Blog | From Data Collection to Data Security: Balancing Growth and Compliance in Retail

The third masterclass of What’s in-Store for Retail Media Networks began with Chris Riegel, CEO and Founder of STRATACACHE introducing the impressive panel of experts: Dara Kossok-Spieß from the German Retail Federation, Janek Kuberzig from Wirtschaft (BVDW, representing over 600 members in the digital economy), and Dr. Jürgen Hartung, a partner specializing in IT law and data protection at the law firm Openhoff. 

This masterclass discussion addressed the evolving landscape of digital innovation, focusing on how businesses—particularly those in retail—can leverage data for growth while adhering to strict legal frameworks such as the General Data Protection Regulation (GDPR) and the upcoming AI Act.

The conversation spanned several pressing topics, including the challenges that small and medium-sized enterprises (SMEs) face in navigating increasingly stringent data protection laws, the distinction between data tracking online and in physical environments, and the importance of building customer trust through transparency. The panelists also delved into the future of retail, considering the potential and risks of personalization, AI-driven technologies, and voice commerce.

This summary outlines the key points discussed, offering insights into how businesses can stay competitive in the digital era while adhering to compliance mandates and safeguarding customer relationships.

Key topics covered within the discussion include:

Data Collection and Regulation:

The panel acknowledged the increasing difficulty of balancing innovation and regulation in the digital economy. Dr. Jürgen Hartung emphasized how data protection laws like the GDPR are often written in broad, generic terms that leave room for interpretation. This verbal ambiguity creates a “gray area” that confuses businesses. For example, concepts like « legitimate interests » and « personal data » are not always clear, making it difficult for companies to know what they can and cannot do with the data they collect.

This uncertainty particularly affects small and medium-sized enterprises (SMEs), who lack the resources of larger corporations to navigate the increasingly complex legal landscape. Dara noted that while large corporations like Amazon can afford teams of lawyers to ensure compliance, SMEs are often left struggling.

Online vs. In-Store Data Tracking:

The panel also discussed the differences between online and in-store data tracking. Janek Kuberzig pointed out that customers tend to feel more observed in physical spaces, like retail stores with security cameras, compared to online tracking, which is less visible. He described how walking through a store under the gaze of cameras makes customers feel watched, whereas online, they often click consent buttons without fully understanding the extent of tracking.

Jürgen argued that the same legal principles should apply to both environments, but the implementation varies. He gave the example of cookie banners online, which users have grown accustomed to, compared to the more obvious and potentially intrusive use of cameras in stores. To avoid customer discomfort, Janek suggested that retailers focus on transparency and communication about how and why data is being collected.

The Importance of Transparency and Trust:

Building trust through transparency was a key theme. Both Janek and Jürgen stressed that while legal consent mechanisms, such as cookie banners, provide a form of compliance, they do not equate to true understanding by customers. Jürgen suggested that consumers should be better informed about how their data is used, noting that most people don’t fully comprehend the complexity of data tracking. He stated, “It’s not real consent because the details are just too complex to really understand.”

Janek added that retailers should be more communicative with customers, explaining not just what data is being tracked but also how it benefits them. He offered the example of telling customers that their data is being used to improve store layouts or product placement, which could enhance their shopping experience.

Purposeful Data Use:

Dara and Janek both stressed the need for purposeful data collection. Dara pointed out that many retailers, especially smaller ones, collect vast amounts of data without a clear plan on how to use it, rendering it useless. “Data for data’s worth is worth nothing,” she said, emphasizing the importance of having a clear strategy before collecting data​.

Janek expanded on this by discussing how anonymized data could often be more useful than individualized data. For example, in grocery stores, understanding the behavior of customer groups (such as families or elderly shoppers) could be more valuable for improving store efficiency than tracking the shopping habits of individual customers. By focusing on group behaviors, retailers can optimize layouts, product placement, and customer service without infringing on personal privacy​.

The Role of Regulation in Innovation:

One of the most contentious points in the discussion was the role of European regulation, particularly GDPR and the upcoming AI Act, in hindering innovation. Jürgen Hartung argued that while regulation is necessary, the sheer volume of laws introduced in the last decade—ranging from GDPR to the Digital Services Act (DSA) and the Digital Markets Act (DMA)—has created a complicated legal environment that stifles innovation, particularly for SMEs.

Dara agreed, noting that the rapid succession of regulations has overwhelmed businesses. Since 2020, she has seen over a dozen major regulatory packages introduced, making it difficult for companies to keep up. However, she distinguished this from the idea that regulation itself is the problem, arguing that it is the pace and complexity of the rules that are stifling innovation, rather than the existence of regulation per se​.

The Future of Personalization and AI:

The panel discussed the future of AI in retail, particularly around personalization. Dara suggested that voice commerce and tools like ChatGPT are going to revolutionize retail in the next few years by providing better personalization. She predicted that personalization would become a competitive advantage for retailers, allowing them to create stronger connections with their customers and reduce returns through more tailored recommendations​.

However, the group was cautious about the risks of over-personalization. Janek warned against creating a « Minority Report » scenario, where hyper-targeted advertising becomes invasive. Both he and Jürgen emphasized the importance of balance, ensuring that personalization benefits the customer without crossing ethical lines​

Ultimately, the panel discussion underscored the challenges businesses face in balancing data collection for growth with the need for compliance and customer trust. Regulation, particularly in Europe, plays a critical role in protecting consumer privacy, but the complexity and speed of new laws—especially for SMEs—pose significant challenges to innovation. The success of retailers in the next decade will depend on their ability to strike this delicate balance between innovation, compliance, and consumer trust.

You can watch the masterclass here. You can access all of the masterclasses of What’s In-Store for Retail Media Networks, presented in cooperation with DMEXCO here.