History

OTTO is on track to becoming a platform. The expansion of the business model is the focus of the corporate strategy. Specifically, this means: OTTO is becoming accessible to even more partners, will be offering even more products and wants to accompany customers in every aspect of their lives. We have been working on further developing our business model to become a platform and opening otto.de for new partners and brands since mid-2017. At the same time, we have already integrated 400 new suppliers.

The cultural change is the background to this development: Testing new business ideas and concepts live on customers instead of theoretically devising them over long periods of time will become one of the core elements of the “learning organisation”, which OTTO will develop into. Here, a first concrete example of this: OTTO NOW This start-up business model, which relies on “renting instead of buying”, has become reality within merely a few months and since then, has contributed to the sustainability of the sharing economy.

There is a new goal to be achieved by the end of 2023: the completion of the new company headquarters on the campus in Hamburg Bramfeld. The new headquarters will provide a modern and flexible work space for 1,800 employees in a multi-space concept across nine floors. The special feature is that OTTO’s directors are giving up their individual offices – in line with the ideas of New Work.

Whether voice commerce, augmented reality or artificial intelligence: Technological change is firmly implanted in the organisation at OTTO. Reporting designers, developers and product managers not only work in our BI and online marketing teams but rather in a cross-functional manner within the organisation. Their objective is clear: designing the digital future together.

During these years, focus was on the shop technology and it is growing rapidly: In 2013, OTTO programs its own shop software in-house, to respond to the requirements of the digital world flexibly. The first pixelated WAP shop has already reinvented itself on the smartphone screen, starting in 2014 otto.de is even completely responsive and optimised for every screen: Pc, tablet, smartphone, app. During the radical digital change, blogs and social medial also continue to grow. To date, OTTO is engaged in successful content marketing on a total of seven blogs and multiple YouTube formats and social media is a natural contact channel to the OTTO Service.

In addition to the technological change, the company has also been going through a cultural change since 2015. The entire Otto Group asks itself: How can we successfully digitise analogue business models? The digital transformation takes place in the company, with employees, executives and management. We are putting a great deal of energy into rebuilding work spaces, are integrating new approaches to work, working with agile methods, operating data analysis and keep testing again and again. Furthermore, we have been promoting the culture of being on a first name basis since 2016.
Then in 2018, a piece of Germany’s economic history ended: The OTTO catalogue went into its well-deserved retirement – after 68 years. It was delivered to German households for the last time in December 2018. Its cover, which has been decorated with stars like Claudia Schiffer, Heidi Klum or Nena, shows a smartphone with the sentence “app, app and away” for its final appearance. The imagery symbolically stands for the change from catalogue retailer to the (mobile) online shop. At this stage, OTTO customers primarily make purchases via smartphones and tablets on otto.de – over 70 per cent of the visits to the shop are from mobile end devices.

OTTO recognises early on: The Internet is more than just a new sales channel – it radically revolutionises the economy and society. During this time, Prof. Dr. Michael Otto delves into more and more sustainable topics and is chosen Manager of the Year in 2001 by Manager Magazin. His “Cotton Made in Africa” project, which he takes closely to heart, was born. A label, which to this day stands for sustainable cotton production and help for over one million cotton farmers and their families in Africa.

His company changes step by step and utilises the opportunities of the digital world: 500,000 products are already available online in 2007; a year later, online sales exceed the traditional sales channels for the first time: Over 50 per cent of the annual turnover comes from otto.de.

Things are also happening in regard to communication and marketing: In 2008, the first OTTO blog TwoforFashion launches. The approach: interesting products and contents instead of uninspired advertisements. OTTO’s first social media channels follow as of 2009. Facebook and Twitter. Back then, the networks in Germany were still in the initial phase. The online retailer distributes marketing themes and news via social channels but is also one of the first companies to provide actual customer service as well.

While “this Internet” is still an obscure thing to play around with for tech-nerds, OTTO begins with its first digital offers: otto.de is launched in 1995, together with shopping offers on CD-ROM. OTTO does genuine pioneer work on computers with fully animated presenters and multimedia-based features.

OTTO is even present on the first WAP compatible mobile phones in 2000, before anyone was willing to talk about “smartphones”. It is quickly realised: The “new media”, as it was not only called internally back then, is not only something to play around with, not just an extra service. Rather it has the potential for a genuine paradigm shift for new business models. As early as 1997, orders via the Internet account for approximately seven per cent of the total turnover, that amounts to approximately 450 million Deutsche Mark. Booming trend.

The second generation of Ottos lay the foundation of the international business and service group Otto Group: In 1981, Werner’s son Michael assumes the chairmanship of the board, sets up businesses in France, Austria and Italy and participates in SportScheck and many other companies.

Mid-1980s it is official: Otto is the largest mail order company worldwide. Prof. Dr. Michael Otto firmly incorporates a sustainable handling of resources and the environment into the corporate strategy – this requirement still applies today. Michael Otto and his company, which he meanwhile accompanies from the supervisory board, still advocate environmental protection, sustainability and fair trade and promote social projects.

In 1969 the company moves to Hamburg-Bramfeld after a brief stop in Hamburg-Hamm, where it still has its headquarters today. The relocation to the new company headquarters symbolically stands for the speed, at which Werner Otto’s mail order company expanded – from new services such as telephone order hotline, which set Otto apart from other suppliers starting in 1963, up until the introduction of the first electronic data processing, which automated many processes.

Parallel to that, Werner Otto assembles his company more and more as a group, forms the Hanseatic Bank to process the company’s own payment transactions in 1969 and the Hermes Versand Service in 1972 – a proprietary parcel logistics system for Otto. Meanwhile, sales exceed the one billion Mark threshold at the beginning of the 70’s, in 1978, the billion is already tripled.

After World War II, Werner Otto believes in his personal economic miracle and opens the “Werner Otto Versandhandel” in Hamburg-Schnelsen. Legendary: the first catalogue from 1950 with 28 pairs of shoes on 14 pages. Ordering from home and on account too? A successful model.

Business is going so good that the Otto team expand the offer to the so-called consumer durables: Starting in 1956, bicycles and electric appliances can also be ordered. Business grows at an extremely fast rate reaching a turnover of 100 million D-Mark in 1958.