldwide LHC Computing Grid (WLCG), World Wide Web, Particle Physics, Digital Disruption, Internet of Things, information society, knowledge based society, broadband mobile communications JEL Classification: L63; L86; M15; O31; O33

“Where is the wisdom we have lost in knowledge?

Where is the knowledge we have lost in information?” ― T.S. Eliot, The Rock 1. Where the Data Deluge comes from?

Often people say that in autumn they count the harvest results, thinking to the mature evolution the summer has generally enabled, but I guess that a similar thought, as a

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metaphoric expression, could be experienced when reading about CERN (Conseil Européen pour la Recherche Nucléaire, a provisional body founded in 1952 with the mandate of establishing a world-class fundamental physics research organization in Europe) Open Days 2019 [2]: “On 14 and 15 September 2019, CERN will open its doors to the public for two special days at the heart of one of the world’s largest particle-physics laboratories…

With an estimated 30 000 to 40 000 visitors per day, we expect traffic disruption in the neighbouring area …To the 75,000 visitors of the CERN Open Days: thank you for exploring the future with us and sharing our passion for science! … The CERN Open Days have become a regular feature of the period that we call the “long shutdown” during which our accelerators stop for around two years, to benefit from upgrades and renovation work. We are now in Long Shutdown 2… Remember that CERN is open all year …”

The comparison could be more relevant if we recall that for a football match, an audience of 40000 people is quite remarkable and further comments are not necessary, considering the impressing “harvest” that allows a stop of around two years, but one could still ask: Which is the point?

Perhaps from exploring the future with us and sharing our passion for science to a football much entertainment seems to be a long way, but our paper point is to analyse how data, information and knowledge are perceived in the digital (including Data Deluge) era we are living in, generally by all people on Earth.

Obviously, from here, the Information and Communications Technology (ICT) must be recalled, as the main driving engine of the Information Society (IS) toward Knowledge Based Society (KBS), because it is well known that its overwhelming influence on all humankind activity and beyond, due to the fact that ICT products and services succeeded to bring, everyday and everywhere, more and more benefits for humankind life and IS/KBS progress.

The main emergent (hype) technologies for ICT exponential development in 2019 are also largely recognized [5][6][3] as including Artificial Intelligence (AI), Internet of Things (IoT), Cloud, Big Data, 3D Printing, Robotic Process Automation, Hardware Robotics, Blockchain, Augmented/Virtual Reality etc.

Generally ICT, but mainly all the above mentioned emergent (hype) technologies, contribute, by their complex processes that involve people, machines and devices in a planetary digital disruption (DD), to the huge phenomenon called Data Deluge, but it is worth to notice that behind is still, mostly but not exclusively, the Internet (3.0 industry revolution) as a backbone.

The Data Deluge is generated by the flows of data created by the complex proliferation and exponential development of ICT at Earth scale.

As a matter of fact, the Data Deluge has a huge diversity of generation sources, but our analysis will focus on a systemic approach in order to observe the main premises and features of such complex processes, aiming the optimal efficiency of data generation and use, for humankind and … Earth survival [7][10].

The scientific and economical world contain, naturally, the most of processes to generate data deluge [4]: “What Causes Data Deluge?

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Global scientific output doubles every nine years (Noorden, 2014) and this combines with the recent estimate from IBM that over 90% of the world’s data have been produced in the last four years (IBM, 2013). The Big Data explosion is well-documented and truly a part of modern scientific research.”

Still, the wide picture of Data Deluge is far from being only about the scientific and economical World, as we already have only suggested by CERN – football comparison.

It is well known that social media have produced crucial changes in the way we live, including business models, but entertainment and other applications that use broadband mobile communications provided are also impressive in generating Data Deluge [8]: “According to a report generated by International data corporation (IDC), a research company informs that in between 2010 and 2020, the amount of data in this digital universe will grow by 35 trillion gigabytes. In the year of 2000s, the emergence of social media, cloud computing and other powerful platforms are the main cause of exponential growth in big data. As of December 2015, Facebook has an average of 1.04 billion daily active users, 934 million mobile daily active users, available in 70 languages, 125 billion friend connections, 205 billion photos uploaded every day 30 billion pieces of content, 2.7 billion likes, and comments are being posted and 130 average number of friends per Facebook user (Facebook, 2015).”

Similarly, after 1 year, the figures seem to be more impressive, as the overwhelming park of connected devices and people are exponentially increasing, following approximately the Moore Law consequences as and invitation to … Data Deluge [9]: “The internet of things … 50 billion connected devices by 2020 Digital Disruption And what of the internet of things? It is estimated the number of “things connected to the internet” could be over 50 billion by 2020. This may well be true. It could even by higher.

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.

Beyond the exponential figures we have to observe the huge implications of this stormy evolution, mainly in the business sector but fast spreading in all domains of IS/KBS as we repeatedly mentioned [20][13][16], although here the point is deeper, in the cultural and humankind evolution, both aspects of Data Deluge being very well reflected by [9]: <<“Get Smart” will take on a whole new meaning” …

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

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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! … And what data there will be! Six years ago, Google’s Eric Schmidt claimed we create as much information every two days as has been created since the dawn of civilisation and the year 2003>> The new meaning of get smart is in fact leading to our paper title (only when smart one knows what to learn and what to ignore), as ICT Data Deluge use is enabling the extraction of information/knowledge with semantic methods that mainly benefit from the ICT advances and the consequences are more than fruitful, as it is further remarked: “Storage on the other hand is becoming more accessible to new and fast growing businesses. …. Personal cloud usage has increased from zero in 2010 to over one billion users this year and will increased to 2.5 billion by 2020. The volume of data stored has increased from zero 2010 to 17 exabytes by 2015 and will increase to 45 exabytes by 2020. New industries have emerged to accommodate the growth of the digital era and personal / small business cloud storage. Box.com with a market share of over 50% in the USA, lays claim to a 30% share world wide. The company still lays claim to a market cap of $1.3 billion US.“ The support of all these figures, which are naturally changing every year (or even month), is provided, as we have above mentioned, by the two pillars of ITC [11]: “The two key technological drivers of the IT revolution are Moore’s Law – the exponential increase in computing power and solid-state memory - and the dramatic increase in communication bandwidth made possible by optical fibre networks using optical amplifiers and wave division multiplexing. In a very real sense, the actual cost of any given amount of computation and/or sending a given amount of data is falling to zero.”

It is worth to observe that here is explained one of the prominent mechanisms of ICT and Data Deluge proliferation, as cost of computing and communication is falling to zero.

On the other hand, our paper point is to show that this reality is not necessary a guarantee that the benefit in information/knowledge is automatically high, but on the contrary, it is necessary to have higher expertise (means/methods) to extract information and eventually knowledge from the Data Deluge.

We still have to add that recently the communications pillar is clearly supported and unprecedently expanded by the advances of broadband mobile communications, starting with 4G and now rising with 5G on a level that could be a new revolution (industry 4.0) of IS/KBS exceeding the ICT area in conjunction with IoT [13]17][19][20].

Broadband mobile communications and IoT will probably become the main support contributors of the Data Deluge, but the mechanisms of increasing the data flows are more that the technical capacity, including the complex processes where the new applications enabled by the 5G low latency (1ms) and high speed (20 Gb/s) will leverage the people and devices to generate more and more … data.

The above presented premises and features created a frame for Data Deluge and most important for what it could be for humankind and Earth in IS toward KBS, but a relevant example would clearly complete the actual image and add credible forecasts for its evolution.

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By the next synthetic description, based on the comprehensive presentation of [1], it will be evident why for the paper entry in Data Deluge issue we have chosen the CERN amazing “temple” of science and technology.

CERN is the European Laboratory for Particle Physics, located at the Franco- Swiss border near Geneva. CERN has been pushing the boundaries of knowledge and technology for more than 60 years.

The CERN project includes 22 member states and a global community of 15,000 researchers, but there are also 3 observers and 8 associates states (Romania being an associate member), having a general world-wide budget 1100 MCHF (2017). Experiments are run by collaborations of scientists from institutes all over the world.

The CERN’s mission is well tailored for such structure and budget, pointing international research, technology, education and collaboration. As a consequence, CERN will advance the frontiers of knowledge like the fundamental structure of the Universe, the generation of Universe by Big Bang, the kind of matter within the first moments of the Universe’s existence, understanding the very first moments of Universe after the Big Bang or Dark Matter looking for Antimatter.

In addition, CERN will develop new technologies for particle accelerators and detectors, but also for emergent fields like advanced ICT (including Quantum Computing), Web (the World Wide Web was invented at CERN in 1989 by British scientist Tim BernersLee) or the (computing) GRID. The medical diagnosis and therapy will also considerably benefit from the unprecedented advances achieved by the CERN. For an accurate and astonishing image of the main features and performances of CERN infrastructure for Particle Physics, the next details are also extracted from [1]: “The LHC (Large Hadron Collider) is the world’s largest and most powerful particle accelerator. It is built around 100 m underground and has a circumference of 27 km.

The LHC is a machine of records, including: - HOTTEST spots in the galaxy - COLDER TEMPERATURES than outer space - The FASTEST RACETRACK on the Planet - The Most Powerful MAGNETS - The Highest VACUUM - The Most SOPHISTICATED DETECTORS ever built: CMS ALICE ATLAS LHCb - The particles are accelerated to close to the speed of light - The detectors are like gigantic digital cameras built in cathedral-sized caverns.

Two general-purpose detectors cross-confirm discoveries, such as the Higgs boson: - ATLAS 46m long, 25m diameter weights 7’000 tonnes 100 million electronic channels , 3 000 km of cables - CMS 22m long, 15m diameter weights 14’000 tonnes Most powerful superconducting solenoid ever built.”

