29 November 2023

“The pace of change is increasing rapidly

As Chief Digital and Technology Officer (CDTO), Christoph Eltze is the REWE Group Management Board member responsible for technological innovations. In the current Voice of the Month, he explains why he often wishes there was greater political courage in matters related to digitalization as well as what’s behind the REWE Group’s “AI Manifesto”.
Reading time: 7 min.

Dear Reader,

Everyone is saying that Germany is becoming an increasingly unattractive place to do business, and as a result, companies are thinking about leaving the country or moving their operations elsewhere. As a cooperative retail and tourism business, the REWE Group has deep roots in German cities and towns. This is our home, and we will continue to provide basic goods to millions of German citizens in the future. Unfortunately, it is true that the conditions for technological innovations are much more forward-looking outside of Germany. Political leaders in other countries often have greater courage to try new things, to allow innovations in general, and to accelerate the corresponding processes by lowering administrative barriers. This makes innovations a daily reality for a country’s citizens. For example, self-driving taxis are already a reality on the streets of San Francisco. And self-checkouts are now common in Asia.

But we don’t have to look that far. Recently, I was with my colleagues in Lithuania, where since July of this year, our IKI brand has been operating compact driverless delivery vehicles on the streets of Vilnius, the country’s capital, and delivering orders directly to our customers. Unfortunately, the enthusiasm for innovation on the part of the Lithuanian authorities, as demonstrated by fast and flexible approval processes, is not as evident here in Germany, where a project of this sort is difficult to imagine. And, unfortunately, this is not the first lost opportunity.

But we are not ones to bury our heads in the sand; we are continually and enthusiastically developing new technological options. I’ll provide some examples to demonstrate the range of innovations as well as our approach.

At our four REWE Pick&Go stores in Berlin, Cologne, and Munich, customers can shop without having to stop at the checkout. Using state-of-the-art camera and sensor technology, purchases are recorded securely and with minimal data collection and then automatically invoiced when the customer leaves the store. It’s important to note that the self-checkouts and REWE Pick&Go stores have not resulted in staff cuts. Instead, given the shortage of employees we’re seeing at the moment, we are able to put our colleagues to better use in other places to serve our customers.

Since October, customers in Michelstadt (Hesse) have been able to order food from their local REWE store and then have it delivered by a “Wingcopter” drone. In this way, we work with our partners to bring technological innovations to rural areas as well.

Modern technology also supports traditional processes in our stores. For example, we use technology to develop programmes that recommend the optimal products for each location. We can then use these modules to plan for the individual store. We are hard at work on several other applications.

Artificial intelligence (AI) is far from a new concept for the retail sector and the REWE Group. Very early on, we looked at the opportunities and risks of artificial intelligence. Three years ago, we became one of the first companies in the retail sector to publish an “AI Manifesto” , which provides concrete recommendations for our developers when developing and using the relevant applications – and expressly takes ethical considerations into account.

Flexibility is crucial when working on technology projects, whether such projects involve internal and external experts, or collaborations across locations or national borders. But even the deployment of urgently needed external digitalization experts on agile projects is difficult in Germany, although we are very reliant on their innovative expertise. This slows projects in this country and can even result in such projects being shifted abroad. For this reason, we, along with several other companies, have made an appeal to the German Federal Minister of Labour, Hubertus Heil, as we can only overcome these challenges by working together.

Let me be clear: We are not asking for a blank check when working with innovative technologies, data or artificial intelligence. We take our corporate responsibility seriously, even when using new technologies.

Christoph Eltze, Member of the Management Board – Chief Digital and Technology Officer
Christoph Eltze
Christoph Eltze, Member of the Management Board – Chief Digital and Technology Officer

In addition to digital processes, and in some cases, government support, the authorities urgently need to prepare for the digital and technological age both in terms of technical expertise and human resources. We would like to see more qualified personnel who can evaluate new technologies at the appropriate level and serve as an expert point of contact for companies, ideally before the technology is implemented. Lawmakers should also take a closer look at technology regulations, which in my view is necessary given the development cycle. The German Federal Data Protection Act (Bundesdatenschutzgesetz) is more than 30 years old, and the General Data Protection Regulation, which took years to adopt, has already been in place for some time now as well. In contrast, innovations appear in a matter of months or even days. The pace of change is increasing rapidly. So, a legal framework that is several years old often only takes into account the current situation to a very limited extent – and yet it continues to be applied in the same way. Addressing these points would go a long way towards reducing red tape.

Let me be clear: We are not asking for a blank check when working with innovative technologies, data or artificial intelligence. We take our corporate responsibility seriously, even when using new technologies. Rather than allowing ourselves to be carried away by technological innovation, we integrate it organically in all areas of the company. That does not mean, however, that Germany and the European Union can remain idle and watch as other countries implement technological innovations. We need framework conditions and regulations that protect consumers and their data and that clearly outline the risks of AI while also providing sufficient room for innovation. That is why I believe that a practical and solution-focused dialogue between businesses and lawmakers is absolutely critical in order to discuss needs and concerns, challenges and experiences, and to learn from one another.

We continue to be committed retailers, with thousands of stores in urban and rural areas, and employees who look forward to helping customers every day. But technology in our sector has given us an opportunity to help our customers even more and to focus on our product offerings. One thing is clear: despite all the technological developments, our focus is on people. I firmly believe that we can all benefit from technological innovations – if we use them responsibly and creatively. Dialogue is important. We are happy to use our expertise and experience in this regard.

Sincerely, Christoph Eltze

Christoph Eltze
Christoph Eltze
Member of the Management Board – Chief Digital and Technology Officer