Leistungen // Laterales Management

otto and
the culturAl change

Mail order business now and in the 1950s are two entirely different things. At one time it was a real event for the whole family when the freshly printed goods catalogue arrived in the post twice a year and people could order trendy things, whereas now it has become a quick and easy affair: consumers receive new offers for fashionable products every minute by e-mail on a computer or smartphone – and already the order is placed.

And who is still aware of the Quelle mail order company in Nuremberg? It was the big competitor of Otto Versand in Hamburg until the 1990s. However, whilst Quelle became a victim of the internet, Otto reinvented itself in time and is reporting profits – both are interesting examples of the digital revolution.

Transformation was already there in Otto's makeup

Werner Otto, the founder of the group that bears his name, did not, however, become wealthy with mail order business. Already in the late 1960s he started a second company which has also been very successful, namely the ECE Group, which is still one of the most successful operators of European shopping centres. Furthermore, the acquisition of properties which he bought in New York at the time brought a tidy sum of money into the company's coffers. That is namely where Otto discovered that Americans liked going to shopping malls. Whilst in Germany department stores such as Hertie, Horten, Kaufhof, Karstadt & Co. were established alongside retailers in the inner cities, the construction of shopping malls was a completely new development at the time.

Moreover, the members of the Otto family have always been patrons of the arts who supported cultural institutions way beyond Hamburg. Anyone who is serious about culture cannot simply say that change (WHAT) has nothing to do with how we manage, make decisions and work together (HOW). That is why Otto's company has always been regarded as innovative.

A digital success story

Already in 2016 70% of all transactions were processed digitally. Otto anticipated this development years ago and, amongst other things, he founded the e-commerce specialist Collins, from which various fashion brands have since developed with the help of internal and external experts.

Co-operative projects, the acquisition and sale of companies, start-ups as well as cultural initiatives such as the "FuckUp-Night" are now among the options for transformation. The latter, for example, is a forum for managers and others who are interested in telling each other the stories of their failures.

A successful story of permanent cultural change

What now looks like a sound business model and a continuous corporate development could only be achieved by hard struggle over the years. It was not only Zalando and Amazon who were in the red - Otto also struggled with serious financial difficulties until 2015 when the company returned to profit after many years, i.e. EUR 187 million in 2015, which was even exceeded in 2016 according to internal company reports.

The company is aware that it will be a long journey and that the pace of change will increase further in the coming years. In relation to its competitors, however, the company with its most successful history of permanent cultural change has the best prospects of prevailing in the market.