A remarkable feature is that CERN research is very mature planned, as the two general-purpose detectors (Atlas and CMS) are designed to cross-confirm discoveries (like the Higgs boson is a historical one), this way the results have a high degree of confidence and reliability, reflected also by the other two detectors:

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“ALICE and LHCb (the “b” stands for beauty) experiments have detectors specialised on studying specific phenomena. LHCbALICE Studies the «Quark Gluon Plasma», state of matter which existed moments after the Big Bang. Studies the behaviour difference between the b quark and the anti-b quark to explain the matter-antimatter asymmetry in the Universe.

Collisions generate particles that decay in complex ways into even more particles. Up to about 1 billion particle collisions can take place every second. This can generate up to a petabyte of data per second. Filtering the data in real time, selecting potentially interesting events (trigger).”

After these impressing performances of CERN infrastructure for Particle Physics, is hard to add something, but it is worth to mention that, just like other prominent achievements of IA/KBS where ICT is pushing exponentially all the limits, CERN infrastructure has a dynamic development (i.e. the story goes on higher), which include 6 runs from 2010 to 2038.

Still, the fact that CERN experiments are run by collaborations of scientists from research organizations all over the World, although seem less spectacular, has also huge consequences either for the general scientific results and their impact on IS/KBS but especially for the impact on the CERN contribution to Data Deluge, by CERN computing infrastructure and especially by what at CERN is called GRID (an international ICT network which supports even the real time processing of CERN results).

Perhaps another astonishing aspect is that CERN is planning to extend LHC to a new one, about 100km long, connected with the actual one of 27km longness [12].

While these types of forecasts send us nearly to science fiction, the heart of CERN computing infrastructure, i.e. of the Data Deluge CERN contribution, will be further valued and better perceived in the next section (where we have to analyse how anything about Data Deluge could come faster and ... everywhere), because here (where the Data Deluge comes from) we have seen just the tip of the iceberg that Data Deluge is or could become, as this section might have been continued with other relevant examples, but we think that none could reach the CERN unique records (although, in the same class of Data Deluge “giants”, we could add Facebook, Google, Amazon, Netflix etc.).

Anyway, further we have to try to analyse what and how, under these storm waves of Data Deluge, is going to melt these icebergs in order to extract and use the best of information/knowledge humankind and Earth need today and especially … tomorrow.

2. The perpetual dilemmas of selecting information now come faster and ... everywhere After observing the CERN amazing “temple”, another huge “image” that could be recalled from ancestral World history is the antiquity Pyramids (Egyptian or Mesoamerican), as they still continue to generate new data for the archaeological researchers.

Of course, the CERN huge dimensionality are astonishing by its multilateralism, including the unique combination of dimensions like physical, electric and magnetic power, speed of light, high tech, number of scientists or … data flows.

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On the other hand, the Pyramids mainly impress by their physical, cultural or even high tech achievements, considering the realities of thousands years ago.

Still, for both “giants” we can observe, in our days, a common feature: they generate a lot of data, but keeping the scale, which is really a miracle in the case of Pyramids.

Here the point is to reveal the fact that the great humanity achievements have a special power to generate data, information and eventually knowledge, but at a level which depends on humankind evolution phase we are in.

With other words, we have to notice the incredible differences this recent evolution created, in the last decades, especially on high tech and … data flows, i.e. the Data Deluge.

More than these, the disproportional comparison of the antiquity Pyramids with CERN was deliberately chose just to emphasise the huge role of using the technology advances (mainly enabled by ICT) for generating Data Deluge and then extracting information and eventually knowledge, even from sources (like the antiquity Pyramids) which almost have “run dry” before this new technological support.

Anyway, this section is generally focusing on the analysis of the deep and complex processes in which people generate or perceive data, information and eventually knowledge, aiming to optimize their efficiency for a sustainable development of IS/KBS, considering, as we have already presented [18][10], that the exponential pace of ICT and other progress factors could have side consequences, first including climate changes, Earth resources fading and humankind health on long term.

It is worth to notice from the start the importance of the humankind evolution phase we are in, for the relevance of any analysis results, as the above revealed that in every phase the technology advances push the data, information and eventually knowledge generation to a higher level (quite incredible before), which explains also the miracle in the case of Pyramids.

For clarity, here we just shortly mention the crucial interest for other cases, like DNA (human genome) and generally for biogenetic engineering, where long expected results would have to appear just in our days phase, when the incredible advances of ICT and other associated technologies (like nanotechnology) have the chance to push the results, i.e. data, at content and semantic levels that could further provide information and eventually knowledge with the desired practical and sustainable applications/implications and then benefits (sometimes considered impossible until recently).

This way we have entered in the deep and complex processes where data, information and eventually knowledge are linked with a multitude of goals the people could have when they expect the desired data and look, from a semantic perspective, for using them to fulfil these wishes.

The difficulty and complexity of such analyses and optimization approaches are badly increased by the fact that all the mentioned processes premisese are fast and nonlinearly changing, mainly because of ICT/IS/KBS exponential pace, this way generating ...everywhere a dynamic challenge of the mentioned semantic perspective, which in a simple expression could be: What to learn and what to ignore?

Surely this question is not simple to be answered, nor if we find for it another form, like the perpetual dilemma of selecting information, considered in our days, when … it comes faster and ... everywhere.

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For starting to understand the mentioned complex processes, it is important to approach The Difference Between Data and Knowledge, as it is also intended in [4]: “Data is the lowest tier of the classical Data, Information, Knowledge, Wisdom (DIKW) pyramid (Ackoff, 1989) and forms the basis of our knowledge and wisdom. We interpret ‘data’ to generate a tangible insight that we then call ‘knowledge’ but this distinction is often missed, and the terms of data and knowledge are frequently used interchangeably. Simply having data does not create knowledge and creating large amounts of data does not automatically generate lots of knowledge. Instead, more thought and more tools are needed to help us to ascend this value chain.”

Here we find a clear confirmation of our continuous preoccupation [7], as for leveraging knowledge refining it is necessary to timely think (have a thought) and create appropriate ICT tools [3], because creating large amounts of data does not automatically generate lots of knowledge.

As a matter of fact, in this paper, we approach both tools and thoughts related to the processes involved in knowledge creation in this epoque of Data Deluge, but pointing the diversity, complexity and difficulty of semantic context cases where we have to select the optimal data (amount) leading to the desired information and eventually the knowledge benefic to … wisdom.

Speaking of tools, now is the case to give as relevant example the heart of CERN computing infrastructure, i.e. of the Data Deluge CERN contribution [1]: “The CERN data centre(s) processes hundreds of petabytes of data every year.

CERN’s data centre in Meyrin is the heart of the laboratory’s computing infrastructure…

The Wigner data centre in Budapest serves as an extension to the one in Meyrin. The two centres are connected by three 100 Gb/s fibre-optic links. MEYRIN CENTRE (CH): 300,0000 processors cores 180 PB on disk 230 PB on tape … WIGNER CENTRE (H): 100,0000 processors cores 100 PB on disk…The two centres are connected by three 100 Gb/s fibreoptic links.”

Notice that CERN computing infrastructure is more than a computing core, i.e. a network which leverages, by international collaboration, the knowledge refining with a fast pace, close to ICT development pace.

The CERN computing infrastructure is further used along with an ICT huge network, called Worldwide LHC Computing Grid (WLCG) by the CERN researchers. WLCG is used sometimes in real time, for leveraging the best results [1]: “Physicists must sift through the 30-50 PBs produced annually by the LHC experiments…The WLCG gives thousands of physicists across the globe near real-time access. Tier-0 (CERN and Hungary): data recording, reconstruction and distribution. Tier-1: permanent storage, re-processing, analysis. Tier-2: Simulation, end-user analysis…The Worldwide LHC Computing Grid integrates computer centres worldwide to combine computing and storage resources into a single infrastructure accessible by all LHC physicists…

With 170 computing centres in 42 countries, the WLCG is the grid that never sleeps!

The size of WLCG… ~1M CPU cores; ~ > 2 million jobs/day;

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~1EB of storage; ~ 10-100 Gb/s links; ~ 340 Gb/s transatlantic; ~3PB moved per day.â&#x20AC;?

Generally speaking and leaving the CERN case, the analysis of complex processes where data stream to information and eventually knowledge, should continue pointing the main factors that could influence this (long) road, as it is also agreed by [4]: â&#x20AC;&#x153;On a practical level, most scientific instrumentation can produce many channels of data for processing and further analyses. However, scientific knowledge generation from these data sources can be hampered by various limiting factors, each of which becomes more impactful as the volume and diversity of data increase. Each of these factors can work alone or in concert. If not controlled, however, these factors can combine to reduce the ability to produce information, and therefore scientific knowledge.

Looking at this in detail, we can quickly generate a shortlist of limiting factors that fall into two broad categories, classified as environmental and cultural factors.

Environmental factors can be defined as attributes that relate to the process of generating knowledge from data.

Conversely, cultural factors, when generating scientific insight, can arise as a consequence of how our science training directs us to look at data and are oftentimes institutionally/ historically-based in their origin.â&#x20AC;?

We appreciate that this processes image, although general and perhaps too abstract, is very comprehensive in synthetically covering such complex diversity.

In reality, both classes of factors are very difficult to be completely separated, because they are related with the same complex processes, where data are generated, either by humans and machines, while the most critical phases, the information acquiring and then knowledge generation are usually performed by humans, but lately AI by machine learning (ML) and soon by cognitive AI systems (CAIS) tend to approach just this high level of human intelligence (knowledge generation).

