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New Retail: convenience over data privacy?

Retail is evolving to adapt to consumers’ expectations, and that often means bringing digital elements into their stores. Digitizing the customer experience indeed seems to be the key to offer the “three C’s” to consumers: customer centricity, convenience, and customization. 

In China, New Retail has proven that modern technologies and data can enable merchants to be cost-effective and profitable and allow customers to benefit from a convenient experience. If you are not familiar with what New Retail is yet, have a peek at my article What is New Retail and why is it thriving in China?

New Retail is not proper to China, however, the Chinese environment is prone to its evolution and adoption. 

Why? One of the reasons is that Chinese retailers have access to a large pool of data about their customers. The Chinese consumer journey is data-driven, which allows retailers to adapt their strategy to their customers and innovate.

However, this model cannot exactly be copied -yet- in Western countries, for several reasons. 

The first one is the different regulations: in Europe for instance, the GDPR rules users’ privacy quite strictly. However, in China, even though some laws have recently emerged, the legal environment seems to be more vague and permissive.

Then, these regulations have impacted the Western retail landscape. If super apps exist in China, it would be virtually impossible to build an equivalent in the West. Even though some companies have enlarged their scope of services like Google or Amazon, they can still not compare to the Chinese super apps that offer everything – literally everything – in a unique app.

Then, consumers’ mentalities are quite different too. While data privacy seems to be an alien concept for Chinese, their Western counterparts are becoming increasingly concerned about it.

Data privacy: China vs West

In the context of my work on New Retail, I conducted interviews among French consumers. On that occasion, I have been able to collect their insights and opinions about data privacy with retailers. I wanted to see if their opinion would be similar to the one found in the study of PwC (2018).

Many of the respondents said that they did not want to give information that was “too personal” to retailers, such as a picture of themselves or a phone number. However, some of them still affirmed that if it was necessary to provide this type of information to get the desired product, they would do it, because they are ready to trade data privacy against some products or services.

On the contrary, to my surprise, numerous interviewees did not seem scared or unwilling to share personal information with retailers. Almost half of the respondents asserted that they would have no problems with using technologies such as facial recognition. They would be ready to use these technologies if it could make their journey faster and smoother. They would trade their data for convenience: the value of a journey no longer only lies in the products, but in the way a retailer shapes the in-store experience.

The results of these interviews lead me to believe that if Western retailers want to invite consumers to give more of their personal data, they should do two things:

Reassure consumers on the way their data will be handled

Many interviewees expressed their concerns about the misuse of their data. They do not want to be spammed or hacked and expect retailers to take great care of their private information. Some of the respondents claimed that if they were told their data would be protected and not sold to a third party, they”d be willing to cooperate.

Showcase how the use of data can benefit the customers

Consumers want compensation for the data they share. They want retailers to prove that giving more data can enhance their experience. If the tradeoff is convincing enough, then, sharing personal information will not be seen as an obstacle, but rather like a positive contribution to their experience.

Will the West follow China’s lead? Will it make data privacy an alien concept or will it resist the data revolution? Only the future will tell!

By sophie.monteil

MBA student in Business in Digital Marketing in Shanghai, I believe in self-improvement through knowledge, experience and interaction.

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