Otto Group driving digitalisation forward
The corona pandemic has given Germany a digital boost. Yet, the Otto Group confirmed its goal of becoming a fully digitalised retail and services company in late 2019, and brought Dr. Hanna Huber on board to help achieve this objective. The position of Group Vice President Technology Strategy and Governance was created especially for the digital expert.
Huber studied Electronic Business at Berlin University of the Arts (UdK), and completed her PhD on the topic of innovation diffusion in Journalism and Communications. She then moved from the Berlin-based Zalando fashion platform to the Otto Group in Hamburg. In an interview with Hamburg News, Huber gives insight into the race for technology, AI and digital lunches at the Otto Group.
Hamburg News: Dr. Huber, the Otto Group has set its sights on becoming a fully digitalised trading and service company. Can you sketch the extent of digitalisation in the Otto Group at present?
Dr. Hanna Huber: Basically, digitalisation is a never-ending process. The Otto Group has always been open to new technologies. However, since the triumphant advance of the internet from the mid-1990s, digital business has become one of the most important sources of income.
The group has also built up an enormous amount of expertise over the years, which makes it easier for us to adapt to new trends and technologies. Last but not least, with around 50 million active customers worldwide, we have a wealth of data that helps us tailor our offers and campaigns to our customers' needs and with great success. Our retail brands OTTO and About You, for instance, go to great efforts in marketing automation, which makes them proven leaders of the field. Successful digitalisation is thus the sum of many individual parts. At the same time, however, it remains a race for technology in which we have to measure ourselves not only against the competition, but against our own processes. Both areas always hold plenty of room for improvement.
Hamburg News: A new position was created especially for you. What does a "Group Vice President Technology Strategy & Governance" do?
Dr. Hanna Huber: My job is akin to that of an air traffic controller. I keep track of all the technology projects within the group and steer them in the right direction - in the truest sense of the word. This involves sharing information with the relevant decision-makers in the company, setting standards and of course, monitoring success. Redundant processes are the biggest brake in a digitalisation process. I try to counteract this early to save time. As I have just explained, we operate in a very fast-moving, competitive environment that leaves little room for manoeuvre in terms of speed.
Hamburg News: What success has the Otto Group already had with its digital course?
Dr. Hanna Huber: We have made leaps and bounds in the field of standardisation over the past two years and from our own strengths. At present, we are pushing ahead with a uniform tech stack, i.e. a solution environment for e-commerce, to which several group companies are successively docked. This is particularly helpful for smaller group companies with reduced technology teams, as they benefit from the latest developments, but do not have to maintain these skills themselves. This allows them to concentrate on their core business. An essential part of this tech stack is the About You Cloud, whose solutions are already being used by several Otto Group shops. In other words, we use modern technologies and skills in individual group companies to benefit others.
Hamburg News: What challenges are you facing presently?
Dr. Hanna Huber: Decentralisation is perhaps the greatest challenge facing the Otto Group. But at the same time, it is also one of our greatest strengths. From a technological point of view, however, it involves lots of work especially in terms of striving for standard processes and the speed outlined above. We have more than a hundred retail brands and deal with very different business models sometimes. Our goals are thus quite heterogeneous, which is reflected in the technological setup. Bringing these different perspectives together and making decisions that benefit us as a group means we have to talk to each other and find solutions together. We form teams consisting of representatives from different companies in the group, who then jointly develop and evaluate a solution for each topic.
Hamburg News: Germany experienced a push towards digitalisation during the corona-induced lockdown. Has the Otto Group achieved a surge in turnover and developed new, older target groups?
Dr. Hanna Huber: Corona has had an immediate impact on our business. Incredible shifts in supply and demand occurred especially in March and April at the peak of the lockdown. We noticed that consumers' demands for new clothes were extremely low, while everyday items e.g. razors, home appliances or sports equipment were extremely popular. Consumers' priorities sometimes shift dramatically. We were well able to compensate for this with our wide range of products and gained many new customers across all age groups and because online retail enables contactless shopping.
Many stationary shops were closed for weeks, which had to be compensated for via the digital distribution channel. Fortunately, this did not increase the general rate of returns. On the contrary, it even decreased by five percentage points for some companies over 2019. However, talk of a surge in sales is premature. To quote Alexander Birken, CEO of the Otto Group, we expect to "master the difficult financial year 2020/21 well and are optimistic about the future."
Hamburg News: Thank you for the interesting talk.
Interview by Yvonne Scheller
Founded in 1949 in Hamburg, the Otto Group is a globally-active trading and services group with almost 52,500 employees. The group is represented in 30 major corporate groups in over 30 countries in Europe, North and South America as well as Asia. Its main activities are in: Multichannel Retail, Financial Services and Service. The company generated EUR 14.3 billion in revenue (online revenue: EUR 8.1 billion) in the 2019/2020 fiscal year. The Otto Group includes the fashion start-up About You, Hamburg's first unicorn, and the company builder Otto Group Digital Solutions.