As a matter of fact, recent advances of AI are more and more efficient for extracting information (and even knowledge) from data, but both humans and AI machines use mainly semantic methods for selecting that information.

The main problem, as a dynamic challenge, remain the level of the desired knowledge, or, in a simpler expression, the ability of humans or machines to refine knowledge, because in fact, in any domain we could consider a progress only when the old information/knowledge is improved/replaced by the new one (a refined one) with a higher efficiency/capacity to be useful and this way we have just arrived to the obsessive question: What to learn and what to ignore?

We have to observe that, in spite of all our efforts to detail and then optimize these processes where data stream to information and eventually knowledge, every step, no matter how deeply described, contains relative and difficult to quantify elements, which in addition are time sensitive, i.e. we face a dynamic challenge and we have already compared such situations with Morgan le Fay (Morgana mirage) [3] [14].

The inherent causes of such a dramatic reality are linked with the ever changing human perceiving of the World (human personality subjectivity), which is amplified by the

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exponential advances of ICT (which enable access to a large diversity of data/options from where people could choose/select everyday), because these two features are in a complex mutual dependence when generating the fundamental (above mentioned) tools and thoughts.

In the actual World, we would consider that environmental factors could be located among the Data Deluge sources (where the Data Deluge comes from) we have discussed mainly in the first section, while the cultural factors are referring to the intimate, diverse, complex and dynamic processes where data are analysed, interpreted or selected by humans or â&#x20AC;Ś machines, usually (but not exclusively) by semantic methods which naturally benefit from ICT prominent advances like AI/ML/CAIS. Arriving at this point, it is clear that our analysis needs to be further continued, in order to get deeper (usually, but not always, scientific) insights when looking to Data Deluge, which, in our days comes faster and ... everywhere.

3. Conclusions The Data Deluge is generated by the flows of data created by the complex proliferation and exponential development of ICT at Earth scale and has a huge diversity of generation sources, but the paper analysis is focused on a systemic approach in order to observe the main premises and features of such complex processes, aiming the optimal efficiency of data generation and use, for humankind and Earth survival.

The main emergent (hype) technologies for ICT exponential development in 2019 are considered, as contributing to Data Deluge and including Artificial Intelligence (AI), Internet of Things (IoT), Cloud, Big Data, 3D Printing, Robotic Process Automation, Hardware Robotics, Blockchain, Augmented/Virtual Reality.

Generally ICT, but mainly all the above mentioned emergent (hype) technologies, contribute, by their complex processes that involve people, machines and devices in a planetary digital disruption, to the huge phenomenon called Data Deluge, but it is worth to notice that behind is still, mostly but not exclusively, the Internet (3.0 industry revolution) as a backbone.

Because the scientific and economical World contain, naturally, the most of processes to generate Data Deluge, for the paper entry in Data Deluge issue we have chosen the CERN amazing â&#x20AC;&#x153;templeâ&#x20AC;? of science and technology. Also, social media have produced crucial changes in the way we live, including business models, but entertainment and other applications that use broadband mobile communications provided are also impressive in generating Data Deluge.

All these Data Deluge sources are illustrated with global figures that seem to be more impressive every year (over half a Yottabyte are generated), as the overwhelming park of connected devices and people are exponentially increasing, approximately following the Moore Law consequences as an invitation to Data Deluge.

Although the cost of computing and communication is falling to Zero, this reality is not necessary a guarantee that the benefit in information/knowledge is automatically high, but on the contrary, it is necessary to have higher expertise (means/methods) to extract information and eventually knowledge from the Data Deluge. This way, broadband mobile communications and IoT will probably become the main support contributors of the

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Data Deluge, but the mechanisms of increasing the data flows are more that the technical capacity, including the complex processes where the new applications enabled by the 5G low latency (1ms) and high speed (20 Gb/s) will leverage the people and devices to generate more and more data.

As prominent and relevant source of Data Deluge, CERN project is presented (it includes 22 member states and a global community of 15,000 researchers). The CERN’s mission is pointing international research, technology, education and collaboration. CERN will advance the frontiers of knowledge like the fundamental structure of the Universe, the generation of Universe by Big Bang, the kind of matter within the first moments of the Universe’s existence, understanding the very first moments of Universe after the Big Bang or Dark Matter looking for Antimatter. In addition, CERN will develop new technologies for particle accelerators and detectors, but also for emergent fields like advanced ICT (including Quantum Computing), Web (the World Wide Web was invented at CERN in 1989 by British scientist Tim Berners-Lee) or the (computing) GRID. The medical diagnosis and therapy will also considerably benefit from the unprecedented advances achieved by the CERN. The CERN LHC is a machine of records, including: hottest spots in the galaxy; colder temperatures than outer space; the most sophisticated detectors ever built; the detectors are like gigantic digital cameras built in cathedral-sized caverns.

Concluding that CERN is just a tip of the iceberg that Data Deluge is or could become, other relevant examples could be given, but we think that none could reach the CERN unique records (although, in the same class of Data Deluge “giants”, we could add Facebook, Google, Amazon, Netflix etc.). Anyway, further we have to try to analyse what and how, under these storm waves of Data Deluge, is going to melt these icebergs in order to extract and use the best of information/knowledge humankind and Earth need today and especially tomorrow.

In the second section of the paper, a disproportional comparison of the antiquity Pyramids with CERN was deliberately chosen just to emphasise the huge role of using the technology advances (mainly enabled by ICT) for generating Data Deluge and then extracting information and eventually knowledge, even from sources (like the antiquity Pyramids) which almost have “run dry” before this new technological support. Notice the importance of the humankind evolution phase we are in, for the relevance of any analysis results, as the above revealed that in every phase the technology advances push the data, information and eventually knowledge generation to a higher level (quite incredible before), which explains also the miracle in the case of Pyramids. The analysis also considered the deep and complex processes where data, information and eventually knowledge are linked with a multitude of goals the people could have when they expect the desired data and look, from a semantic perspective, for using them to fulfil these wishes.

The difficulty and complexity of such analyses and optimization approaches are badly increased by the fact that all the mentioned processes premisese are fast and nonlinearly changing, mainly because of ICT/IS/KBS exponential pace, this way generating everywhere a dynamic challenge of the mentioned semantic perspective, which in a simple expression could be: What to learn and what to ignore?

The paper approached The Difference Between Data and Knowledge, observing that for leveraging knowledge refining it is necessary to timely think (have a thought) and create

27

appropriate ICT tools because creating large amounts of data does not automatically generate lots of knowledge. Approaching both tools and thoughts related to the processes involved in knowledge creation in this epoque of Data Deluge, we pointed the diversity, complexity and difficulty of semantic context cases where we have to select the optimal data (amount) leading to the desired information and eventually the knowledge benefic to … wisdom.

As tools prominent example, the heart of CERN computing infrastructure, was given, as the Worldwide LHC Computing Grid (WLCG) includes: 170 computing centres in 42 countries;1M CPU cores;1EB of storage; 340 Gb/s transatlantic; 3PB moved per day.

The analysis of complex processes where data stream to information and eventually knowledge pointed the two main factors that could influence this (long) road, considering that environmental factors could be located among the Data Deluge sources (where the Data Deluge comes from) we have discussed mainly in the first section, while the cultural factors are referring to the intimate, diverse, complex and dynamic processes where data are analysed, interpreted or selected by humans or … machines, usually (but not exclusively) by semantic methods which naturally benefit from ICT prominent advances like AI/ML/CAIS. The final conclusion is that our analysis needs to be further continued, in order to get deeper (usually, but not always, scientific) insights when looking to Data Deluge, which, in our days comes faster and ... everywhere.

REFERENCES [1] Maria Girone, Tackling Tomorrow’s Computing Challenges Today at CERN, ISC 2018, Published in: Technology, Aug 1, 2018 [2] ***, CERN Open Days 2019 | 14–15 September, 2019, https://opendays.cern/.

[3]Victor Greu, The information and communications technology is driving artificial intelligence to leverage refined knowledge for the World sustainable development– (Part 2), Romanian Distribution Committee Magazine, Volume 10, Issue 1, Year 2019.

[4] Kevin Teburi, How to Stem the Tide of Data Deluge to Produce Better Science in Biopharma R&D ibi teburi pdf how to stem the tide of data deluge- international biopharmaceutical industry summer/autumn 2018 volume 1 issue 2.

[5] ***, Emerging Technologies: Changing how we live,work and play, EY-Mint Emerging Technologies Report 2019 , https://www.ey.com › ey-mint-emerging-technologies-report2019 [6] ***, Tech Trends 2019 - Deloitte, https://www2.deloitte.com/content/dam/ Deloitte/fi/Documents/ technology/DI_TechTrends2019.

[7]Victor Greu, Extending information and communications technologies’s impact on knowledge based society through artificial and collective intelligence –(Part 3), Romanian Distribution Committee Magazine, Volume 9, Issue 3, Year 2018.

[8] Mudassir Khan, Big data analytics emerging trends, technology and innovations for the future business in the global market, International Journal of Scientific Research and Review, Volume 8, Issue 2, 2019

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[9] John Ashcroft, Six Things Everyone Should Know About Digital Disruption, The Saturday Economist Published in: Business, Jul 6, 2016 [10]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.

[11] Tony Hey, Anne Trefethen, The Data Deluge: An e-Science Perspective, http://www.computing.surrey.ac.uk/courses/csm23/Papers/DataDeluge.pdf], Wiley, 2003.

