The economic crisis also left its mark on Otto. The mail order company is struggling with a massive drop in sales. In an interview, CEO Birken has now revealed how tough times really are. Not even the traditionally strong Christmas business is still a safe bet.
Behind Amazon and ahead of MediaMarkt: Otto is number 2 in German online retail. In contrast to Neckermann or Quelle, the mail order company has made the leap into the digital age. A recent turnover of 15.6 billion euros is proof of the successful transformation. But skyrocketing energy prices and record inflation, which lowers the buying mood of Germans, are also causing problems for Otto, according to CEO Alexander Birken.
Otto experiences an unprecedented reluctance to buy
Between March and August 2022 is the Sales in Germany fell by 13.5 percent, according to the Otto boss (source: Handelsblatt). The 58-year-old does not see a trend reversal either, and Birken does not even want to bet on the high-sales months at the end of the year: “Nobody knows what will happen in the Christmas business,” is the sobering prognosis.
Consumers are watching every penny right now. Otto experience one Reluctance to buy like the company has never felt before. It is already clear that the mail order company will not achieve the top result from the previous year.
In addition to the reluctance of Germans to buy, Otto himself had to cope with rising costs “in practically all areas”. The price increases cannot be passed on 100 percent to customers, so Otto has to be satisfied with a smaller margin. After all, according to Birkner, business is going much better abroad. The company can record growth of more than 8 percent there.
How to save when shopping online:
In order to save energy costs: Otto employees have to move closer together
Otto responds to rising energy costs with creative cost-saving measures. Some buildings on campus will be shut down, the remaining Otto employees have to move closer together – in the truest sense of the word. In the buildings that will continue to be used, the Temperature also limited to 20 degrees. Together with a hybrid working mode, Otto wants to reduce energy costs by 20 percent.