Otto Group announces over 20 per cent growth in e-commerce
Initial forecasts indicate that the Hamburg-based Otto Group will close the 2020/21 fiscal year on February 28. 2021 with online revenues of some EUR 10 billion globally over EUR 8.1 billion in 2019/20, a press release said Saturday (January 27, 2021). The group is expected to generate German e-commerce revenues of EUR 6.9 billion - an increase of EUR 5.7 billion over the same period last year. The company has forecast a year-on-year increase in global e-commerce revenue of around 23 per cent (Germany: over 22 per cent). The Otto Group has thus exceeded the average revenue increase of 14.6 per cent for all e-commerce retailers as determined by the German E-Commerce and Distance Selling Trade Association (BEVH).
Digital transformation paying off
Sebastian Klauke, Executive Board Member with responsiblity for E-Commerce, Technology, Business Intelligence and Corporate Ventures, remarked: “We have very rigorously and successfully pushed ahead with the digital transformation of the Otto Group in recent years – at all levels and across all sales channels. In doing so, we have laid the foundation for these really gratifying figures in e-commerce." The individual company, Otto is set to become a platform and acquired more than 1,000 new partner companies in the 2020/21 fiscal year. It is now reaching around 30 per cent more active customers (a total of around 9.4 million) over the previous year.
Demand for furniture and technology in 2020
The changed purchasing behaviour of consumers in the wake of the COVID-19 pandemic is driving growth. Demand for furniture, home accessories, as well as technology and multimedia remains high. Growth rates in sales of so-called wearables, e.g. smartwatches, are in some cases topping 100 per cent. After challenging months and declining sales in the first half of the fiscal year, the textile trade has been more upbeat since early autumn. Demand for hair clippers remains high also, Klauke noted. The growth in online sales has also impacted the group's logistics service provider Hermes Germany. The company delivered a record 126 million shipments in the 2020 Christmas business (October to December) period which amounted to an "increase of around 25 per cent over the previous year".
Remote working and investments in technology
The successes in e-commerce are remarkable as the COVID-19 pandemic has forced a large number of staff across the entire group to switch to remote working. The vast majority of the administrative workforce – normally around 90 per cent sometimes up to 100, per cent – is working from home. Well over 20,000 of the more than 50,000 group employees worldwide are working online, according to Alexander Peters, Group Vice President Otto Group IT. During the first lockdown from February to April 2020, the number of virtual meetings soared by 1,400 per cent. Peters commented: "Moving a decentralized group of companies to the virtual world so comprehensively and promptly was the biggest load test our teams, applications and systems had ever had to withstand to 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.”
The Otto Group is planning further significant investments in technology and has earmarked a three-digit million sum to drive digitisation forward.