[12] Harry Cliff, CERN: Large Hadron Collider replacement plans unveiled – here’s what it could discover, January 18, 2019, https://theconversation.com/cern-large-hadron-colliderreplacement-plans-unveiled-heres-what-it-could-discover-109983.

[13]Victor Greu et all, Human and artificial intelligence driven incentive-operation model and algorithms for a multi-purpose integrated crowdsensing-crowdsourcing scalable system - paper submitted to International Conference Communications 2018 (Politehnica University of Bucharest, Romania Military Technical Academy, IEEE Romania), June 2018.

[14]Seth Earley, There Is No AI Without IA, 2016, IEEE IT Professional (Volume: 18, Issue:3, May-June 2016) [15]Niko Mohr, Holger Hürtgen, Achieving business impact with data - A comprehensive perspective on the insights value chain, Digital McKinsey 04.2018 Copyright © McKinsey & Company www.mckinsey.com [16]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 [17]Mike Sirius, How artificial intelligence and innovation will interact, June 5, 2017, Idea Drop Ltd,http://ideadrop.co/artificial-intelligence-innovation/ [18]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.

[19]Bhupinder Kour, The Rise of Machine Learning and AI is Improving Lives in 2018, https://www.smartdatacollective.com/rise-of-machine-learning-ai-improving-lives/ [20]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.

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The Influence of Digital Transformation on the Retailing Value Chain

by Cosmin TÄ&#x192;nase

Abstract Consumers have traditionally made purchase decisions at the store shelf, giving institutional retailers great power to learn about and influence behaviors and preferences.

With the rise of e-commerce, mobile shopping, and most recently smart technologies, new competitors threaten this long-standing supremacy. Depending on the importance of the new sources of value creation (in different purchase situations), stationary retailing may prevail as an important interaction point in a multichannel decision journey. However, increasing diffusion of branded-product platforms including connected devices and online retail platforms is shifting this authority to new players. For the parties involved in this multilayered competition, acknowledging the changes and actively managing their position in the evolving eco-systems is crucial.

Keywords: Digitization, retailing, customer interface, brands, consumers, plat forms JEL Classification: L81, M31

Platform businesses have revolutionized many retailing markets and forced traditional players to exit the market or consider far-reaching strategy adaptation. Transformative business 30

model innovations often become necessary, because competing head-to-head on product sales with fully grown retail platforms is almost always a lost cause.

Consequently, platforms have come to dominate online retail sales. In 2018, the platform business on Amazon, Amazon Marketplace, accounted for more than 50% of all of Amazon’s ecommerce revenues, corresponding to an annual growth rate of 39%. Owing to easy scalability at virtually zero marginal costs, online retail platforms are growing much faster than institutional online or multichannel retailers. As with other forms of two-sided markets, retail platforms give rise to network effects because the platform’s overall value to sellers and buyers increases with a growing user base on either side. Hence, large platforms tend to grow even more while small competitors are pushed out of the market, resulting in winner-take-all outcomes.

Digitization breaks up retail’s monopolistic ownership of the customer interface and provides opportunities for new gatekeepers to emerge. It shifts traditional retail functions to different players, rendering the creation of competitive advantage based on these functions increasingly difficult. However, digitization also gives rise to new sources of value creation, which address longstanding customer needs more effectively than previously possible. The players can orchestrate value creation through the new sources to ensure their place in the retailing arena.

Stationary retailers In this new environment, many retailers recognize that they will not be able to compete efficiently on the price or the assortment dimension with pure online retailers or with platforms.

Hence, they increasingly focus on customer experience and sensory and haptic engagement. The trend toward smaller stores, pop-up stores, or experience stores in high-frequency environments speaks to this fact. For example, the car brand and retailer Audi builds digital showrooms in inner metropolitan districts to interactively and virtually engage customers with the brand and the product.

However, the challenge is whether and how retailers (and brands) are still able to convert those experiences into the requisite revenues. Also, the move of physical retailing toward showrooms and service hubs creates a need for more product and technical experts, which in turn requires investment in more sophisticated personnel and training and gives rise to new retail jobs like styling advisers (in fashion) or garden planners (in DIY).

Further, true omnichannel touchpoint management asks for competent experts not only on site but also in the chat and call center. Linked to that challenge is the question of whether sensory and haptic experiences generate sufficient value to consumers to enable retailers to compete effectively. Researchers could explore how physical stores can exploit their exclusive value-creation potential in terms of providing experiences and empowerment, enabling them to succeed in an increasingly digital world. For example, studies could develop measurements of experiential customer value and assess which of the various in-store experience attributes contribute most to perceptions of customer value. How do these perceptions depend on product characteristics (e.g., category or price) or customer traits (e.g., need for attachment or stimulation), and what is the role of in-store technologies for value creation? Hence, questions for future inquiry are:  If stores serve only as experience hubs, how does revenue generation work in the future?

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 Does the generation of sensory and haptic experiences actually work to compete against the efficiency of platforms? Many physical retailers struggle to remain in business, as exemplified by the many mall closures in the US or failures of prominent established retailers (Blockbuster, Radio Shack, American Apparel). At the same time, retailers are an essential part of maintaining attractive and vital inner cities. Retailers attract shoppers, visitors, and tourists who then patronize restaurants, attractions, and leisure facilities. Practically, all mature retailing environments in the US, UK and throughout Europe are characterized by the success of companies such as Aldi, Lidl, and Primark.

These formats compete heavily on price and are always price leaders in their respective category.

Hence, cost control is absolutely essential for these formats.

Most interestingly, these banners rarely have e-commerce activities, as these would be too expensive to create and operate next to the physical stores. In other words, routes to success seem to exist in physical retail, even without engaging in digital offerings. The unanswered question is whether the sale of essential consumables will transfer to automated online branded-platform formats – thereby threatening this hugely successful retail format. Further research questions thus arise:  What are the societal implications of a diminishing physical retailer presence?  Is the extremely successful retailing format of hard discounting (Aldi, Primark) shielded against digitization?

Branded product platforms The goal for branded platform owners is differentiation from rival platforms, establishment of a stable, private eco-system, and creation of a lock-in for existing customers through the platform’s intrinsic and extrinsic benefits. Value creation may come through (re-)purchase offerings, inherent use values, complements, or partners. Particularly interesting is the advancement of need recognition and fulfilment in the direction of true solution selling. Insights into customer habits, preferences, and experiences can help create personalized recommendations not only for single products or product bundles but for entire activities. For instance, a travel app could analyze users’ profiles to predict the next backpacking trip. It could then suggest options, such as how to prepare for a three-month trip to South America, and advertise the requisite equipment such as tents and sleeping bags. The promotion might include backpacking equipment and accommodation arrangements, along with local tour recommendations and a crash course in Spanish.

The closer platform owners move to these core consumer needs, the more locked-in users become in the respective eco-system. In essence, the brand nudges the consumer from very simplistic product transactions to much deeper and ongoing interactions, essentially providing a real solution to customers’ problems. Several questions are related to this activity: 1. What are the mechanics to lock customers into the brand platform? What is the role of the experience/use stage versus the transaction stage? How do solutions fit in? The collateral effect of lock-in and the importance of brand equity become apparent for competing brand platforms. The risk of being locked out of the customer’s consideration set increases as platforms begin to serve as the

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primary interface for interaction and gaining direct access to those customers becomes difficult. In traditional retailing environments, all brands had, ceteris paribus, access to all customers at the point of sale. Likewise, in the traditional communication environment, all brands could send their messages via mass distribution more or less equally. In the new brand platform eco-system, the focal customers become notoriously hard to reach for competitors. This difficulty might arise because customers simply do not pay attention to competing brand platforms or because purchases are being automated. Hence, competitors often simply do not have access to those customers for either the transaction or the communication and have to struggle much harder to gain legitimate access to consumers’ minds and hearts.

2. If customers lock into brand platforms and more purchases become automated, how can competition dislodge customers? What is the role of marketing communication? In brand platforms, consumers engage more in subscription-based and automated transactions. While value is generated across the entire search, transaction, and consumption cycle, consumers likely reduce their choice set and may also pay higher prices per transaction than under the old retailing model. In other words, a new balance is likely to emerge involving a shift from a multitude of diverse product transactions in the traditional sense to a transaction that focuses on fewer but more encompassing brand–customer relationships where the transaction itself is immersed into the entire relationship.

3. What is the impact of automated transactions on customers’ choice making and prices paid? What do customers value more within the larger relationship context? Finally, future studies could examine how IoT (Internet of Things) products and branded-platform eco-systems affect consumers and consumer–firm relationships. These technologies enable firms to get very close to customers’ actual behavior, indeed to invade their very private territory, which may discourage branded platform adoption. A case in point is consumers’ alarm at the numerous glitches and capabilities in Amazon Alexa’s voice technology. Future studies can explore whether and under what circumstances consumers perceive technological advancements as a threat to their privacy or autonomy and what firms can do to alleviate privacy concerns or to mitigate customer perceptions of lock-in.

4. How do consumers perceive and interact with smart durables and IoT products? Under what circumstances would consumers perceive smart durables as a threat to their privacy or autonomy?

For branded platform business models, new monetarization opportunities may exist. Hence, future studies could inform firms about pricing or business model decisions. For instance, researchers can use simulation approaches to estimate revenue models that account for new revenue streams, such as revenues from sales of complementary products, from data (e.g., displaying targeted advertisements of third-party complementary providers), or from premium functionalities of smart durables (e.g., paying extra fees for specific functions).

