Hamburg at the headquarters of the Group Otto 14

Distance selling is, traditionally, one of the strengths of the German distribution. The main operators in the sector are supported for very many years a very promising to grow and become "champions" on the international scene, to the point that Otto and Neckermann-what groups are now respectively number domestic market world and number two.

According to the Bundesverband des Deutschen Versandhandels (BVH), the Professional Federation installed in Frankfurt am Main, 52 million Germans resorted to selling distance to some of their purchases. In 2005, the sector represented a global turnover of less than EUR 26.3 billion. Textile and footwear products participate for half, 12.2 billion, and the companies in this sector "realize 21 of all sales by the DVA", said Rolf Schäfer, the President of the BVH.

In 2006, distance selling has benefited from the rebound of the German economy and some restart of household consumption. "Where a growth of about 3 of the turnover accumulated specialized companies," explains Dorothee Hoffmann, the head of marketing of the Federation. But, as all of the distribution, the VAD likely know a year 2007 particularly difficult.

Find other engines

The Government coalition headed by Angela Merkel has indeed decided to increase the tax to the added value (VAT) of 3 from January 1. This decision political, controversial, may slow growth and especially to encourage households to reduce their consumption.

Hamburg, at the headquarters of the Group Otto (14.6 billion euros in sales, half of them international, employees 54.000), officials are determined to respond and find other engines of growth. As sales catalogue (20 million copies a year) fell by more than 6 in the last year.

Austerity plan

Michael Otto, Chairman of the Board, sixty-three years, did not wait this shortness of breath to launch his group in teleshopping and especially the trade via the Internet. The hamburger giant said today as the second seller online in the world, after Amazon. "In three or four years, we should make more than 20 of our total turnover by this channel", provides the boss of the family group.

To be less dependent on distance selling, Otto has also decided to develop several chains of stores in its home market. Two shops myToys, offering toys and clothes for children, are thus open to Kassel and Worms. If the experiment proves successful, others will emerge.

The approach is the same for another sign, called "Lascana", specialized in the commercialization of women's lingerie and swimwear. The first shop opened late September in a mall connected to Hamburg. The Directorate does not have a hundred in the relatively near future in Germany with purpose, support and complement the distance of this type of articles sales.

The situation of how-Neckermann, the other large German operator in the sector, is more delicate, because of the difficulties of its parent, KarstadtQuelle. Despite its omnipresence in advertising in the German periodical press currently, this large group of VAD (6.5 billion euros in sales in 2005, the third international, 23.400 employees) crosses a tormented period. In the first half of 2006, sales fell by more than 12. Thomas Minister, the pattern of KarstadQuelle, decided to implement a recovery plan, the key, a new reduction of the workforce and a reduction of at least 20 of the pagination of the catalog from 10 million copies each year.

The austerity plan, which is expected to cost at least EUR 200 million, will be completed by a rise of online sales (last year, Internet orders accounted for EUR 1.3 billion, and each month, 9 million pages are viewed by users) and trademark of the group in Central and Eastern Europe.

Present in 18 countries, what and Neckermann are indeed a spectacular breakthrough. Marc Sommer, Dirk Seifert, the Directors General of what GmbH, are determined to put even more emphasis on these markets, definitely more than that of the reunited Germany.