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OTTO achieves fifth successive year of profitable growth

The Hamburg-based company continues to drive its digital business model with a triple-digit million investment

Hamburg-based retailer OTTO continued its track record of profitable growth in the 2014/15 financial year (to 28 February 2015), raising revenues by some three per cent to 2.335 billion euro. The single company maintained the previous years’ high profit level, putting OTTO in the enviable position of once again being able to raise its level of investment clearly in the coming year.

Investments Of 60 Million Euro

With an investment volume of around 60 million euro in its technology platform and assortment development as well as in its brand and employer image in the financial year now closed, OTTO laid the basis for continued positive business development. The Hamburg-based company reported profitable growth for the fifth successive year. However, not even OTTO was immune to the extremely weak fashion market development in the overall German textile market in the 2014/15 financial year.

Weak Fashion Sales, Boost In Online Furniture Trade

In contrast, the durable goods division saw an extremely positive development. OTTO not only successfully and profitably raised revenue in the multimedia and household appliances segments, but also tapped market potential particularly in the furniture area. Besides an expansion of the premium segment, major contributors to this performance were the specialist online shops. These present sub-assortments in the consumer electronics as well as the living and furnishings segments in a clearly differentiated way, complement this with specific service and customer advice offerings and thus make the purchasing decision easy for Internet customers.

Next to the expansion of the infrastructure for OTTO’s specialist online shops, also the technological backbone of the web shop received a double-digit million investment for further development last year. Responsive web-design technology enables OTTO to offer its customers an even more convenient shopping experience. This web-design solution recognises the user’s end-device and its screen resolution, and adjusts the webpage display accordingly. The result is a perfectly displayed webshop, including all navigation elements, texts and buttons. This technology has been implemented since the beginning of the year at for smartphones, and is planned for tablets in April this year.

85 Per Cent Of Sales Generated Online

Today, OTTO generates over 85 per cent of its overall revenue via the Internet. To keep pace with the march of digitisation and anticipate the wishes of tomorrow’s customers, OTTO is once again raising its investment in assortment, technology and market development, earmarking a sum in the triple-digit millions for the coming year. The investments will flow primarily into promising, future-orientated business areas such as online performance marketing, the further development of the webshop, adding algorithm and data-driven information platforms, and the further reengineering of the IT environment. Further funds will be used for the expansion of the assortments as well as for a more intensive customer dialogue via new blog and chat formats. To manage all tasks, OTTO plans to hire further 250 to 300 staff in e-commerce and related technology areas.

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