Conclusions Clearly, online retail platforms seem to be the big winners in the retailing environment. However, even they encounter challenges, which open new avenues for research. These platforms often operate as a department-store model, as exemplified by Amazon or Alibaba. However, the platforms may suffer when both retailers and brands counter this trend with more focused relationships with

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customers. Retailers and brands may offer solutions, expertise, and tailored customer experiences for products and thus serve as gatekeepers with respect to many decisions once made on online retail platforms. The attractiveness of general platforms may also suffer. How can retail platforms advance their value propositions as manufacturers and retailers attack their current “department store” business model through branded product platforms and specialization/solution selling? Another challenge for platforms is suppliers’ and brands’ ambivalence about their relationships. Brands feel intermediated from their customers, transaction commissions tend to be significant, and some platforms choose to sell their own versions of certain products once they realize the revenue potential of those products. Therefore, some brands will not consider selling on those platforms and other brands withdraw after their negative experience with the platform. Brands often search for ways to be independent of those platforms – especially large brands that do have enough clout on their own.

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[2] Bilgicer, T., Jedidi, K., Lehmann, D. R., & Neslin, S. A. (2015). Social Contagion and Customer Adoption of New Sales Channels. Journal of Retailing, 91(2), 254–271.

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Retailers’ Struggling to Adapt to the Changing Consumer Theodor PURCĂREA Abstract Recent research reconfirmed retailers’ struggling to continuously improve the retail shopping experience in brick and mortar stores, balancing the brick and mortar and online presences, including considering the contribution of the click-and-collect services. There is no doubt about retailers’ need of better understanding consumer shopping decisions by learning the difference between macro and micro journeys. Going beyond “Amazonification of Commerce”, it is worth taking a look at Amazon’s valid plans for the future, Walmart’s Omni channel push, the expansion of the D2C retail, and merchandising’s approach within the significant “Idea to Doorstep” process suggested by FitForCommerce, considering the lessons to learn.

Keywords: Retail Shopping Experience; Click-and-Collect Services; Amazonification of Commerce; D2C Retail; “Idea to Doorstep” Process JEL Classification: L81, L86, M31, Q55

Shopping in Brick and Mortar Stores. Balancing the Brick and Mortar and Online Presences Recent research reconfirmed that before exposing consumers to the very forefront of technological development retailers need to adequately approach the in-store basics, getting shelving, inventory, and cleanliness to high standards, so as shoppers to return to brick-andmortar stores. (Selbie, 2019) According to the ServiceChannel’s May 2019 report on the state of Brick and Mortar retail, the majority of U.S. consumers (86%) still make more than half their purchases at physical stores, and many of them (70% of shoppers) had a recent negative CX (52% of shoppers leaving after one bad experience without making a purchase).

At the beginning of September this year Sammy Nickalls, the Departments Editor for the reputed Adweek, made reference to the consumer intelligence company Resonate whose new research (Resonate Insights 2019) also revealed that shopping in Brick and Mortar stores at a regular rate is still commune across all age groups and income levels (beyond the growth in online shopping and direct-to-consumer brands), shoppers caring about: duty (48%), conformity (27%), creativity (23%), influence (19%), dependability (19%), authority (17%). (Nickalls, 2019) Compared to average consumer, these shoppers are: using coupons (11%), shopping at mass merchants (11%), using a prewritten list (10%), making impulse purchases (7%), shopping at a warehouse/club store (7%), buying online and picking up in-store (3%). Resonate’s

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recommendation for retailers underlines the imperative of further adequately segmenting their audiences and customizing their messaging.

On the other hand, within this framework, we also have to take into account the contribution of the click-and-collect services because of the speed and convenience of the retail shopping experience: • according to the “2019 Global Shopping Trends: Essential Insights for Retailers survey report” (online survey conducted by iVend Retail with research firm AYTM from December 2018 to January 2019; 2,750 respondents around the world, including both males and females, ages 18+) the main motivators for click and collect/buy online pickup in store (BOPIS) – which experienced an increase in adoption of 30% over last year – were saving money on shipping charges (47.4%) and saving time (44.4%); • in U.S., because they wanted to get a product in their hands quickly, 59% of Gen Z shoppers ages 18 to 25, surveyed in May 2019 by mailbox tech company Package Concierge, used BOPUS within the past month, while the last-minute shoppers (30% of respondents) used BOPUS because they needed something immediately (as shown in the figure below); (Kats, 2019)

Figure no. 1: What are the most common reasons that US Gen Z Internet users use Buy Online, Pick Up InStore (BOPUS) Source: Kats, R. (2019). Gen Zers Are Turning to BOPUS for Instant Gratification, eMarketer, Aug 19 (work cited)

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• speed and convenience are also very highly valued by Starbucks’ customers, for example (beyond the pickup-only location tested in 2017 at its headquarters in Seattle), Starbucks’ inspiration for a store (handling only pickup and delivery orders) in Manhattan, New York City, coming from the Starbucks Now locations operated in China as express pickup locations for customers placing orders on their mobile devices; (Anderson, 2019) • a further rise in click-and-collect was illustrated also in the case of Back-to-School (BTS) shopping (the second-busiest shopping time of the year in U.S.) by results from ICSC’s 2019 BTS survey illustrate a further rise in click-and-collect, confirming the increasing use of clickand-collect benefits Omni-channel retailers; this survey revealed that: 41% of these U.S. shoppers (July 2019) purchased (or said that they will purchase) using BOPUS (see the table below); 68% of BTS shoppers reported that before shopping at a store location for the desired items they do research online (compared to 65% in 2018, and 60% in 2017).

Table no. 1: Shares of BTS Shoppers and Expenditures by Retail Format

Source: Early Start to a Promising Back-to-School Shopping Season. Increasing Use of Click-and-Collect Benefits Omni-Channel Retailers, ICSC, Industry Insights, Consumer Series, August 5, 2019 (work cited)

• according to the ForwardPMX’s annual Back to School U.S. Trend Report, BOPUS continues to grow in popularity in U.S., and retailers are getting additional foot traffic from BOPUS customers (while being in-store a good percentage of BOPUS customers make another purchase). (Schembri, 2019) Allow us to underline within this framework that in Romania, at the beginning of the BTS shopping time, Auchan, for instance, launched an invitation to a Back to School mega event (between 6 and 15 September 2019) to meet and to interact with Pilot robots (Meeting sessions with the “Technology of the future”, interactive moments with the Robots of the 21st century, 35CU, 3-L3-NA și N33-COO; VR glasses; Magic mirror). This made us recall that two years ago, in the Retail 2017 Trend Report of MonarchFx, a Tompkins International Company, was showed, among other aspects, that: “In November 2016, French supermarket chain Auchan announced that it will trial robots that follow customers in stores, carry, and check out groceries”. (Marino, 2017)

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Better Understanding Consumer Shopping Decisions by Learning the Difference Between Macro and Micro Journeys In May 2019 Deloitte’s representatives attracted the attention on the fact that parameters such as convenience or value are likely to be constantly changing in the mind of a consumer, who is changing because: the environment around him is evolving; of the economic constraints he is operating under and his spending pattern impacted by his income (which it is especially true in the case of the low-income, middle-income, and millennial categories); of the proliferation of competitive options in the market. (Lobaugh et all., 2019) It is also well-known that Deloitte’s representatives demonstrated how income determines where people shop, and how income or financial position influences what people purchase. (Lacks Kaplan and Cornfeld, 2019) At the beginning of August this year the reputed American Marketing Association (AMA) recommended the newest eBook of Luth Research entitled “Macro and Micro Journeys: A Window into Consumer Shopping Decisions”, within the context of the trends driving today’s path to purchase (fragmentation of consumer attention, blurring lines between digital and physical, contentions between direct to consumer, mass retailers and the rise of content driven commerce vs. planned shopping). Made up of two distinct components (ZQ Macro Journey and ZQ Micro Journey), the so-called ZQ Macro Journey & Micro Journey analysis allows not only to both influence channel and market level players by using macro level insights, and to control micro level insights at retailer level or publisher level and different specific activities, but also to both examine and effect shoppers’ touchpoints (the behavioral patterns: of using the macro touchpoints; on a retailer website for a product category), and to measure the magnitude for each consumer activity (ZQ Macro Journey) and to quantify the magnitude of effect for each consumer activity (ZQ Micro Journey).

And with regard to these consumer shopping decisions it is also worth mentioning that: ▪ according to “The Future of Retail 2019” report of Walker Sands (based on data from a survey conducted in March this year among 1,600 consumers in the U.S.) consumers are buying fewer things because they have become more conscious of keeping a clean organized lifestyle; but they are also purchasing more big-ticket items online, and continuing to shop primarily in brick-andmortar stores for things like food and other daily necessities; (Nanji, 2019) ▪ as revealed in an article published on September 12 this year by SteelHouse (an AI-driven, selfservice advertising software company for brands of all sizes) shoppers’ excitement for Black Friday and Cyber Monday is dispersing into the rest of the week (Cyber Week), making them buying everything on their shopping lists (not only the gifts) considering this period of time as being the best to get a deal; ▪ as shown by eMarketer, social shopping is made fun and engaging by discovery (as is reasonable brands wanting to convert that excitement into action), (Kats, 2019) while after they click “buy now” shoppers expect almost immediate delivery (CX being reallt influenced by the delivery speed); (Koch, 2019)

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▪ according to the multi-phase study “The Great Divide” launched by Alliance Data’s Analytics & Insights Institute, “Digital First” consumers are more open to trying new technology and prefer to engage with brands over digital channels (via website, email, app, text, social, or online display ads), shopping online frequently, and tending to shop more frequently, their view of the store appearing to be very purpose-driven, convenience and ease being more important to them than other consumers (they don’t want a situation causing difficulty or trouble in store, which has to be as easy to shop as the site or app); ▪ results from a June 2019 study of Pymnts.com and LISNR revealed recently (August 2019) why US mobile app users (ages 18+) aren’t interested in downloading shopping apps: too many apps on their mobile device (46.3%), data security concern (34%), no features of interest (22,6%), unappealing coupons (18,8%), difficult to use (13,6%); and this while the most convincing features to download merchants’ apps were as follows: coupons or deals (87,6%), loyalty/rewards programs (79,7%), product search features (56,7%), reviews and ratings (44,9%), wish lists or registries (40,7%), lower fraud potential (36,1%), payment options (32,1%), product recommendations (25,2%). (Lipsman, 2019) And the last but not the least, as it is known that 96% of customers don’t buy an item on their first search or visit to a site (as confirmed recently by Mark Irvine, Director of Strategic Partnerships at search marketing company WordStream), marketers are challenged to also understand how these customers’ later decisions and journeys are influenced by ads. (Lacy, 2019) For instance, in order to help Amazon’s advertisers better understand the impact of their spend on consumer behavior the Internet giant is developing clean room technology (in a privacy-centric way, such a clean room allows platforms and brands to combine, analyze and attribute aggregated first-party data and platform-side audience data), as AdExchanger first reported.

