By establishing his mail-order company, Werner Otto wrote an important chapter in German post-war history. Within ten years, the mail-order company, whose product range consisted of just 28 pairs of shoes, had become a company with 1,000 employees and an annual turnover of DM 100 million.
At the age of 40, Werner Otto forms "Werner Otto Versandhandel" [Werner Otto Mail-Order Company] and registers it at the Hamburg State Ministry of Economy and Transport on August 17, 1949. Initially, Otto has three employees, with the company being based in two small buildings in Hamburg's Schnelsen district.
The first catalogue is produced manually and comprises 300 hand-bound copies with photos pasted into them. Twenty-eight pairs of shoes are presented on 14 pages. Following its motto 'Trust for Trust', Otto is the first mail-order company to introduce payment by invoice.
The principle of collective ordering is perfected. Customers who order collectively for their neighbours, friends, and relatives are awarded a 5 percent discount. To this day, collective orders represent an important distribution path.
In less than two years, Otto increases its turnover by a factor of five. Catalogue circulation grows to 37,000 copies.
A specialogue for young people is now published alongside the main catalogue: the Post-Shop-Magazine.
The newly founded Hanseatic Bank makes it possible for OTTO customers to make their catalogue purchases on credit. The Werner Otto Foundation to promote medical research is formed in Hamburg.
Under the leadership of the new Chairman & CEO Dr. Michael Otto, the Otto Group became the largest mail-order group in the world.
Otto buys stakes in SportScheck, Germany, and ModenMüller (today OTTO), Austria.
The Otto Group enters the Italian market with Euronova.
German reunification brings market economics to the former East Germany and leads to a rapid increase in demand. OTTO introduces 24-hour rush delivery. Otto enters the Polish market, founding Otto Poland. Otto enters the Cash & Carry sector by founding Fegro/Selgros, a joint venture with the REWE retail group.
Customers can now shop at OTTO 24/7. The Otto Group buys a majority stake in Grattan, the fourth-largest British mail-order company. VPC is founded in Portugal.
The Otto Group introduces delivery on a day nominated by the customer. OTTO becomes the first mail-order company to present its product range on an interactive CD-ROM.
Otto acquires a stake in Crate and Barrel, Chicago, Illinois. In Germany, Zara Deutschland GmbH is founded as a joint venture with the Spanish Inditex Group.
Otto Group further expanded its innovation leadership in the new millennium. The Group offers new concepts of range and product to cater flexibly to changing consumer behaviour in the retail sector: customer purchases and orders reflect their immediate needs more and more closely – garden equipment in spring, swimwear in summer, new furniture in autumn, and down jackets before the first frost strikes. The initial spread of the Internet opens up new interactive sales channels. From the beginning, the Otto Group is a ‘first mover‘ committed to technical innovations and their use in multichannel retail. Modern sales channels such as the Internet, mobile phones and TV are some of the promising tools in opening up new markets: The more diverse a vendor’s choices, the greater chance it has of reaching customers. Customers can access merchandise anytime and from anywhere.
By exporting and multiplying concepts abroad, the Otto Group also meets growing international demand – e.g. for Western fashions among price-conscious customers in Central and Eastern Europe.
The Otto Group also opens its extensive range of logistics, transport, quality assurance and design services to companies outside the group. The Otto Group now successfully does business worldwide as a provider of retail-related services to its partners.
The Otto Group Executive Board adopts a climate protection strategy designed to reduce CO2 emissions continuously, producing sustainable results. All major companies in the Otto Group are committed to reducing their transport, mobility and operations-related CO2 emissions by 50 percent by the year 2020.
The Otto Group sells its shares in the Fegro/Selgros cash & carry wholesale markets to its long-standing joint-venture partner REWE. In order to optimise item sales forecasts, the Otto Group joins forces with Physics Information Technologies (phi-t) to set up the company phi-t products & services. Another new company is eVenture Capital: by setting up the eVenture Fund 1 in November, the Otto Group creates the basis for investments in new e-commerce technologies and innovations. The US furniture and household goods chain Crate & Barrel expands to Canada. In autumn, the acquisition of a majority stake in the NaDom Group turns the Otto Group into the market leader in Russian distance selling. The historic mail-order company Schwab decides to switch from being a generalist to specialising in large sizes, and selects the Sheego brand for this purpose.
Following the successful expansion into Russia, the Otto Group is now driving forward its entry into the BRIC country Brazil to drive forward the e-commerce business in the South American country. Together with mail order company Posthaus, the Otto Group has founded DBR as a joint venture, in which the Hamburg company enjoys a slight majority shareholding.
Project A Ventures was founded in the same year by its managing directors Florian Heinemann, Uwe Horstmann, Thies Sander and Christian Weiss in cooperation with the Otto Group. The company remains the leading investor with 50 million euros of committed capital.