Artificial intelligence at OTTO - already part of all business processes today

Artificial intelligence (AI) has been omnipresent since the triumph of ChatGPT and other AI technologies. At OTTO, however, it has already been in use for more than a decade. Today, the technology is used in almost all of the company's value streams. These range from warehousing to the customer experience. By 2030, OTTO CIO Dr. Michael Müller-Wünsch assumes that up to 50 percent of the e-commerce company's TECH portfolio will be characterized by AI architecture elements.

AI in business processes

AI-supported sales and returns forecasts

Foresighted planning is crucial, especially in our own retail business. This is why OTTO uses AI-supported sales forecasts to predict which items will arrive in the warehouse and when, what sales can be expected at what time and how many items will be returned. The company then uses this information, for example, to determine procurement quantities in purchasing and optimize warehouse logistics. Sales can also plan promotions based on these findings in order to come up with the right offer in times of high demand. Every month, the AI makes 7.5 billion individual forecasts for this purpose.

Image recognition through artificial intelligence

OTTO wants to offer its customers the best shopping experience. This also includes curating and reviewing OTTO's constantly growing range of products - also with a view to the company's values and compliance guidelines. This is supported by an AI that uses image recognition to collect and evaluate all relevant information from the partners' article images. This prevents undesirable items from being offered on the platform. For example, the AI filters out unconstitutional symbols or nudity and enables OTTO to remove this content from the platform immediately. The company also uses AI to evaluate product texts in order to identify inappropriate content and be able to act quickly.

AI in the customer experience

The intelligent search

The user's shopping experience often begins with a specific search request on the platform. The search results are displayed with the help of AI: The semantic search engine on otto.de and in the OTTO app "understands" what users want. It recognizes the meaning behind a search term but can also classify synonymous terms and spelling mistakes. The search learns from user behavior - for example, if a customer enters "jogging shoes", the search engine knows that people who have also searched for "running shoes", "running shoes", "sports shoes" etc. have bought a specific product. The search engine displays this article accordingly. The click rates on "similar articles" have increased by up to 50 percent as a result.

Using AI to personalize the user experience

If customers spend more time on the platform, an AI 'learns' their preferences and can thus improve the user experience and personalize it with tailored product suggestions. The entire online store can be adapted to the individual shopping experiences of individual customers thanks to the AI's initially trained and later independent decision-making.

More insight into customer reviews

OTTO uses AI to provide a better overview of product reviews for customers: An algorithm automatically recognizes the most frequently mentioned aspects in the customer reviews on the platform, identifies the tonality and sorts the statements. Customers can now filter the reviews using specific keywords and view specific criteria - for example, whether an item of clothing runs large or small or the picture quality and usability of a TV set.

Generative Artificial Intelligence (GenAI) at OTTO

The Group's own generative AI: ogGPT

Within the Otto Group, the Group's own generative AI supports employees in their everyday work: The ogGPT
works like OpenAI's model and responds to text-based prompts to create text and images. The tool is accessible to all employees. On average, the AI processes over 3,000 requests every day and generates up to 1,700 images.

The intelligent AI assistant in a pilot test

As part of a pilot test, OTTO tested the use of an AI assistant on 180,000 products in summer 2023: Customers were able to enter their product-specific question in a chat bar on otto.de and in the OTTO app. They then received an answer within seconds based on existing product reviews, the product description and the product title. The test was successful: the assistant provided guidance and helped customers find the right product even faster. The teams are incorporating the findings from this pilot test into the further development of OTTO's own AI products.

GenAI in software programming

At OTTO, programming is done with AI. The use of copilots has enabled the development teams to achieve massive efficiency gains. This helps them to launch MVPs (minimum viable products) more quickly and test new solutions directly in the real world. For OTTO, this offers enormous added value as part of the ongoing transformation to a platform.

AI in customer support

OTTO is currently testing the use of generative AI as an assistive solution for agents in its customer centers. The idea is that an AI solution will suggest suitable and further answers to agents in dialog with customers, for example when it comes to specific product questions. This allows them to provide advice at any time, even with the exponentially increasing product selection in the marketplace business. OTTO is planning its first MVP with a partial product range this year in order to test the procedure together with the call center agents.

Chatbot answers simple requests

OTTO's chatbot Clara has been answering simple and recurring customer requests for several years now to relieve the workload on our call center agents. This gives the agents time to deal with more complex issues. However, generative AI offers completely new possibilities here. That's why the developers want to integrate this technology into the chatbot this year to enable even more appropriate and human dialog. The aim is to help customers even more closely and efficiently with simple requests.

Generative AI for content production

The growing marketplace business places exponentially higher demands on content production: every article requires an informative product text to help customers make a purchase decision. Generative AI supports the content teams at OTTO by automatically creating product descriptions. As a result, customers receive a good range of information across the entire product range.

GenAI at OTTO - where is the journey heading?

The use of GenAI in content production could prospectively continue to grow. OTTO is already experimenting in several areas of application. For example, fast image generation makes it easy to carry out A-B tests with different product images without having to produce them at great expense. This would allow teams to quickly test whether a sofa is more likely to sell if it is shown in a loft or a one-bedroom apartment. This creates low-threshold opportunities for platforms to increase their conversion. At the same time, the customer experience could also be personalized even more in the future by allowing users to choose the setting in which they want an item to be presented.
It would also potentially be possible to provide users precisely tailored image and text content based on their data and user behavior. The AI might go so far that it could incorporate color preferences, for example, or automatically address customers in their native language.