Beyond “Amazonification of Commerce” Two years ago, while approaching the topic of “Amazonification of Commerce”, Bruce Tompkins, COO, MonarchFx, argued that: (Tompkins, 2017) “Amazon seems to know what to do and how to do it before it becomes clear to the market… Amazon continues to lead the marketplace with innovations, new approaches to sell products, and satisfy consumers. It is that relentless drive to satisfy and even exceed expectations that pushes them to the next good idea.

Amazon is also highly focused on their supply chain and rapid fulfillment of consumers’ orders…

Research indicates that Amazon has roughly 300 fulfillment operations with 39 more on the way.

This distribution network fuels their growth by giving today’s consumers what they want, when they want it. Amazon is utilizing the network effect to leverage supply chain assets to their fullest and get economies of scale no one company can match… Expect private label products to continue to be a focus for Amazon… Grocery is a major category for Amazon’s future. They will extend their reach in online grocery, using Whole Foods as a starting point for other grocery initiatives… As well as being a product company, Amazon is a technology company… We believe

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they will continue to push the boundaries of what is possible to optimize their supply chains, operations, and transportation, reducing the cost of service and delivery speed”...

As it was recently reconfirmed, Amazon has valid plans for the future, continuing to succeed in spite of the constant market change: • Amazon is continuing experimenting to attract social media influencers and their followers, see for instance Rihanna’s (Rihanna has 93 million Twitter followers) second Savage X Fenty lingerie show (streamed exclusively on Amazon Prime Video globally); (McLeester, 2019) on the other hand, it is also interesting to note that in July this year Abe Eshkenazi, the CEO of the Association for Supply Chain Management (ASCM), made reference to: Amazon’s annual global shopping extravaganza, Prime Day, a sales event (exclusive to Prime members) featuring lightning deals which last only until items sell out; Amazon’s human capital management policy with regard to help its workers gain new skills within the context in which the new technologies are transforming the workplace (citing an article written for “The Wall Street Journal”).

(Eshkenazi, 2019) • The e-commerce giant is supporting its growth by powering a smart revolution with regard to smart homes (in partnership with one of the largest home construction and real estate companies in the U.S., Lennar – using built-in smart home capabilities powered by Alexa, and showcasing a smart home experience through the intermediary of model homes outfitted with Alexa-activated technology), smart offices and smart buildings (with the help: of in 2017 launched Alexa for Business, and also of its cloud computing platform AWS; its partnership with the largest residential real estate services company in the US., Realogy – thanks to Amazon’s TurnKey initiative, a home buying program allowing using its smart home products and Amazon Home Services within this partnership). (CB Insights, 2019) With on Amazon site DIY tiny-home kits offered by sellers (capitalizing on the tiny-house movement), Amazon is also preparing to both venture into prefabrication and modular construction (by partnering with well-known investors), and to its future incursion into building actual homes.

Figure no. 2: Organizations can choose among thousands of Alexa “skills” Source: It’s Not Just Your Smart Speaker. How Amazon Is Coming For The $50T+ Commercial and Residential Real Estate Industries, CB Insights, August 29, 2019 (work cited)

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• Amazon (whose involvement in financial services it is well-known, see the figure below) is intending to launch in the coming months a biometric payment method to Whole Foods (for the beginning at a few stores), the use of this technology tested currently internally opening the perspective of bundling the hand-scanning payment method with Omni channel sales management tools, which could impact on consumers’ conviction of starting using biometric payments (as consumers are shopping for groceries regularly), of course bringing clarity with regard to data privacy and security. (Keyes, 2019)

Figure no. 3: Amazon in financial services Source: Amazon, TechCrunch, cited by Keyes, D. (2019). Amazon is planning to bring a biometric payment method to Whole Foods, Business Insider Intelligence, Sep. 5 (work cited)

Walmart’s Omni channel push while taking redundant costs out of the system by integrating its supply chain and finance teams for walmart.com and its stores In full battle with Amazon, Walmart is continuing improving its performance online and in stores, confirming its struggling to ensure their customers one seamless CX, context in which RetailWire launched recently a very challenging question for the traditional debate: “Will Walmart have more success creating consumer direct brands than acquiring them?” (Anderson, 2019) Within this framework, Walmart’s focus to developing its own digitally native brands (by turning away from looking for acquisitions, within its well-known history: Bonobos, Jet.com, ModCloth, Eloquii etc.) was underlined from the very beginning, being cited not only Mr. Marc Lore, the person responsible for leading Walmart’s e-commerce operations in the U.S. (who made reference in an interview with Recode to the success of the mattress brand “Allswell” created by Walmart to compete in the bed-in-the-box category), but also Walmart’s CEO Doug McMillon (who wrote in an employee memo about Walmart’s strategy). Significant comments were made within this RetailWire’s debate, including supporting the idea of creating consumer direct brands: Walmart’s private label ambitions will be made successful by the mix of value and quality, considering the benefits reaped by its digital native brands acquisition spree (according

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to Brandon Rael, Director, Alvarez & Marsal); winning retailers will shift among the strategies of buying, building or bridging (retail’s central question) when it makes sense (Carol Spieckerman, President, Spieckerman Retail); the out-brand idea testing by Walmart it was a valid attempt, being a valuable learning (Lee Peterson, EVP Thought Leadership, Marketing, WD Partners).

The Expansion of the Direct To Consumer Retail There is no doubt about the companies’ need to integrate the transactional data from all their channels in order to improve the end-to-end customer journey, a significant role within this framework being played also by the direct and authentic engagement with their customers through the intermediary of the DTC model as part of the revenue mix, knowing that engaging with consumers on an ongoing basis being necessary no matter if companies are investing in Direct To Consumer (DTC or D2C) or not. We are witnessing an expansion of the companies’ DTC channels, of the brands planning to open their own retail shops and invest in their mobile and e-commerce sites, this direct sales strategy becoming critical taking into account not only that consumers are demanding a better CX, but also the double opportunity of building a better brand relationship with customers, and of collecting customer data using this way. (Hopwood, 2019) On the other hand, this is also an opportunity for a startup D2C brand (considering the relatively low barriers to enter the market), but it is crucial to have a good strategy in place (considering the competition against the retail giants). And in order to get started in D2C it is recommendable, for example, to: identify an everyday item, making it affordable; focus the product and marketing efforts on customer’s pain points; develop a subscription-based model; simplify choice; take a content-first approach, then ask customers to make content; offer easy, no-fee returns; make use of celebrity influencers; incentivize your customers to spread the word; create a viral video; create a virtualize experience; use micro influencers; implement an aggressive SEO campaign; disrupt social media with infographics and memes; deliver on endto-end CX; start or join a community; Facebook marketing; Instagram and YouTube ads; utilize fulfillment companies; go headless and reach consumers everywhere. (Core dna, 2019) Very recently, CB Insights analyzed some of the biggest D2C success stories and concluded with regard to the future of retail that despite the continuous dominance over traditional retail by Amazon, Facebook and Google, there is still an open playing field for entrepreneurs (such as: Casper, Bonobos, Harry’s, Allbirds, BarkBox, Chubbies, Bombas, Glossier, The Honest Company, Soylent, Dollar Shave Club, Warby Parker, MVMT, Everlane, ) with ideas for products (and ready to build new, powerful retail brands) wanted to be used by people. CB Insights showed, among other aspects, how D2C companies (which manufacture and ship their products directly to buyers) sell their products at lower costs than traditional consumer brands (maintaining end-to-end control over the making, marketing, and distribution of their products), open pop-up shops by partnering with physical retailers, rethinking both the product, and the retail model (CB Insights identified four broad areas of this rethinking approach: in design, how they launch, the build CX, and the way of marketing themselves).

