According to the company’s latest 2020/21 forecast, the Otto Group expects an increase in its global e-commerce revenue of around 23%. Main drivers are the changes in consumer behavior, and the digitization of its sales channels that proved to be well timed and extremely beneficial.
As announced by its management last week, the Hamburg-based group expects to generate record revenues in e-commerce. Several reasons, influencing each other positively, are responsible for this growth trajectory.
Digital beats analog
The Group’s key success factor is the digital transformation of its business at all levels and across all sales channels. In doing so, “we laid the foundation for the really gratifying figures in e-commerce, presented now,” explains Sebastian Klauke, Executive Board Member and responsible for e-commerce, technology, business intelligence, and corporate ventures. The strengthening of the online activities enabled the company to reach roughly 30% more customers last year, which translates into a remarkable plus of 9.4 million additional clients.
Physical shopping is out
This goes hand in hand with a change in purchasing behavior caused by lockdowns and rules stipulating social distancing during the Covid-19 pandemic, boosting the demand for technology, multimedia, furniture, or home accessories. Growth rates in sales of so-called wearables, e. g. smartwatches, are in some cases topping 100%, Mr. Klauke reports. Simultaneously, booming online sales have also impacted the group's logistics service provider, Hermes Germany. The company delivered a record 126 million shipments in last year’s peak season (OCT20 to DEC20), translating into an increase of around 25% over the previous year. Over 99% of the parcels and packages reached their customers in time for the festive season – as standard via contactless and risk-free delivery, which Hermes was able to implement within just 48 hours, Mr. Klauke applauded.
Thirdly, the Group benefitted from its broad range of products normally displayed in the affiliated brick and mortar retail stores. Forced by the pandemic, these stores had to shift their sales activities from physical to online practically overnight, which worked extremely well, proven by the figures presented now.
Working online ups productivity
Remote work was another success factor; well over 20,000 of the more than 50,000 Group staff worldwide were and still are working online. Already years ago, they were equipped with mobile devices while the Otto Group started the cloud transformation of its IT system, thus laying the cornerstone for facilitating remote work while simultaneously maintaining the Group’s performance at a high level.
Alexander Peters, Group Vice President Otto Group IT, comments: "Moving a decentralized group of companies to the virtual world so comprehensively and promptly was the biggest load test our teams, applications, and systems ever had to withstand at that point. I am extremely proud that we were able to rise to the enormous technological challenges in a joint effort and make our contribution to business performance.”
Among the world’s top ten
Based on the business results so far, it is clear that Otto Group has cemented its place among the world's top 10 e-tailers last year, behind Amazon, JD.com, Apple, Suning, Walmart and vip in terms of e-commerce sales. To streamline its sales activities further in 2021, Otto announced that it will be investing a three-digit million euro sum to drive digitalization forward. The Group’s overall financial results will be presented at its annual press conference in MAY21.
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