Kim was director of tools at Amazon before ending her 11+ year stint at the company to start with Microsoft, where she now sits as the Chief Customer Officer. In this episode we review the Amazon ecosystem from a higher level, looking at the mindset and attitude brands should take, as well as thinking about their long term strategies.
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In this episode we discuss:
[0:21:54] George Reid: E think so. A number of different points there. Um, I think that one of the interesting ones is looking at what channels are doing well on there, looking toe focus there on a point made in the previous podcast, a car member who said it was essentially saying, looking at where Amazon are focusing their energy. So the last six years they've focused on advertising on they've launched it, and then they built it, and they've invested it. Now I'm pretty sure every 72 hours they seem to bring out a new feature on an Amazon advertising. And I'm not on Amazon advertising expert, but you could just see it like they're putting so much energy there. So therefore, it is logical for a brand to see where Amazon focusing on, put the same amount of energy, insert your advertising for argument's sake, the same with logistics. They spent so long investing logistics there, still investing logistics, and therefore it's Obviously the operational piece is something you need to invest in because it makes more sense for long term On. The same goes for Amazon at the moment you could say that they're really looking to get the grocery thing right. They keep releasing kind of the new Amazon. Go store the pay with the hand thing. All the new things they're investing in is related to grocery. Could it just be because Wal Mart is a very big compared to perhaps, But is it because they see that as being such a big channel in the future? On if anyone's got data, tow back up their decisions is going to be Amazon. Andi. They're only going to make decisions based around having data. They're not just gonna pluck it out as we know. So for anyone selling them grow through category thinking, Oh, it's fire. We'll just sell to Waitrose. Tesco's whoever it happens to be throughout Europe on that will be it done is very short sighted. If you look at where Amazon they're putting their efforts and their energy, obviously you can sell to whole foods you can get inside of Amazon go store, but they're really trying to nail that, um, online grocery market, Onda again, like Amazon fresh being a big piece of that, I remember being in the UK and so many people on our floor were invited. Lee part of that private beater Where Amazon. We're trying to get Amazon fresh, right? So they were giving employees like ВЈ50 here to go buy some food on everyone's coming in with, like, smoked salmon for breakfast and stuff like that.
[0:24:27] Kim Mathisen: It was a
[0:24:28] George Reid: Cheerios have been put in the corner. People weren't touching the porridge. It was like smoked salmon, Idaho for May. And how you eating this alarm on the fresh? Peter, You're kidding. May, um, but yeah, that was a good point. And another woman with regards to Amazon copying brands that's been going on for a long period of time with supermarket change during the same on I think you could sit there, so I like to play the Devil's Advocate. That's why I ask the questions. It's a bit mean, but still you could sit there and bleat and whinge about what a terrific Lee bad situation, how Amazon a very, very naughty. But it's not really going to change like you look at Cheerios, they still happen to do very, very well. Even though there's loads of private label Cheerios, Cheerios aren't going Ah, well, just give up. They're looking to see how they could be different, how they can build out their brand assets, and that could just be a stronger brand. Andi, I think too many people, perhaps going I'm not going to do this because Amazon will just copy it, or I'm not going to get into this because of X y Zed. Instead of just focusing on the customer and thinking, What can we do? The Amazon can't do, and that's that's a big one. Amazon do lots of things right, but because they're very large, they can't be as nimble. The customer experience perhaps, can't be quite as personalized. The subscribe and save perhaps, can't be quite a special or different or unique because they've got such a big machine working. So I would always be going kind of. What could we do that they can't do on? How can we build a stronger brand? So we're not worried about these competitors. We've got a really nice strong brand moat with repeat customers s Oh, I like the devil's advocate question, but I also do think that brands complain a lot and don't actually just focus on the customer right,
[0:26:21] Kim Mathisen: You know, I guess you could call it complaining. You know, one could appreciate where they're coming from. It's a It's a competitive, scary place out there some days, and and folks are always just trying to do the best that they can for their own businesses. And I appreciate that when you have, ah, business like Amazon that may feel very opaque to people from the outside. That feels even more scary because they won't share information with you. And so you know that can lead to a narrative that they must be doing something crazy. Um, you know, I think there's a lot of things you just mentioned in there. And one of the things I think about a lot that I see in hindsight now is what really makes Amazon successful. And therefore, you know, one of the things I think is I personally think, at least, is a good recommendation for people working with Amazon is, the more you can learn to think like an Amazonian, the better able to predict the future changes to your business, you will be as a result. And so how do you think? Like an Amazonian, there's a few key items I think will be helpful to keep in mind. First, go read the leadership principles right there, posted online. I think it's a simple is like amazon dot