In 2000, the Otto Group became the world’s number two online business-to-consumer vendor behind Amazon. Two years later, the company’s main brand Otto Versand changed its name to Otto. Nowadays, Otto has left its mail-order business behind and is a true e-commerce leader in Europe.
The Otto Group is a German group of retail companies and retail-relatived service providers. The company has over 50,000 employees across the globe and achieved a total turnover of 13.7 billion euros in 2018. The Otto Group’s famoust brand is, of course, its online store Otto.de, but since the founding in 1949, the Otto Group now consists of 123 major companies. The Otto Group is present in over 30 countries in Europe, North and South America and Asia and last year, the company’s global online revenues increased to 8.1 billion euros in the 2019/2020 financial year. But the pandemic outbreak let the Germany based ecommerce giant facing challenges. So, what’s going on?
According to data released by the platform, coronavirus has lowered the return rate. The corona crisis has led to a surge in online shopping, but consumers aren’t returning more. That’s what the Otto Group has noticed as reported by local press. Actually, the company doesn’t have answer to why this is the case, and whether a general trend reversal can be derived from this. According to the Otto Group, in Germany people have ordered more, but returned less. This is, without any doubt, a change in buying behavior: Germans are, now, shopping more consciously and closer to their needs.
Data has shown how return rate of Otto.de decreased by 5%, compared to the same period last year. And the trend is also the same for other e-commerce platforms. The Witt Group registered a reduction in the return rate of at least 2% points across all of its brands, while Heine, saw a decrease of 7%.
Online shoppers buy more items in product categories such as electronics, furniture, home and garden, home textiles and basic-oriented fashion. These are all items with lower returns rates. “The purchasing behavior has obviously changed during the corona crisis”, says Marcus Ackermann, Otto Group Board Member for Multichannel Distance Trading. “From emotion-driven spontaneous purchases to inspiring but more conscious coverage of need.” By the way, it’s not yet possible to predict whether these changes will persist and correspond to a generally more conscious purchase pattern among German customers.