OPERATIONS

Report: Recurring revenue adoption to continue in 2014

BY Dan Berthiaume

San Francisco — The trend of companies adopting recurring revenue surged in 2013, with brand names using new billing and pricing models to grow sales and deepen customer loyalty. Recurring revenue technology provider Aria Systems projects this surge will continue in 2014 as more companies adopt recurring revenue models because of their flexibility and convenience for customers.

According to data from Incyte Group, nearly half (47%) of U.S. businesses have adopted or are weighing adoption of recurring revenue models. Aria Systems predicts this will force new innovations that could include food producers bypassing grocery stores to sell directly to consumers on a subscription basis, as well as “pay as you go” options for appliances and automobiles, subscriptions to auto-based digital services, and pharmaceutical companies selling allergy medications directly to consumers on a monthly basis. The cloud will assume an even more pivotal role in the area of recurring revenue as new service brokers emerge to help companies monetize services ranging from providing movies to music to obtaining credit scores.

“Businesses large and small, across many sectors, are adopting the flexibility of recurring revenue,” said Tom Dibble, president and CEO, Aria Systems. “It’s not a fad anymore; it’s the new way to do business.”

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Starbucks shakes up executive roles

BY Dan Berthiaume

Seattle — Starbucks Coffee Company has announced a new leadership structure that it says positions the company to leverage its assets and operations, and gain maximum benefit from the retail, consumer, mobile and digital shifts currently underway in the global marketplace. Most significantly, Starbucks chairman, president and CEO Howard Schultz will expand his focus on innovation in coffee, tea and the Starbucks Experience, as well as next generation retailing and payments initiatives in the areas of digital, mobile, card, loyalty and e-commerce to position Starbucks for its next wave of global growth.

Schultz will work in partnership with the Starbucks senior leadership team, including chief digital officer Adam Brotman and chief strategy officer Matt Ryan.

In addition, building on his 22 years of experience at Starbucks, former CFO and group president of global business services Troy Alstead will be promoted to the newly created position of COO, responsible for overseeing the day-to-day operations of the enterprise. Starbucks senior VP of corporate finance, Scott Maw, will be promoted to executive VP and CFO. Craig Russell, Starbucks voice and advocate for coffee, will be promoted to executive VP, Global Coffee.

“These organizational moves map our internal talent to the rapidly evolving retail environment and significant strategic and market opportunities ahead of us,” said Schultz. “Each of these experienced Starbucks leaders will be working closely with the entire senior leadership team, and me, to bring even greater financial and operational discipline to our business around the world. They will partner with me as I focus on Starbucks mission, growth initiatives and the convergence and integration of our retail and e-commerce, digital, card and mobile assets around the world. There has never been a more exciting time to be a Starbucks partner.”

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Sears Canada to cut 600 more jobs

BY Dan Berthiaume

Toronto – Sears Canada, which laid off more than 1,300 employees on Jan. 15, is cutting an additional 624 jobs. In a press release, the retailer said it is modifying its store structure to improve efficiency and increase the effectiveness of the chain of communication between management and the store associate teams within the stores.

Sears Canada will eliminate primarily a mid-tier level of leads within its full-line stores, resulting in an average reduction of five associates per store. There will also be an alignment of the regional and head office structures to reflect the new store model, and also to improve efficiency in Sears other formats and to align with the size of the business. This will result in a staff reduction of 624 associates.

“The changes we are making in stores will not affect the number of front-line associates, and service to our customers will not be impacted,” said Doug Campbell, president and CEO, Sears Canada Inc. “Our current structure results in inefficiencies and barriers to effective communication among store associates and the changes we are making are designed to result in better store execution and consistency of presentation and standards. We continue to plan for the future of Sears Canada and are taking steps today that will allow us to continue serving customers as a viable national retailer coast to coast in stores and through our direct channel now and in the future.”

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