com slash principles. This is one of the best ways to truly understand how the people you are dealing with on the other end of the email or the phone are thinking or how they will approach a problem this internally ISS so strong from a cultural perspective that you could. So, for example, bias for action is one of the leadership principles. Customer obsession is a leadership principle to the way it kind of goes back to my comment earlier that Amazon would say what's best for customers is best for business. The leadership principles when you find them because you're I know all going to go look at amazon dot com slash principles now is actually in a particular order. Customer obsession is number one, and so you kind of get a sense for how did they prioritize what's important to them? But going back to my example, you know, you could go anywhere in the company whether it was retail or a w s or Kindle and say, You know, Hey, Kim, I don't think you're showing enough bias for action, and I would know exactly what you meant. It is a language internally that we use to communicate with one another That helps us stay on the same page about what it is that we're really looking forward from an output perspective. And so I would encourage everyone to go look at those. It does give you a glimpse into how Amazon thinks about their own business and also helpful to understand how your VM or your, you know, contact in the cellar side would help Think about the problem that that you'd ask them to solve the other two would be, um, the idea of measuring inputs vs outputs. So, you know, input being, you know, am I in stock on my item in your store? Output being revenue andan scale in automation are always gonna be priorities for Amazon to your point, right. So if you can think about those things, like what inputs are they measuring? And what outputs are they measuring? What inputs and outputs should I be measuring for my own business and then drive the heck out of those I think you'll be in good shape and that's what I would say. Start thinking like them and it will become a lot easier to understand the decisions that they're making and you'll be able to partner more closely with, um because you'll understand where those decisions and the requests are coming from.
[0:29:26] George Reid: Yeah, I completely agree. And it z interesting you mentioned when communicating with Amazon speaking in their lingo, is going to make your life a little bit easier on that could go right the way down to how you communicate with seller support on a case or when you escalate a case ensuring you're using the right terminology like I literally tell people to mention customer obsession of the custom of some sort. In pretty much most cases, they open because you know it's gonna trigger something off your I'm doing this because I'm customer obsessed or whatever is going to trigger that in the person who's on the other end of that case. The same should go if you're a vendor dealing with your band of manager communicating because it just kind of cuts through the bullshit a little bit on. But there's lots of jargon out there if you're speaking in your company jargon and Amazon speaking there as it can be quite confusing. But I think if you look at ah lot of kind of start ups in America now who have come from Amazon and how their their leadership principles or their principles or their values als kind of echo a little bit around the Amazon ones on that kind of stood the test of time is, well, eso certainly looking at a number of them and going right. How can we build this into our business? Because even if you're a small brand, you can apply a lot of them, even if it's something that's simple is like a deep dive, Or how many people don't even use the data available to make decisions. Lots of brands. How many people don't even think about the customer when they're making all these small decisions because they're looking toe save costs, whereas what does that cost saving actually mean for the UN customer? We can pass it on or whatever, Um, I think a
[0:31:11] Kim Mathisen: good example of that is even what you were speaking about earlier, like it just so happens to seem that Amazon got real interested in grocery and apparel, right? So, you know, that's not just because someone decided they liked food. Uh, there, you know, if you were If you're in a leadership position and Amazon and you're being asked to drive double digit growth year over year over year, you go where the demand is. And when you look at the market segment size of these industries, clothing and apparel are two of the largest industries out there. So if you're gonna be a trillion dollar retailer, you better be in food and clothing. If you're gonna have a chance at generating a proportionate share of wallet from your customer. And if you don't wanna be the retailer that they only go to for books or consumer electron ICS, then you have to start being top of mind for customers and the things that they're shopping for on a more frequent basis. And so from that lens, it's very unsurprising that Amazon would get into those two categories. And, you know, one of the things I really admired about the Amazon leadership when I was there was how open minded they were to new opportunities in different ways of doing business. I think the reason, personally why people say that Amazon is the biggest risk to your business at Amazon is because Amazon is willing to disrupt themselves. And to most people, that's crazy. And that's again where I think, you know, learning to think like an Amazonian is so important because the minute you think something is going really well, they're looking Thio. What's the next thing that's going to go really well in it? You know, if that happens to put this thing out of business, that's okay as long as we really believe in the next thing. And you know, that's just a different way of thinking for most brands, for most people. But that's what keeps Amazon successful and be able to be agile and adapt.
