Published on: March 19, 2025 / Updated on: March 19, 2025 – Author: Konrad Wolfenstein
Artificial Intelligence: The path from isolated solutions to an integrated digital AI strategy – Image: Xpert.Digital
How the Otto Group strategically uses artificial intelligence in e-commerce
AI technologies at Otto: A game changer for customers and processes
The Otto Group has become a pioneer in the use of artificial intelligence (AI) in e-commerce in recent years. The company relies on a strategic approach rather than uncoordinated, isolated solutions. The systematic integration of AI technologies into the business model not only improves the customer experience but also optimizes internal processes and strengthens the company's long-term competitiveness.
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From individual initiatives to a group-wide AI strategy
Like many other companies, the Otto Group began with initial AI projects limited to individual business units. However, from this experimental phase, the company consciously evolved towards a comprehensive, strategic approach. Dr. Sebastian Walter, VP Digital & Consulting at the Otto Group, describes the dynamics behind this transformation and the technological progress as exceptionally rapid. He emphasizes that while it is a typical hype cycle, as with many innovative technologies, this one is unfolding much faster. He anticipates widespread integration of AI applications into daily operations within two to three years. This transition underscores the significant progress the Otto Group has made in the field of artificial intelligence.
The key insight here is that AI is not an end in itself, but must always serve the customer. The company's goal is to remain a "customer-first company" and to use artificial intelligence responsibly and always in the best interests of its customers and employees. This consistent customer focus forms the core of its AI strategy.
The Otto Group focuses its AI innovations on six strategic areas: marketing, product development, logistics, customer care, individual productivity, and improving the customer experience. This clear prioritization enables the efficient use of resources and the achievement of measurable business results.
One.O: Central platform for AI innovations
A key component of the AI strategy is the establishment of Otto Group One.O, a central service provider for technology and strategy consulting with a special focus on AI. One.O combines the existing tech and consulting expertise of OSP – Otto Group Solution Provider, Otto Group IT, and the Digital & Consulting division under one roof.
The new company is led by Katrin Behrens and Stefan Borsutzky, who previously served as managing directors of OSP. Dr. Steffen Tomschke, formerly with OSP and now with One.O, plays a key role in implementing the AI strategy as Business Innovation Manager.
Tomschke highlights the importance of AI systems that are both transparent and ethically sound, emphasizing how crucial their development and integration are for revolutionizing e-commerce. The goal is to enable companies to offer their customers unique and innovative services through the use of such technologies.
Concrete AI applications in practice
The Otto Group demonstrates its AI strategy using concrete use cases from various group companies:
Manufactum: Virtual Shopping Advisor
Manufactum has developed an AI-based "shopping advisor" that digitally replicates the high level of expertise found in its brick-and-mortar stores. App users can ask questions in natural language and receive personalized product recommendations. Alexander Peters, Managing Director of Manufactum, explains: "For example, a customer might ask, 'I want to make applesauce. What's the best way to purée it?' The virtual shopping advisor picks up on this question and then provides advice just like in a human consultation.".
Witt Group: AI for optimized search engine ranking
The Witt Group, specializing in fashion for the 50+ generation, uses generative AI to increase the visibility of its products in search engines. By analyzing existing product data and SEO databases, the company identifies relevant search terms that have previously gone unused, such as "mother of the bride dresses." The AI then automatically generates search engine optimized product descriptions, which are regularly integrated into the webshop's content management system.
Bonprix: AI-powered product development
Bonprix's "Fashion Creation App" aims to digitize the entire product development process. The application uses generative AI to support product managers during the time-consuming and research-intensive design phase. Based on text input and uploaded images or sketches, the app generates photorealistic design proposals. This significantly accelerates the design process and reduces time-consuming research.
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ogGPT: Internal chatbot for employees
At the end of September 2023, the Otto Group launched its own internal, secure, and data protection-compliant chatbot, based on OpenAI's ChatGPT technology and Microsoft's Azure OpenAI service. ChatGPT is available to approximately 26,000 of the Group's employees in the DACH region and was used by more than 4,200 employees in its first week.
Challenges in AI implementation
Implementing a comprehensive AI strategy was not without its challenges for the Otto Group. Interestingly, the biggest challenge lay not in the technology itself, but in the company culture.
Olaf Schlüter, Head of E-Commerce at OTTO, explained that the technology itself wasn't the biggest challenge during implementation, as one might assume. Rather, the real difficulty lay in the cultural adjustment within the company, in dealing with the feeling of "loss of control." Before the rollout, employees could intervene and take control in many processes. However, when everything is left to a self-learning algorithm, processes and results become harder for them to understand and less predictable.
This finding highlights that a successful AI transformation requires consideration not only of technological aspects, but also of cultural change within the company.
The vision: Ethical AI for better customer experiences
The AI strategy Otto Group follows a clearly defined vision, described by Katrin Behrens, CEO of OSP (now Otto Group one.O): "Our vision is to support companies with transparent AI systems to create unique shopping experiences for their customers. Collaboration within the IPAI community enriches this process and allows us to participate in impactful projects and innovations."
This vision underscores that the focus of the AI strategy is not on the technology itself, but on the added value for customers and business processes. Transparency and ethical principles form the basis for trustworthy AI applications.
Strategic use of AI as a competitive advantage
The Otto Group has successfully transitioned from individual AI tools to a comprehensive strategy. By pooling expertise in Otto Group One.O, implementing AI in six strategic areas, and consistently focusing on customer value, the company is leveraging AI as a competitive advantage.
The Group's experience shows that the successful use of AI depends not only on technological implementation, but also on cultural change within the company and a strategic focus on customer needs. With this holistic approach, the Otto Group is positioning itself as a pioneer in AI for e-commerce and laying the foundation for sustainable innovation and growth.
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