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Better Understanding Merchandising Within the “Idea to Doorstep” Process A FitForCommerce Report – entitled “FROM IDEA TO DOORSTEP 2019: Everything you need to know to achieve digital commerce success. Retrieved from FitForCommerceReport-From_Idea_to_Doorstep-2019” – highlighted the need of traditional retail to both improve use of data, and to put a greater focus on connecting and blending in-store and digital experiences, considering that the so-called “Idea to Doorstep” process (see the figure below) is no longer linear, like the path-to-purchase. FitForCommerce recommends traditional retailers to both introduce new digital in-store technologies bridging online and in-store shopping experiences, and to provide better training and tools for store associates (so as to ensure better and more personalized customer assistance, enhancing the shopping experience, engaging and guiding shoppers by using customer data insights, inventory visibility, and access to merchandising content), meeting this way today’s digitally-savvy shoppers’ expectations. Within this framework they also insisted on other aspects such as retailers’ need: of reducing shopper frustration with line busting (waiting in long lines being known as the biggest frustration with shopping in physical retail stores): Self-checkout, Mobile POS, Pre-order online, Scan & Go (Amazon Go), Pay in App; of driving traffic to stores and elevate in-store experiences by better understanding how their customers are using mobile devices (looking up info, comparing pricing, checking reviews, getting advice from friends etc.), building programs accordingly (including by going beyond digital signage, touchscreens, kiosks etc. and trying to experiment with interactive and intelligent mirrors, digital pricing, robots, and VR/AR applications).

Figure no. 3: FROM IDEA TO DOORSTEP process Source: FROM IDEA TO DOORSTEP 2019: Everything you need to know to achieve digital commerce success. Retrieved from FitForCommerce-Report-From_Idea_to_Doorstep-2019 (work cited)

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From the very beginning this significant FitForCommerce Report attracted the attention, among other aspects, on retailers’ need of identifying the right tools (Product Assortment Management, Product Content Management, Advanced Analytics Platforms, Catalog Management / Taxonomy, Searchandising, Product Recommendations, Algorithm-Driven Recommendations, E-Gifting, Competitive Pricing & Promotions, Price Optimization) to optimize their merchandising, of how to develop a differentiated merchandising strategy, and of how can data help inform their merchandising strategy.

Instead of Conclusions Last year in March we noted that according to Deloitte, retailers are facing the so-called “the great retail bifurcation”, they needing to focus on either the luxury end of the market or on the bargain-basement end in order to succeed (because being in the middle means falling away).

And as underlined by the Swinburne University of Technology’s representatives: “Arguably, the discount and premium retailers having success also happen to be stores, brands and categories more resistant to what’s going on in e-commerce”. (Pallant and Sands, 2019) In Deloitte’s view, that change in the retail market is not the retail apocalypse: “it is instead a renaissance—driven by huge shifts in economics, competition, and consumer access to options, all fueled by exponential advancement in technology. And in this renaissance, the winners appear to be those retailers that can capitalize on consumers’ experiences of their economic well-being—or lack thereof—to offer a value proposition that aligns with consumer needs”. (Lobaugh et all., 2018) In the last two years, we showed among other aspects: how Amazon is putting more pressure on traditional retail than ever, how retailers are focusing on improving their stores’ merchandising, their stores’ value proposition, enhancing Omni channel CX, preventing friction in their customers’ journey, making distinction between the initial consideration and the final consideration, having actionable data (pre-store, in-store, and post-store); (Purcarea, 2017) the evolution of better understanding, for instance, the reasons to implement AI-backed conversational commerce into the retail strategy, the need of further reinvention and modernizing of the retail business by new technologies, and the powerful link between emotion and CX and loyalty; (Purcarea, 2018) retailers’ challenge of considering both marketing’s hidden treasure of CPG companies, and the entrance of Amazon into grocers’ industry and its true technological battle with Walmart, and retailers’ imperative of creating a digitally connected environment, including by seeing shoppers as “Blue Dot” consumers, empowering both employees and customers, and continuously improving retailers’ capabilities associated with customer engagement and their predictive and intelligent marketing capabilities; (Purcarea, 2018) how significant is the smartphones’ role in improving the retail CX is rising within the constant disruption and transformation, retailers recognizing their need for harmonizing the digital environment with the in-store environment is clearly, improving the shopping experience accordingly, and ensuring this way the retail renaissance, including by considering mobile and artificial intelligence as disruptive forces in retail, and also taking into account the renewed interest in retail apps; (Purcarea, 2018) how retailers are rethinking CX within the new

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imperative for customer obsession, within the context in which digital transformation, new shopping behaviors and values, Omni experience, in-store personalization, and retail’s convergence are some of the current topics in retailers’ discussion; (Purcarea, 2019) how retailers need to look carefully at Amazon’s involvement in U.S. grocery ecommerce’s fierce competition with Walmart, Kroger etc., a competition which stimulates the innovation, and how necessary is for retailers to prepare for the impact of automation and AI technologies across all core functions, taking into account the workforce implications and the shopping tendencies defined by generational gaps, the shopper behavior being reinvented by the digital revolution, and context in which the next-generation retail merchandising will be driven by analytics and digital. (Purcarea, 2019) All these aspects mentioned above made us recall: ● another question launched at the end of July this year within the traditional RetailWire’s debate: “Has Amazon ‘destroyed the retail industry’ in the U.S.?” Some comments drew our attention: the retail industry is pushed by Amazon in new directions, retailers being caused to compete accordingly (according to Mark Ryski, Founder, CEO & Author, HeadCount Corporation); compared to Amazon’s stake in the U.S. market Alibaba has a much more significant hold on the Chinese retail economy… “the retail competitive landscape is alive and well, with Walmart going head to head with Amazon, retailers evolving and adapting, along with DTC brands opening physical showrooms at a record rate” (Brandon Rael, Strategy & Operations Leader, Retail Strategist, Trusted Advisor); “Competitors do not put companies out of business, customers do” (Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph’s University); “Retail is about birth, life, death and compost.

The biggest threat to modern retail has been the distance between the decision makers and the changing customer…” (Paco Underhill, CEO of Envirosell Inc., Speaker, NY Times BestSelling Author). (Anderson, 2019) ● the recommendations made at the end of July 2019 by McKinsey’s representatives (on the basis on their analysis of 2018 data) with regard to the actions retailers should take for this year’s holiday season if they want to drive sales increases and be competitive with Amazon, by starting in advance with a laser focus on digital execution: to focus on Black Friday for holiday planning; to plan for a strong and sustained holiday strategy which starts earlier in November and extends through December; to raise the bar on convenient shipping and fulfillment; to ensure perfect execution. (Huang et all., 2019) Allow us finally to express the opinion that retailers (and not only) also need to think about the well-known quote of Henry Ford: “If I had asked people what they wanted, they would have said faster horses”.

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Pallant, J. and Sands, S. (2019). “Death of the department store: don’t just blame the internet, it’s the dwindling middle class”, The Marketing Journal, August 7. Retrieved from http://www.marketingjournal.org/death-of-thedepartment-store-dont-just-blame-the-internet-its-the-dwindling-middle-class-jason-pallant-and-sean-sands/ Purcarea, T. (2017). Competing, Connecting, and Winning in Today’s Distribution and Merchandising, Romanian Distribution Committee Magazine, Volume 8, Issue 4, December, pp. 30-39 Purcarea, T. (2018). Conversational Commerce, New Marketing Tactics, CX, Loyalty and Emotions, Romanian Distribution Committee Magazine, Volume 9, Issue 1, March, pp. 30-39 Purcarea, T. (2018). Retail digital marketing strategies, Romanian Distribution Committee Magazine, Volume 9, Issue 2, June, pp. 30-40 Purcarea, T. (2018). The Future of Retail Impacted by the Smart Phygital Era, Romanian Distribution Committee Magazine, Volume 9, Issue 3, September, pp. 34-46 Purcarea, T. (2019). Retailers’ Current Topics in Discussion, Romanian Distribution Committee Magazine, Volume 10, Issue 1, March, pp. 38-46 Purcarea, T. (2019). Retailers’ Reinvention in Harmony with the Shopping Tendencies, Romanian Distribution Committee Magazine, Volume 10, Issue 2, June, pp. 36-46 Schembri, K. (2019). The Top 10 Tips for Optimizing Your Marketing Strategy this Back to School Season, ForwardPMX, July 17. Retrieved from https://www.forwardpmx.com/insights/blog/the-top-10-tips-for-optimizingyour-marketing-strategy-this-back-to-school-season/ Selbie, M. (2019). Low Operating Standards Causes High Retail Defection, Customer Experience Update, Sep 7.

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Tompkins, B. (2017). Amazonification of Commerce, MonarchFx. Retrieved from https://www.monarchfxgo.com/Insight/Articles/Amazonification-of-Commerce *** New Report Reveals Significant Changes in Consumer Shopping Trends, iVend Retail, New York, February 19, 2019. Retrieved from https://ivend.com/new-report-reveals-significant-changes-in-consumer-shopping-trends/ *** Early Start to a Promising Back-to-School Shopping Season. Increasing Use of Click-and-Collect Benefits OmniChannel Retailers, ICSC, Industry Insights, Consumer Series, August 5, 2019. Retrieved from https://www.icsc.com/uploads/t07-subpage/Back_To_School_2019_Consumer_Series.pdf *** Auchan te invită la un mega eveniment Back to School! 4.09.2019. Retrieved from https://romania.auchan.ro/auchan-te-invita-la-un-mega-eveniment-back-to-school/ *** Macro and Micro Journeys: A Window into Consumer Shopping Decisions, Luth Research, AMA, August 5, 2019. Retrieved from https://www.ama.org/2019/08/05/macro-and-micro-journeysa-window-into-consumershopping-decisions/ *** MacroMicroJourney_ebook-062519_final *** Beyond Black Friday: How to Build Revenue-Driving Holiday Campaigns, SteelHouse, September 12, 2019.