[0:32:58] George Reid: E think it comes down to, I think, Jeff had said about two years ago in a shareholder letter, which only cropped up recently. I don't read every letter and no every quote from it, but it cropped up on linked in wherever he was talking about. The size of the failure Onda failure is, or the size of the failure isn't big enough than, perhaps, you know, essentially putting enough into or you're not doubling down on the investments to improve or change will be better on. That's how many people are playing it. Too safe. Um, Andi, if you're playing it safe, obviously you're you're opening the back daughter. There's something else perhaps. Um,
[0:33:35] Kim Mathisen: well, I think the name of your podcast is also a good example of that, right? So at Amazon, it's always Day one. The reason that it's not day to, as quoted by Jeff is because Day two is Stasis, followed by a relevance followed by excruciating painful decline, followed by death from his April. I think that was 2017. It was one of the last all hands that I attended as a as an employee. Um, you know, if you if you get into the mindset that, like, yes, we finally made it, then that is a very dangerous place to be in the eyes of the Amazon leadership, because it means you aren't still striving to doom. Or and that's why it's always wanna Amazon. And the mentality of that is so strong and, you know, are the foray into Amazon's offline business is also an interesting way to think about that right, like Amazon isn't so arrogant to think that there's only one way that customers are ever going to shop. It's not obviously just going to be online. And so they're willing to invest in testing different formats, including you mentioned Amazon. Go. There's Amazon fresh grocery stores here in the Seattle area. There will be, I'm sure, other ways in which they test to see what resonates most with customers. Whether it's you know, an existing format or something entirely different, like Go. I think you'll continue to see that over time.
[0:34:54] George Reid: But again, like if you make that comparison of how Amazon go about doing that at, they're just better. Like if you look a grocery stores before, I sometimes don't want toe walk up to someone to ask where a product is. So as a result of that, Like I've got headphones in, I don't want to take them out, so I'm gonna aimlessly walk for 15 minutes until I find it then. Then they're like our We've introduced Alexa, and it's just going to tell you what I'll it's in like that. I don't think that's that clever like you asking something to a machine and it telling you on answer based on what you said. But no other company is even giving that any thought in the slightest like, How is it 2020? And that's only just being introduced when there's Bean grocery stores running for so many years and just know innovating, just rolling out the same model, doing nothing that scares them, I guess.
