Sebastian, beforehand to clarify: What exactly do you do?
Sebastian Baumann: OTTO and ECE connect their shopping worlds for a joint connected commerce concept, forming their own joint venture, Stocksquare GmbH & Co. KG, with both parties holding 50 percent of shares. Customers can see on otto.de whether products – except at OTTO – may also be available at a nearby ECE shopping centre. They also see the store price as well as the address, business hours and contact information for the respective store.
What’s special about this? Companies like IKEA, H&M or even Media Markt have been doing it for years.
Alexander Will: Our connected commerce approach is entirely different. We don’t connect our own stores to our own online shop – we connect stationary product ranges of retails and brands renting space at ECE shopping centres with the shopping platform otto.de.
And yet from the customer’s perspective it is and will continue to simply show availability …
Alexander Will: Yes, however for us, showing stock is only the first step towards a much bigger goal. In the medium term we want to implement a nationwide, area-wide offering which will also allow reservation ("Click & Reserve") and payment for stationary products ("Click & Collect") through otto.de. We’re even planning same day delivery of these products from the shop to a nearby address ("Ship from Store"). We still have a long way to go, and will do need travel and model it together with the retailers.
So it takes time to implement.
Sebastian Baumann: Yes, it does. That’s why we will be launching and expanding the services little by little. Also because we greatly rely on cooperating with retailers. The more retailers work with us, the quicker we can scale – and the sooner customer will be able to use the new services. Our talks with retailers to day have been going quite well.
Who can even become a partner? Even retailers outside ECE?
Alexander Will: Technically, we can and want to also work with local availability of retailers outside ECE centres. But at first we will focus on commercial partners already working with ECE, partly because we believe that partnering with ECE is our best option for quick, nationwide expansion. In the next two years we want to increase the number of products with local services by ten-fold.
Are the new services currently already available nationwide?
Sebastian Baumann: Yes, for most pilot partners such as Brax, myToys, SportScheck and Ulla Popken we’re already utilising the availability of the entire nationwide retail networks from the beginning. This also applies to about 90 ECE centres in Germany, which are located within a 30 minute drive for 60 percent of the population. But it also goes far beyond that. For example, over 200 Ulla Popken shops are already connected to otto.de via Stocksquare – so it can certainly be considered a nationwide offering.
"To create the perfect shopping experience we’re working on connecting stationary shops & online retail to eliminate the boundaries between the two worlds. Connecting otto.de & MARC O’POLO shops makes shopping even more convenient."
OTTO and ECE share their affiliation with the Otto family. But they’re only connecting their activities now, after many decades. What took so long?
Sebastian Baumann: For a long time we were lacking the technical basis for a valuable cooperation. Connecting the stationary offerings of retailers at our ECE centres with otto.de requires digital access to the product data of the retailers and prepared data. When we launched out digital mall project, this was still virgin soil for many retailers. So we really did pioneer work. Many can meanwhile meet the requirements, so in this respect we are on the right track with respect to timing. The Digital Mall, which we have been using for some time now to show local product availability from websites and apps of the centres, by the way is the technical basis for our current project.
What do you expect from this cooperation?
Alexander Will: For us here at OTTO it may be a one-time opportunity to add another dimension to the platform approach – products and brands from stationary retail. We want to reach our customers with as many points of contact as possible in the future, both offline and online. And our partnership with ECE allows us to do so: Connecting with stationary retail bridges the gap between the shopping worlds.
Sebastian Baumann: Connecting to otto.de increases the reach of products in stationary shops of our commercial partners. So in this sense we’re turning online traffic into actual frequencies at the centres. The goal of ECE is to use this cooperation to strengthen stationary retailers at the centres and increase local sales long-term. Online-offline bridging like we’re implementing is a major key for this – if not the biggest.
In a guest commentary Martin Groß-Albenhausen, deputy managing director at Bundesverband E-Commerce und Versandhandel e.V. (bevh) tells how connected commerce can change shopping.