New Business Intelligence Platform Leads Otto Group Into the Future

For online retailers, there will be some subtle changes to their marketing programs this holiday season — driven by changing consumer behaviors — but by next year, the wave of change is expected to be so dramatic that it could sink companies that don’t react in time. The Otto Group won’t be one of them.

The Otto Group is the world’s second-largest online retailer in the B-to-C business. The company has over 54,000 employees, operations spanning 123 major companies in more than 20 countries, and sales of 12 billion euros.

Otto is well aware that the e-tail environment is changing, requiring a new approach that's more agile, automated and customer-centric. The retail conglomerate takes full advantage of advances in business intelligence, machine learning and artificial intelligence.

“Consumers, conditioned by the services of big e-tailers such as Amazon.com and Alibaba, expect to see timely recommendations and special promotions, as well as simplified site navigation and an expedited checkout process,” says Rupert Steffner, chief business intelligence platform architect, Otto. “For e-tailers like the Otto Group, the question becomes how to take these capabilities to the next level and be able to respond more quickly and specifically to the needs of an individual shopper.”

For Steffner, there are three overarching goals for the infrastructure he’s helping build: improve the company’s information capital; advance its decision quality; and increase revenues.

Achieving these goals, notes Steffner, is only possible through the effective wrangling of massive amounts of data coming in from the various channels the retailer supports, including online, mobile and physical storefronts. And this in turn requires an infrastructure that's capable of handling big data very rapidly. And by rapidly, Steffner is really talking about split seconds or real time.

“In 2014, we began to build a new BI platform from the ground up called BRAIN to gain a competitive advantage,” Steffner says. “Providing a modern and modular architecture, BRAIN delivers near- and real-time integration of big data as well as a full range of analytics.”

At the core of BRAIN is Hadoop from distributor Cloudera, and a range of big data technologies that includes MapReduce, Hive, Apache Spark, and data integration from open source vendor Talend.

The Otto Group’s approach, anchored in the multifaceted capabilities of BRAIN, goes far beyond simply streamlining the shopping experience. Rather, the customer and e-tailer are forging a new relationship where Otto's customer-facing system is accepted as a friend and shopping companion.

This requires, as a baseline, the processing of big data at high speed. A series of steps follow to shape and personalize the shopping experience for the individual customer. First, an automated decision-making process is used to give a “score” to each shopper (e.g., customer conversion propensity). The calculated scores or metrics are then used to trigger an action based on a pre-defined set of rules. In a reactive approach, the score and contextual information (e.g., customer preferences for categories, brands, price points) are sent back to the customer interaction touchpoint — website, ad server, call center, etc. Additionally, a real-time dashboard is used to report the decision parameters and its quality, along with customer interaction metrics. Impressively, all of this can happen in the blink of an eye.

The ability to handle real-time big data or turn massive volumes of data into instant insight and actions is the future of retail. So while perhaps this year it will still be all about satisfying your desire for a great deal, next year systems like BRAIN will undoubtedly be able to tap far deeper emotions.

Ashley Stirrup is the chief marketing officer of Talend, a software vendor that specializes in big data integration.