[0:35:47] Kim Mathisen: You know, I think that's an interesting question. And I have an interesting perspective or maybe a different perspective on it now that I have such an amazing opportunity to work with so many other companies outside of Amazon. And I would say, You know, what you're suggesting is that Amazon has the market cornered on, you know, brilliant people who can think about these things, which I don't believe is true. I think in my experience I've met dozens and dozens of really incredibly talented people at companies spanning retail, plus other industries. What I believe Amazon does that is so unique to their success. They have think big, which is of course, the leadership principle, but they also have an incredible focus on implementation and high quality execution, and that is where I see you know, a lot of people can think big and talk about what the future of this or that should be. The ability to implement that into execute the ideas is Amazon superpower. Everybody at every level is expected to both think big and execute well. And like I said to me, that's what I see the big where I see the biggest difference. It's what is your plan? You know, to quote the, you know, the famous Stephen Covey work backwards. What is the outcome that you're looking for? And then build the plan to actually deliver it and then build the team that delivers on the execution? Understand what metrics you're measuring to know if you've been successful or not, Quickly get out of it if you're not, have the courage to say this isn't working. Uh, mentioned some of the reasonably sized failures and double down fast when it ISS, and they do that incredibly well over and over and over. It's actually ah, pretty similar playbook. If you really look at it, Amazon is gonna launch something, test it, and then pretty quickly you'll see whether that's going to be a thing or not. It's ah, model that they used repeatedly because it works
[0:37:43] George Reid: that quick validation and then doubling down on that, That being said, then if you could hire just one individual because no old listeners, they're gonna be in a position where you could Dio let's get a team of 10 around this quickly and throw a couple of mill If you look smaller, Fry for a moment on, did you could hire just one person to help? But Amazon brand today. What do you think their skill set would be on do? Why?
[0:38:10] Kim Mathisen: So this is another one that's probably gonna be irritatingly like It depends, right? You're not gonna like that answer, because I know you want me to say, Oh, the one person is you need a fill in the blank for sure, right? But the truth is, at least from my point of view, it really matters where you are in your life cycle with Amazon. So are you already a vendor or a cell around Amazon? If so, are you knew, or are you established? Do you in your brand? If you're a retail vendor, do you have ah, strategic vendor service restores or on SBS relationship with Amazon or not. Do you work with a broker? Is your broker any good? You know, what's your biggest challenge with your Amazon business? Is it already going pretty well? And you want to throw some gas on the fire? Or are you struggling with high out of stocks or bad inventory placement? All of those things impact. What I would say is the most important higher for you to have, because I do think that there is a progression of building a really strong foundation of your business and then moving up from there. I think, you know, maybe asked a different way if you ask me, like, what is the one thing that people could do them, too. Give themselves a shot at being successful, I would say, Really prioritize the data and the data quality that you submit to Amazon because to your earlier point, getting the Amazon machine toe work in your favor is the best thing that you could do to drive scale across your portfolio. That means having high quality detail page content, which, by the way, people get frustrated about bad detail page content on Amazon. But they fail to recognize that a majority of that content actually comes from them. The number of time there would reach out to me and be like, Hey, you've got the bullet point description wrong on my ace in and I would go look into it and it would be like submitted by, you know, Vendor X, who also happens to be the one complaining like, Hey, you mean you know Joe so and so who at your company submitted this data last week like it's directly from you. Uh, and so you know, I think people really underestimate the impact that has on so many things. If you don't have great quality detail page information, then your items aren't surfacing as much in search. And then if you're surfacing in search, but you're you know, back end item data quality is poor. Then we may not be able to effectively get you a p o. We might be trying toe. I should say we this is a strong cultural. You know, Amazon is using the back end data to determine how many units they're going to send to you. All of that on DSO if that's incorrect and they can't even get you a P o you're frustrated. They're frustrated because they can't meet their customer needs. And all of that is being surfaced through the data that you, as a vendor or a seller, provide to Amazon. So having that accurate is like of the utmost importance from my point of view. Then once you get that right, then you can go into advertising and all of those things, right. Like it wouldn't surprise people if you heard someone say, You know, if you walked into a retail brick and mortar store and there was no product on the shelf for whatever the thing waas, would you ever invest a million dollars to drive more traffic to that offline retail store to have a customer find a blank shelf? Or they may never buy your product again because they're so frustrated that you just sent them there? Why would you do that any differently online? And it's very similar to me.
