Amazon Takes On Biggest German Retailer/Cataloguer
posted by Stuart Cumming ~ 18/03/14
Category: Retail
The nice guy of German retail, Michael Otto is under attack from Jeff Bezos' Amazon. And right now, he's losing.

Forbes Magazine takes you through a short history of the Otto company (including CEO Michael Otto's beginnings in the catalogue business - hence our initial interest in the story) and then poses the question: Can a family-owned retail giant run by a paternalistic billionaire compete with the efficiency-obsessed behemoths born of the cut-throat Internet? Do nice guys finish last?

Do nice guys finish last?
Michael Otto is a very good retailer. He's built an $18 billion retail empire across 20 countries and runs the biggest direct response, direct mail company in the world. Think Crate & Barrel and Sears in the US, for starters.

One of the keys to his success was treating his employees well. He is a nice guy. 

He even thought he had the new era of digital retailing figured out: No entity sold more clothes online last year. But last year, for the first time, Amazon's sales in Germany ($10.5 billion) eclipsed Otto's ($9 billion). And the trend lines are far uglier: The Otto Group's sales are up 17% in Germany since the recession, while Amazon's have doubled since 2010.

Online plus 1,800 catalogues? We wish!

Otto went online in 1995 - the same year as Amazon and earlier than many German competitors. Today online sales are 60% of Otto Group's total; another 30% come from its 1,800 different catalogues and the rest from its 400 physical stores.

To read the full Forbes article by Adam Tanner click here
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