While the German Retail Association (HDE) does not expect any major positive impulses from the recently started Christmas business, Otto CEO Marc Opelt is “cautiously optimistic” about the pre-Christmas period, which is crucial for retail.
“2023 was not an easy year for online retail. We now expect a slight recovery for the Christmas business,” said Opelt in a statement from the retail group on Tuesday. Despite falling per capita spending, the managing director expects a slight increase in sales compared to the previous year. The main reason for this is the increasing number of orders, because while on average around seven percent less is spent per person, Otto records around 14 percent more orders in total. The bottom line is that there are slight gains in market share, with Opelt citing the group’s platform business model as the most important growth driver.
Extended return policy and Black Friday
Otto’s business could also benefit from the extended return period for all purchases from November. These can be exchanged or refunded until January 31, 2024, which means the group is also taking advantage of the Black Friday promotional period. Black Friday and the surrounding two weeks are the busiest days in the Christmas business, and due to the current socio-economic situation, these discount days are more important than ever.
“In economically challenging times, consumers’ price sensitivity increases,” says Opelt. “That’s why offers like Black Friday are particularly important this Christmas season. This year, more than ever, I expect a flood of offers in online retail.”
In addition to classic Christmas gifts such as technology and multimedia items, Otto says fashionable items such as winter-friendly jackets and shoes are very popular. The demand for jackets increased by 45 percent compared to the previous year, and shoes by 35 percent. The demand for smartwatches has also seen a huge increase, increasing by 280 percent compared to the previous year.