As two of Germany’s leading department store groups lose their footing (in March Peek & Cloppenburg filed for insolvency and Galeria Karstadt Kaufhof announced it will close down 52 of its 129 stores), Dr. Renata Thiébaut, a professor of e-commerce at GISMA University for Applied Sciences in Potsdam, suggest retailers should look East and to China in particular for cues around privacy to strengthen their competitiveness
Aldi was a latecomer to the Chinese market compared to its German counterpart Metro and other players such as Costco and Auchan, but its business concept of using a pure e-commerce strategy first in testing, then completing full expansion through physical retail with concise cashierless stores was groundbreaking. In Aldi’s case, an integrated system heavily based on various data analytics approaches was crucial to its success.
Thanks to the implementation of a SaaS system that collects data across various sales and social media channels to fully understand these needs, the company was able to streamline production and focus on product launches based on consumer needs – probably unthinkable in Europe. The social and political conditions are – without judging – simply very different. In China, it has been completely normal for a long time to collect a large amount of data in order to be able to act digitally in the best possible way—both positively and negatively from a Western perspective. Europe is much stricter about the high value of privacy. In this case, of course, that also has an impact on economic success. Each society must ultimately decide for itself which priorities it prefers.
Asia and Europe: societies tick differently
Social factors also play a role here. In China, it has been completely normal for years to handle many processes digitally. New technologies that are often held back in Germany by data protection concerns, such as payment by facial recognition or fingerprint, are already widespread and established in Asia.
Whether we have some catching up to do here and whether we want to pay this price of the “transparent customer” at the expense of technology is a question that each society must settle for itself.
However, there are certain ways to encourage consumer interaction through live commerce and metaverse commerce—both booming industries in China—while also addressing consumer protection.
