Digitec turns 25: «Manufacturers like to make up fancy names to protect themselves from the competition»
To mark Digitec’s 25th birthday, we invited co-founder Oliver Herren onto our podcast A Tech Affair. He spoke about the the Community’s influence, Migros’ majority share and why one in ten Galaxus employees work in IT.
On 8 May 2001, digitec.ch went live. Since then, the online shop has become a household name in Switzerland. With the expansion of Galaxus, it’s also established itself in Germany. To celebrate the occasion, we invited Oliver Herren, one of the three co-founders, to join us on the podcast.
The CIO still remembers clearly how it all began. At the time, running their own shop was merely a means to an end. The trio, consisting of Florian Teuteberg (CEO), Marcel Dobler (no longer with the company) and Oliver, had other plans. They wanted to open their own club. All they had to do was sell enough PCs to raise the necessary seed money. «We ended up sticking with the shop. It seemed like the better idea.» Although they’d have the funds today, the focus has shifted. Throwing summer and winter parties, which are attended by hundreds of Digitec Galaxus employees, has proved to be a good alternative. You can listen to the full interview in Swiss German here.
Honesty not everyone appreciates
Transparency is key at Digitec and Galaxus. While the Community generally appreciates the company’s ad campaigns, editorial content and features including price and return rate trends, manufacturers aren’t always impressed. «The larger the manufacturer, the more likely they are to try to prevent their products from being compared to others. That’s why they come up with fancy made-up names like Super Black Trinitron.» It’s a way of protecting themselves from the competition – even if they’re using the exact same technology in their products.
Occasionally, even people who work at Digitec Galaxus are bothered by our honest approach. «I’m always surprised when an employee asks, ‘Why are we writing negative things about a product? We need to sell it, don’t we?’» But that’s precisely part of Digitec’s DNA – being a bit of a pirate. In fact, «piratesque» is one of the company values. «It’s important to us that everyone maintains their own perspective as an individual. Staying critical and being honest about whether something truly adds value for customers, employees or the company.»
Source: Christian Heldstab
Galaxus and Migros
A pivotal moment in the company’s history occurred in 2012. That’s when galaxus.ch, with its wide range of products, went live. The company was only able to pull this off with the help of a partner, which they found in Migros. The cooperative now owns 70 per cent of Digitec Galaxus AG. Both the Community and employees often want to know just how much influence Switzerland’s leading retailer has on daily operations. «None at all. We’re still very much Digitec Galaxus and have a great deal of autonomy.» The idea is for Migros to remain in its role as a partner and investor who’s nice to work with.
However, Oliver has no illusions about why Migros gives Digitec Galaxus so much freedom. «I’m pretty sure things would be different if things weren’t running as smoothly. The autonomy we’ve been given is closely linked to our success.»
The birth of Galaxus was soon followed by an expansion into Germany. The declared objective is to become the number-two online retailer there. Currently, however, galaxus.de is ranked 30th. Despite this, Oliver’s feeling confident. «If everything goes to plan, we’ll reach our goal within the next five years.» Galaxus Deutschland entered a tough environment from the get-go – and not just because of market leader Amazon. «I was surprised by the pushback from manufacturers. After all, having more alternatives to Amazon makes sense from a rational point of view. We’re very cooperative, whereas Amazon wants to extract as much money from the market as possible, which is typical of a US company.» Amazon also reportedly pressured manufacturers into not supplying Galaxus. «Our expansion would be happening much faster if everyone charged the same buying prices, because ours is the better shop with a better customer experience. Though maybe I’m a little biased on that front.»
Do it yourself
Then there’s Oliver’s area of expertise: software development. Most of our systems are developed in-house, with over 400 people working on them. That’s roughly ten per cent of the workforce. Oliver believes that this helps us meet customer needs better and faster. Not to mention that existing solutions simply didn’t cut it. «If we’d purchased our software, the online shop as we know it today – with its product filters, partial automation and so on – wouldn’t have been possible to build.»
The one area where Oliver reluctantly accepts third-party software is our HR tool – but only because we generally only need it once a year. «SuccessFactors is appalling. There’s no way we’d expect our employees or customers to put up with something like that on a daily basis.» However, as long as pay raises are approved via the tool, the complaints are likely to remain at a minimum.
The Swiss-German podcast and video with the full interview are available on all major podcast platforms and on YouTube.
As a child, I wasn't allowed to have any consoles. It was only with the arrival of the family's 486 PC that the magical world of gaming opened up to me. Today, I'm overcompensating accordingly. Only a lack of time and money prevents me from trying out every game there is and decorating my shelf with rare retro consoles.
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