The board of the Otto Group announced some impressive figures at the very beginning of the company’s 6th e-commerce media conference at the premises of Limango GmbH, in the Munich district of Schwabing: the Otto Group’s global e-commerce turnover has grown by EUR 760m, to approximately EUR 7.76bn. In the process, the company has confirmed its position as the second largest internet retailer in Germany and one of the largest in the world, announced Rainer Hillebrand, Director of E-commerce and Strategy.

The Group’s sales through the German online store were over EUR 5.4bn, an increase of 10.2%. This corresponds to a climb in existing business of 10.9%, or about EUR 760m. “We are very pleased with this dynamic growth in turnover,” stressed Dr Rainer Hillebrand, Deputy Chairman of the Otto Group with responsibility for group strategy, e-commerce and business intelligence. “The results clearly show that our strategy is working and that the course we are following is the correct one. At the same time, however, we are very conscious that for all our efforts, we cannot rely on the goodwill of our customers – the key is customer-centricity.”

Customer-centricity

It was precisely this individual customer approach that so impressed the panel members of the Internet World Business Shop Award 2017 a few days earlier, when they awarded first place to the Group’s young fashion offshoot, About You, at the Internet World trade fair in Munich. In the category ‘Best online pure player’, About You overtook fashion store Zalando and car parts specialist ATP-Autoteile to clinch the top spot.

Sebastian Klauke, Digital Officer for the company since mid-2017, explained that the Otto Group had successfully embraced digital disruption. For a start, e-commerce remains a successful growth engine for the Otto Group: compared with financial year 2016/17, the international retailing and service group raised its global online turnover by 10.9%, from about EUR 7bn to an anticipated figure of over EUR 7.76bn. In the German market, sales grew by 10.2% from EUR 4.92bn in the previous year to over EUR 5.4bn.

The aim is to keep developing new tailor-made solutions for the various target markets, using the latest technology. The Otto Group is now employing its experience in the e-commerce business for new digital business models. The “clever and very powerfully designed” platform technology used by About You is now being offered to other suppliers – some of them companies within the Group but others possible competitors to it. The important point, says the DDO, who grew up in the start-up business world, is that digital transformation affects everyone. This means that everyone needs to work together – nobody should be trying to do everything by themselves.

Openings for new partnerships

The Otto Group intends to open up its steadily growing ‘ecosystem’ to partnerships with outside companies. “We don’t want to keep all our ideas to ourselves,” says Sebastian Klauke. “We are adopting a platform strategy of opening up our resources and services to the outside.” New partners are gradually being involved with otto.de. A new tool is being launched for this purpose. It is based on the very specific ‘Brand Connect’ strategy which was only introduced on 28 March at the annual accounts conference. A service interface developed in collaboration with brands such as adidas and s.Oliver, is expected in the near future which will package together all the processes relevant to brand providers – analytics, management, operations.

In the medium term, this will allow partners to construct their own brand shops, book advertising material and study sales figures in real time. In another example of a digital experiment, the Group is working with Google to develop voice assistants for use on the Limango market place, for example. Otto is also piloting augmented reality (Google AR Core) for its furniture sales division.

Whether in conversational commerce, the internet of things or data-driven business models, the secret to success lies in Group-wide expansion of technological skills. Standing still, or resting on the laurels of past successes? Not a chance! And here, literally every individual business area and each individual employee is challenged and expected to break new ground.

Ulinka Wagner