Retrieved from https://www.marketingprofs.com/articles/2019/41807/beyond-black-friday-how-to-buildrevenue-driving-holiday-campaigns? *** What it means to be Digital First. Connecting to the Digital First consumer and their changing needs, Digital First_AllianceData, August 22, 2019. Retrieved from https://knowmoresellmore.com/insights-news/what-itmeans-be-digital-first *** It’s Not Just Your Smart Speaker. How Amazon Is Coming For The $50T+ Commercial and Residential Real Estate Industries, CB Insights, August 29, 2019. Retrieved from https://www.cbinsights.com/research/amazonreal-estate/? *** Direct-to-Consumer (D2C): 21 Ways to Get Started in 2019, Core dna, Dennis, eCommerce, Sep 10, 2019.

Retrieved from https://www.coredna.com/blogs/direct-to-consumer *** We Analyzed 14 Of The Biggest Direct-to-Consumer Success Stories To Figure Out The Secrets To Their Growth — Here’s What We Learned, CB Insights, September 19, 2019. Retrieved from https://www.cbinsights.com/research/direct-to-consumer-retail-strategies/? *** FROM IDEA TO DOORSTEP 2019: Everything you need to know to achieve digital commerce success. Retrieved from FitForCommerce-Report-From_Idea_to_Doorstep-2019

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APREC China, Global Coordination, Innovation by EuroShop, Changing India, Entrepreneurial Spirit, Globalization/Standardization, Research Alliance Bernd HALLIER

Prof. Dr. Bernd Hallier, President of the European Retail Academy (ERA: http://www.european-retailacademy.org/), an Honorary Member of the Romanian Distribution Committee, and distinguished Member of the Editorial Board of “Romanian Distribution Committee Magazine” attracted our attention on great events happening in the second quarter 2019, 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 Romanian-American 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”.

APREC China The very first root of APREC is an exhibition and conference in 1983 in Tokyo/Japan an activity which was graced by the Japanese Prime Minister Nakasone and by this also got its political high level reputation. The intention is a bi-annual event to promote the

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modern/organized retail-industry as a sector across Asia Pacific and which therefore is rotating among its various national retailers associations.

China was host first in 2005 in Beijing and now for a second turn in 2019 in Chongqing an agglomeration of 31 million inhabitants. The international Asian Pacific network was awarded at this occasion by the Peace Circle Chair Collection Certificate of the Chinese Government. More than 4.000 business people visited the Conference with speakers of all big Chinese players. In the Closing Ceremony the APREC-flag was handed over for the 2021 Congress to Indonesia.

Global Coordination At the second International Two-dimensional Code Industry Development Summit in Foshan/China Prof. Dr. Bernd Hallier was elected to become a member of the Preparatory Committee for the Summit 2020 with the agenda to establish a permanent global Coordination Organization (see also www.european-retail-academy.org/TUN).

According to Professor Hallier in future the creation of new products will have to be based on the knowledge/wisdom that only globally standardized codes for product-innovations will enable marketing to enter the new world of the Internet of Things (IoT) and massconsumption. Asia with its IT-driven young society is setting the frame for this development.

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Innovation by EuroShop According to Prof. Dr. Bernd Hallier the exhibition EuroShop, founded in Germany in 1966 and todayâ&#x20AC;&#x2122;s world-leader of shop fitting/retail technology/POS-marketing, is a permanent innovation driver of retail but also in a change itself by innovation, segmentation and globalization.

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EuroCIS, founded in Germany in 1997 as an annual congress in-between the tri-annual EuroShop in response to the speed of technology innovations is meanwhile Europeâ&#x20AC;&#x2122;s number one retail technology exhibition; the exhibition space of C star in Shanghai/China can be compared with the size of EuroCIS; and the in-store-asia/Mumbai is the largest retail trade fair on the Indian Sub-Continent.

Changing India According to market estimates the organized retail in India will grow by 76 percent uptill 2021. Within Euromonitor International's Top 100 Retailers Asia: Walmart is leading India's ranking by 14,5 billion US $ turnover with Amazon (9,8) second placed, the Future Group (3,9), the Reliance Group (3,7) and the Tata Group (2,9). Just at the moment Amazon shows interest to buy about 10 percent of the shares of the Future Group.

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For many years Prof.Dr.B.Hallier supported the Indian Retail Forum in Mumbai, meeting his friends Kishore Biyani and Nagesh (Link). For long years of advice Prof.Dr.Hallier got the Retail Leadership Award from the Asia-Africa-GCC Congress. Nowadays Mumbai’s exhibition in-store-asia is connected with the EuroShop network.

Entrepreneurial Spirit In 2018 the World Congress of Entrepreneurs signed the “Zagreb-Declaration” in Croatia as a call to encourage the civil society to participate actively in a social market economy. The meeting was backed by business, universities and administrations from the local, regional and national levels of the area of former Yugoslavia plus Austria and Germany.

This initiative will be carried on from October 16th-18th, 2019 at Skopje/Northern Macedonia. “The development and transfer of entrepreneurial skills is a challenge for applied sciences in areas of former socialism” Prof. Dr. Bernd Hallier stated “The wealth of the nations is the accumulation of permanent/ongoing innovations: this can be optimized by cooperation between governments/laws, sciences and businesses” (more info: sinisha.zaric@gmail.com).

Globalization/Standardization Globalization needs Standardization: also in the field of barcodes. While in the mid 70ies the printed barcode was the innovation driver for the cash-zone and between retail and industry,

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in the second step Chips increased the data-volume and reading distance. The third generation are now QR or two dimensional Codes being used both in-store and for mobile shopping while connecting both: brick-and-stone and the digital world. QR enables the Internet of Things.

The International Two-dimensional Code Industry will organize its second Development Summit with the 2019 topic “The Code’ Connected World with Intelligence and Innovation” in Foshan, Guangzhou Province/China. Prof. Dr. Bernd Hallier will be guest of the Conference and speak about technology drivers of retail.

Research Alliance Euromonitor International is a British company for global market intelligence with offices around the world. On invitation of its new Duesseldorf office/Germany Prof. Dr. Bernd Hallier presented his latest research about trade-cycles in the past and future.

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Both sides know each other for many years cooperating with the Singapore magazine Retail Asia (Steven Goh/Andrew Yeo) in the presentation of the Top 500 retailers Asia Pacific.

Prof.Hallier served for more than a decade in the Award Jury - for which Michelle Grant (Euromonitor) prepared the research data. Both will meet at APREC in September in Chonging / China again.

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Léon F. WEGNEZ (by courtesy of) -“Meeting the Expectations of Shoppers in Terms of Shopping Pleasure”, “Distribution d’Aujourd’hui”, Mars-Avril 2016, Brussels. Sharing with our distinguished Readers a well-known source of usable and useful knowledge… Prof. Dr. h. c. Léon F. WEGNEZ is an Honorary Member of the Romanian Distribution Committee, and distinguished Member of the Editorial Board of our “Romanian Distribution Committee Magazine“. The distinguished Léon F. WEGNEZ was honored by the European Retail Academy (ERA) as the 2015 “Man of the Year”. 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”, Brussels.

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● Romanian Wedding – September 1, 2019 – in Braşov

Note from the Editor-in-Chief As we are all very connected to our traditions which define our spirit, we feel a great joy in participating at a wedding reception, celebrating the marriage ceremony, being delighted and remembering the special occasion.

And as all wedding receptions are unique, it is our honor and pleasure to leave some comments on a wedding reception reconfirming our beloved traditions.

All the participants were really impressed by the unique aesthetic value of the Romanian music so rich in nuances, by the inspiring and magnetizing traditional folk dance…

It was also a reconfirmation that a memorable event is the most valuable experience.

It was so gratifying to participate in the joy of the young spouses, wishing them good luck!

Human life is beautiful and deserves to be protected!

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Nuntă la Români Colegul nostru Dr. Nicolae Albu (http://www.crd-aida.ro/ourteam/nicolae-albu/ ) a trăit recent un moment înălţător: a devenit Tată socru. Domnia Sa ne-a obişnuit cu armonia dintre gând, cuvânt şi faptă, cu dragostea sa pentru tradiţiile strămoşeşti, preţuind valorile culturii populare milenare, împătimit de frumos și autentic… Urarea “Cale albă şi noroc” – pentru tinerii care privesc în aceeaşi direcţie, devenind perechea potrivită, confirmând tradiţionala conduită transmisă de la o generaţie la alta – este cunoscută. Glăsuia George Coşbuc în “Nunta Zamfirei”: “Şi-n vremea cât s-au cununat/ S-a-ntins poporul adunat…”

“Balada” (compusă de Ciprian Porumbescu la 27 de ani), Rapsodia Română (George Enescu a compus ambele Rapsodii la 20 de ani) şi “Ciocârlia” (inclusă de George Enescu în Rapsodia Română) – în interpretarea profesioniştilor recunoscuţi ai zonei – au încântat de la bun început “poporul adunat”, înălţând sufletele nuntaşilor către tot ce este bun, drept şi frumos… Ioan Bocşa, Sergiu Cipariu şi Dumitru Dobrican au bucurat inimile celor prezenţi cu farmecul veşnic al muzicii, cântului şi jocului ca părţi organice ale existenţei noastre … Reflectarea spiritului şi a trăirilor a continuat cu dansul popular al profesioniştilor zonei…

Nuntaşii şi-au împărtăşit şi ei stările sufleteşti (Horă, Sârbă, Braşoveanca…), dând expresie naturii umane, reconfirmându-l pe Coşbuc… “A fost atâta chiu şi cânt”…

Gândurile noastre au “zburat” (http://www.crdaida.ro/2018/08/dumitru-farcas-isi-continua-zborul-spre-nemarginire/ ) şi spre cei pe care continuăm să-i simţim alături de noi, cu sensibilitatea şi căldura sufletească cunoscute şi recunoscute ale acestora despre tradiţii şi credința românilor care au făcut Unirea.

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