Inspiring customers
AI commerce at OTTO
For years, online retail followed fixed patterns: anyone wanting to buy something would type in search terms, adjust filters, click on various links and wade through a slew of information. Users were forced to learn to think like a database. But the emergence of generative AI systems has created fundamental change: digital assistants that understand natural language and make suitable recommendations have become an integral part of our digital world. It is a step towards more personalized shopping that responds to individual customer needs.
Fundamental change
OTTO has been using artificial intelligence (AI) for more than 15 years and has integrated the technology into all value streams. The latest technological advances chart the shift towards what is called AI commerce. This refers to the use of generative AI along the entire customer journey – from inspiration and orientation to advice, the purchasing process and after-sales services, that is, the services and measures that a company provides after the sale of a product or service.
We are facing a paradigm shift in digital retail.
AI is now becoming a connecting link that makes the shopping experiences smarter, more personal and more holistic. OTTO CEO Dr. Boris Ewenstein describes the starting situation: “We are facing a paradigm shift in digital retail. Not only is AI commerce transforming how people search and buy, it is also fundamentally changing the way we gain access to customers. So what does this mean for us at OTTO? We need to rethink customer centricity in a way that is data-driven, dialog-oriented and consistent along the entire customer journey.“
Smart shopping in practice
AI commerce is not a distant vision of the future, but a development that has already begun. Step by step, functions are being developed that leave classic keyword searches trailing far behind: “Developed in collaboration with Google, our new AI assistant creates a natural, dialog-based shopping experience that for the first time feels like a real conversation – just like in a specialist shop. At the same time, we use a new and proprietary AI solution that reliably resolves issues relating to deliveries, invoices and returns. This is yet another way in which we support customers with service requests. Together, these two assistants make shopping at OTTO more personal, faster and smarter than ever before,” says Boris Ewenstein to describe the new AI assistants that are incorporated into the OTTO app.
I would be happy to help you find the right fridge. First of all, we should clarify how many people live in your household and whether you are looking for a freestanding or built-in refrigerator.
All right, for 3-4 people I recommend a model with a usable capacity of 250 to 349 liters.
Next, it is important to know whether you are looking for a freestanding fridge or a built-in model. Do you already have a preference?
All right, for 3-4 people you are looking for a freestanding fridge with a usable capacity of 250 to 349 liters.
To narrow down your selection a little more, it would be good to know whether you are looking for specific features.
For example:
Instead of the usual procedure with individual search terms and filters, customers can now describe their concerns with more precise descriptions in natural language to receive advice from AI assistants. The dialog between customers and the AI assistant enables quick support even for products that require a lot of advice, such as a washing machine or refrigerator. The system understands questions and descriptions, asks questions and guides customers through the selection process.
Product recommendations can then be provided in real time to match individual customer requirements and offer them more certainty in the decision-making process. Interaction with these OTTO AI assistants takes place in the familiar and trusted OTTO environment. The result is a symbiosis of AI-powered innovation with the usual strengths of the OTTO brand.
A strong strategic position moving forward
Developments in AI commerce are transforming AI-powered systems into central access points where customers make their decisions – regardless of whether they visit a platform directly or are guided there by external AI assistants. OTTO is therefore called upon to establish the technological and strategic structures to ensure visibility in these new customer journeys.
At the same time, OTTO is strengthening its own platform as a central touchpoint – for customers to obtain access to advice and services, and for partners to offer their brands and products in a high-quality sales environment, including complementary logistics and payment services.
In a commerce environment shaped by AI, it is more important than ever before to be machine-readable.
Frederike Del Castillo, Head of Insights Management at OTTO, explains: “In a commerce environment shaped by AI, it is more important than ever before to be machine-readable. AI systems can only correctly recognize our products and services and include them in their responses if the underlying data is clearly structured and consistent. At the same time, it is important that we continuously strengthen our technical capabilities in order to constantly develop the customer shopping experience on OTTO as a relevant destination.“
One thing is clear: technologies, customer behavior and market mechanisms are evolving at a dizzying pace. This is why OTTO's tech and AI strategy is continuously and systematically aligned with the market. We also identify fresh opportunities and realign our priorities as required. By doing so, the company ensures that it not only keeps pace with this paradigm shift but also actively shapes it.
