Otto Group

Dr. Sebastian Walter

I’ m a consumer guy at heart. Putting myself into consumers’ shoes and meeting their expectations is in my DNA. With this, I have an affiliation to consumer-driven businesses, may this be consumer goods, retail and e-commerce, or related areas like consumer financial services. My “philosophy” was clearly sharpened during my 12 years at Bain & Company: Results matter most, with openness to unusual solutions, quite some determination, and a high resilience and pragmatism to achieve a goal.

At the Otto Group, this is what’s needed and what our teams are passionate about. Our Group Companies continue transforming in order to stay ahead of the game in an everchanging retail/e-commerce and logistics industry. Tthe importance of tech is just growing, and we foster new, unusual solutions.

Q: How are you tracking results of digital initiatives?

Within the Otto Group, digital initiatives are spread across the Group and the portfolio companies. Lately, many leaders request a direct return from all AI projects without exception. In my view, this is a fallacy. There are projects whose aim is to improve existing business KPIs. For these, measuring is, as usual, core and center, and a comparison between now and then.

“Results matter most, openness for unusual solutions, quite some determination and resilience to achieve a goal”

However, there are also improvements that are like a hygiene factor (such as an AI shopping advisor) or just an evolution of working tools (such as AI integrated in your office suite). For these, you won’t get hard measurements. That’s no change to the past, however, at least I don’t recall anyone tracked the efficiency improvement from one MS Windows update to the next one and took action from it.

Q: How is the Otto Group coping with generative AI?

The Otto Group applies the latest tech, especially generative AI, and is just embarking on agentic solutions. Three factors were key:

-We started very early on to make generative AI a top-level agenda, with strong support from our former CEO, Alexander Birken, and now Petra Scharner-Wolf.

-We involved everybody, from offering the internal, secure Otto Group GPT to all employees, to many knowledge-sharing conferences. This built excitement as well as confidence.

-In the Group Holding as well as in the Group companies, we have strong leaders, pushing the topic, such as Kay Schiebur and Raphael Adrian Maier, bringing tech in logistics to the next level. Or Manufactum now running their sales assistant, or the teams within the OTTO.de ecommerce business with many use cases.

Q: How are you keeping an oversight on the progress in a complex organization like the Otto Group with many Group Companies?

Group companies have a high degree of freedom to run their business. This means that the Holding supports, or our service providers like Otto Group One.O, offer dedicated solutions. The final call, though, typically lies with the Group companies.

They will then report progress, mostly on a quarterly basis, to their respective board member. As in good well-oiled organizations, also at the Otto Group, a second business area is often involved, such as for digital initiatives or when logistics is relevant.

Q: How do you identify which latest digital inventions to test, invest in and enroll?

One of the holy grails of tech: which opportunity to go for? There are two guidelines I am following: I believe tech must always solve business challenges, and I believe in collaboration and testing.

That being said, besides a lot of screening in the market, any ideas or solutions needs to be vetted against the actual business problem we solve, and as mentioned above, whether we will see a return on investment or whether it’s needed for hygiene to stay competitive.

Then, partnering is key. May it be hyperscalers or startups—we need to jointly tackle a problem and craft the solutions, with an opt-out if we see that it doesn’t go far. This allows us to test the latest tech and make sound investment decisions.

Especially in Europe, I see a tendency to praise and cheer the AI developments, and then to hesitate in implementation. I encourage all tech leaders: Go abroad, understand what’s happening outside your country and outside your industry. Also, when it comes to tech, forget for a moment potential competition and let’s rather lock arms and move forward together, so that we can comprehend and apply the possibilities very fast. We may have lost the race on AI foundational models in Europe, but we must win the race for the best application of it.