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“Just selling is no longer enough”
Customer focus

“Just selling is no longer enough”

OTTO is redesigning its business model as a platform. It is the largest upheaval in the company’s 70-year history. But what will actually change as a result? And what does it mean for visiting otto.de?

6/11/2019 Editor Michael Strothoff Reading time: 3 Minutes
Otto.de has been in existence since 1995. Ever since, the online retailer has constantly kept up with the rapid development of the internet and has been one of the biggest shops in Germany for many years. And yet, the Hamburg-based company is now altering its strategy and expanding its business model from being a retailer to a platform. Why?

“Because consumer behaviour has changed”, explains Tim Buchholz, Principal of Platform Business at OTTO. “The customers of today want more than just being able to order products. For us, this means that just selling is no longer enough. Instead, more than ever before we must offer a wide selection with corresponding services to make our customer experience something special”, says Tim.

Becoming a problem solver

Tim has a favourite example to demonstrate the added value of platforms. “You’re standing in your flat, you know the dimensions of your living room, and you decide you need a new red couch. You will find countless suppliers of ‘red couches’. The product information on the websites also contains important details, such as width and length, which enable you to make your decision as to whether it will fit or not. But what you can’t see is how the new red couch will work with your beloved wing chair. This presents quite a problem, and we have the solution”, Tim reveals. In this case, the solution is an app that uses augmented reality to project furnishings into the customer’s room before the purchase is made. As a result, today people are principally buying from the suppliers who resolve all the challenges surrounding the purchase of a product. “This is what’s new about the platform business model. We ask ourselves what problems our customers are facing out there and offer appropriate solutions to them. No matter what the particular product is, we offer the same service quality for each and every product,” says Tim. To do this, OTTO requires new skills.

Tim Buchholz This is what’s new about the platform business model. We ask ourselves what problems our customers are facing out there and offer appropriate solutions to them

Tim Buchholz, Principal Platform Business at OTTO

OTTO opens the door to partners

“Some of these skills deal primarily with B2B business,” Tim explains. “One of the biggest changes for us is the huge opening for brands and retailers to offer our customers even more products at otto.de. With more than 1.6 million visits per day on average, our task as a platform provider is to make infrastructure, shopping technology and access to online shopping available so that partners can use these services to showcase their products with our service standards in our digital shop window.” Customers will therefore find an ever-growing selection at otto.de – 3 million products at present, to be precise, from more than 6,000 brands and around 400 marketplace partners. This is more than ever before.

What does this mean for visiting otto.de?

At the first click, not much has changed for customers. The entry point to the online shop otto.de is still the same – but when searching for products, it will quickly become obvious that the range of products has expanded hugely. OTTO also provides services that make the customer experience as convenient as possible.

This includes, for example, the option to view details of the current status of an order, delivery or return in real time, and of transparently and succinctly viewing other buyers’ experiences with a product before purchasing it oneself.

“It is increasingly about creating customer experiences. We want our customers to feel that they have come to the right place,” says Tim. “This is because, alongside a wide selection, more brands and new ranges at otto.de, we can see that they want three things above all: simple and quick solutions, reliable services and guidance through the jungle of offers. The platform business model is particularly good for focussing even more strongly on these requirements. “That’s why we’re changing it and rethinking OTTO as a platform,” Tim concludes.

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