The Otto Group as a business

23.02.20236 minutes reading time

You are a thoroughbred entrepreneur. Do you have a particular credo that guides your activities?

Integrity, credibility and trustworthiness are values that are very important to me personally. I also consider social commitment, environmental protection and fair cooperation to be fundamental pillars of our society. With regard to the Otto Group, these values are reflected in our business activities. The Otto Group stands for tradition, continuity and responsible entrepreneurship. I consider these values to be the best imaginable basis for any company, especially when it comes to the question of how to shape lasting change. At the same time, it is essential to question existing methods and replace them with new ones where applicable, to drive innovation and permanently improve the present. It is this continuity of change which has become the core quality of our company; it drives our corporate culture and we will stay faithful to it.

As the Chairman of the Supervisory Board, you withdrew from the operational side of the business in 2007 and are now in charge of strategic topics. What do you see as the Otto Group’s future topics and business areas?

We will continue to drive the international expansion of our business activities, extend our various distribution channels and strengthen our e-commerce activities through innovative online business models. In addition, we plan to expand our extensive range of services for retail along the whole value-adding chain. We are particularly interested in the markets of Russia, Brazil and Turkey, but also in countries such as China, India and Mexico.

You made advances into Asia as early as the 1980s. What importance does the Asian market have for you, especially China?

India and China are and continue to be the big growth markets. That’s true for us, not least driven by our 3rd-party brand business. We are involved there in joint ventures and business cooperations. Alongside these, we are also counting very much on the markets in Brazil, Russia and Turkey.

Why does Otto not profit more from the general growth in online retail?

We are the global number two after Amazon in end-customer online retail, and are also steering our growth in this area based on economic criteria. We are counting more on the variety of our sales channels, which is one way we differ from so many of our competitors. With us, our customers decide whether they want to order via the Internet, select from a catalogue or shop in one of our stores. It is not one of our primary objectives to overtake Amazon, for example. What drives us, rather, is to reach as many people as possible with our selling proposition and to satisfy them. The Otto Group sees itself first and foremost as a retailer with personal customer service.

Mail order and the Internet – what’s the future for catalogues?

We decided early on to go for a multichannel model: catalogues, online and over-the-counter retail. The biggest growth is coming from e-commerce. The significance of the catalogue business will continue to decline, although we believe that our customers in the fashion and lifestyle area will continue to place importance on the catalogues as advertising materials. Around 70 per cent of Internet customers look for information in the catalogue before buying, according to our research. Alongside mail order, over-the-counter retail is an important mainstay for us, which we will expand in the medium term. After all, over-the-counter is the dominant sales channel for the retail sector, by a long shot. We are looking particularly for concepts we can use internationally and which are multichannel-ready.

Traditional mail-order companies such as Neckermann and Quelle have vanished from the marketplace as independent companies. What is it that the Otto Group did differently?

We focused earlier and much more strongly on the Internet and on internationalisation, and we appealed to different customer groups with our various company brands. All of this gives us greater stability. The other important thing was that we always had a high degree of continuity in our management, and that will stay the same in future.

The Otto Group continues to be an owner-operated business. What advantages do you see within the current situation for owner-operated and/or family-run companies?

Entrepreneurs, in my view, should not only think of their own freedom, but they must also be conscious of their responsibility towards society and for the environment. If we want to work sustainably, we not only need determination, but also the entrepreneurial freedom to think of the long term. However, listed companies in an age of ‘shareholder value’ are often under pressure to think and act only for the short term, since their quarterly reports are due every three months. I think family companies have a clear advantage here.

How would you describe the positioning of your group of companies, also among your global competitors?

We have sound financial resources. Our activities centre on the customer, because it’s their wishes we want to fulfil. Therefore, on the one hand our focus is on a high degree of continuity, and on the other also on progress and change. This starts with very specialised and creative product ranges in the growing e-commerce area. But it stands and falls for us with the service which we offer in our group, and which we continuously optimise.

In the last 30 years, you have turned a medium-sized enterprise into a global group of companies. How would you define the interplay of power and responsibility?

Even though we now operate with 30 major business groups in the economic areas of Germany, Europe and the USA, the Otto Group is still a family business. Power is not what we emphasise. We think that responsible economic activity is more important. Of course, we have to turn a profit. However, I think that the long-term increase of business value is more important than short-term profit. That’s why I pay a lot of attention to the sustainable development of my company, which means a balance between economic, environmental and social interests. And adherence to values.

How do you manage the balancing act between global growth and simultaneous sustainable business?

I see no conflict here at all. As a businessman, I stand for particular values. What matters to me is that the economy must serve the common good – not the other way round. This is why I think that adhering to defined environmental and social standards is particularly important. We ensure that as we import merchandising goods, we also implement environmental and social standards with our suppliers at the same time. Our customers increasingly demand these values – and that’s why maintaining these standards is a prerequisite for sustainable growth.

What is the importance of the company’s care for its employees?

Our employees are really the bedrock of entrepreneurial success. This is not a new discovery, although currently a highly relevant one. The whole German economy is desperately hunting for good specialist and managerial staff, just as we are. In addition, we also have to be more active than before in looking after three groups of staff: first, we have to ensure that well-qualified women can strike a balance between leadership roles and children. Second, we must pay more attention to the integration of employees with immigrant backgrounds. And third, due to demographic changes, we have to retain older members of staff for longer in the employment process and create a smart symbiosis between the strengths of younger and older people.

What is your view on individual responsibility?

At Otto, we maintain a cooperative leadership style with the objective of giving every employee as much responsibility as possible. Alongside the job, the focus here is also on social commitment, protecting the environment and fair play. We support our employees in going beyond their professional activities and fulfilling functions in our society which correspond to the values mentioned. This creates on the one hand higher motivation in our staff, and on the other better identification with our company.

Globally, citizens and politicians are increasingly making decisions based on environmental and social criteria. What opportunities does this bring for your Group?

We have integrated sustainable - meaning environmentally and socially responsible - action in our corporate strategy since the mid-1980s. This long tradition means we are credible and it also helps us to gain new customer groups, since many people today are more conscious consumers than they were. They want to be able to shop without ethical concerns and they think about their actions and the resulting effects on society. They make their decision to buy more and more based on how responsible a company is. We are delighted to see this and it encourages us to continue on the path we have chosen.

Prof. Dr. Michael Otto as


Prof. Dr. Michael Otto as