OCT - NOV 2023Retail Business Review8Sebastian Walter, VP Digital and Consulting, Otto GroupDECISIONS UNDER UNCERTAINTY AND HIGHEST COMPETITIVENESS ­ CAN RETAILERS STILL SET THEMSELVES APART?Could you shed light on the recent challenges in the retail industry?The key challenge these days is deciding under uncertainty. This is driven by three forces:COVID-19 lockdowns across the globe have reinforced many retail businesses to go online. Now, assuming no other dangerous mutations, the post-pandemic time is approaching. It remains unclear, to what extent customers will stay online, to what extent they will switch back into brick-and-mortar stores. Multichannel retail businesses have to balance investments between online and brick-and-mortar now ­ to meet an unclear customer behavior in the future.The recent Russian invasion in the Ukraine causes high (economic) uncertainty for the western hemisphere, with severe consequences for retail businesses. The breakdown in the consumption climate in Europe is substantial: Customers withhold planned purchases and spend less. Moreover, the supply chain for some products is hit even stronger than in the COVID-19 crises, causing ever-increasing delivery times.Lastly, continuing inflation is fueling uncertainty in markets. With higher prices, consumers sentiment and consumption behavior further decrease, causing increasing costs for retailers, forcing a reassessment of revenue and cost management.All three forces cause a highly challenging environment to make investment decisions and plan ahead.Could you walk us through the contemporary trends of eCommerce?Nowadays, for multi-category offerings, some big players such as Amazon and OTTO set the market standard as gatekeepers. Early platform providers such as eBay or Rakuten have difficulties to evolve their business model along with the changing customer needs, while providers with both a platform and an own retailing business meet customer demands best and grow well. For gatekeepers, I consider it essential to treat platform partners, i.e., brands and retailers, fairly by the platform provider. Only then, they will provide a full offer and best service on the platform. Also, customers expect a sustainable corporate behavior, meaning the platform provider should have strict and transparent sustainability requirements for their partners covering the entire value chain from production to servicing.Sebastian WalterSebastian Walter is the VP for Digital Products and Consulting at the Otto Group, a global multichannel Retail, Financial Services, and Logistics group. The Otto Group holds about 30 companies such as Crate & Barrel, About You, or Hermes Logistics. Sebastian leads the group-wide digital solutions product suite as well as the in-house consulting. Prior to his current position he was a partner at Bain & Company and a manager at Unilever. He has successfully supported many clients in their transformations and in driving digital solutions.In My Opinion
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