[0:41:25] George Reid: Yeah, I think I working like this simple mountain strategy of operations branding and then and then advertising on the operational plays is quite an obvious one is just like being in stock is one on Don't get me wrong, it Z. It's a nightmare for people at the moment with what's going on. Andi, order those standard recommendations off. You need to be on FB A and some capacity. Send your stock into AMAs and it'll be fine. You know, I recommended that myself. Many times. I was like, Don't worry about filling it yourself. Just lobbed into families and new good, which we've now seen isn't the best advice. George Slap on my hand. Um so those those operational base is so important because if you're not in stop, you can't be purchased. It's going to impact your sales. Frank Onda. Many knock on effects, but yeah, you're right. The advertising is a huge play now, but there's no point of sending high quality traffic somewhere with high buying intent. If you aren't able to convert that customer for whatever reason, right that zone interesting piece and that that that being said, it brings onto kind of how do you create sustainable success in Amazon right now? One of them certainly is having the advertising machine working well, having your operation set up while having a really strong brand, so you're able to convert customers and they've got all the information they need it's or anything else that stands out for you in terms of creating on the key here for me is that sustainable success. Anyone can get quick success. In my opinion, if you can throw some coin that it can get quick win. But in terms of sustainable success, what were you seeing? Some of the brands that you were working with not too long ago. What were they doing differently? What they're doing so well,
[0:43:13] Kim Mathisen: you know, I think you know, for the most part, it's helpful to remember to have patients. Amazon is a crawl, walk, run sprint business. It takes time to build presence in the algorithms. It takes time for customers to find your items. And so you really having confidence in your strategy and starting with that data quality peace, making sure that you're putting in the right amount of effort such that your catalog of items looks really exceptional online and you have confidence in that that is gonna be your baseline. So if you think about it like a pyramid, right, you wanna build your foundation, getting your data input accurate, whether your cellar or a vendor is like the foundational piece And then, you know, like you say things have changed in the world, especially because of Cove it and Amazon has pressure to and capacity and, you know, their businesses, obviously up. But getting the supply chain and logistics piece next, I think, is very, very critical to that. And if you you know, I don't know this, but let's imagine a world where Amazon says, Hey, we need you to carry an extra couple weeks of safety stock in your warehouse that's available to us within a certain tight timeframe because we can't hold it in hours. Are you ready to do that? That's like thinking ahead like an Amazon person again. You know what is the next question going to be if I want to maintain my height in stock levels? Do I have the right logistics partners? You know, I was laughing. I listened to your podcast with Glick and, like every answer was at higher supply chain manager. I hope Icahn Supply chain and I chuckled because in the very early days I used to tell people like Amazon is in a tech company. That said, It's hard. It's a supply chain company and that is the most important thing in terms of getting people what they care about quickly. So that is definitely one of those foundational layers. And then, you know, of course, you have other things you compile on there, like advertising and investment in coop, merchandizing and marketing and things that are in super important to your business on Amazon. But from a sustainable perspective, start with the basics, have patients. And, you know, I think, yeah, if you can do if you could do those things and build a respectful to a relationship with your vendor management or your cellar staff. Which, by the way, you know Amazon wants that they have no incentive to not be in good partnership with their brands because customer selection are the thing they're always going to prioritize. They want to keep your selection on the website. That is, they get measured by that as an interest. Every day,
[0:45:38] George Reid: I'm gonna say, Yeah, like the vendor managers and selling account managers, you have KP ice. We've all got targets. There's algo boss somewhere saying you need to hit this by this state. You need to achieve this like they're doing it with also your best interest at heart. A lot of the time on, got just doing it. Push you for no particular reason. They want you to do well because it looks good on them. So if you are fortunate enough, toe, have that relationship one. Cherish it and don't abuse it like they used to amaze me like we would offer a seller account manager for free, free year on. Always like chasing them up for stuff like, Let's get some more stuff into FBI because you're out of stock and they'll be like I'll come back to in a month time, George, I'm like, When are you ever going to get a free resource like me again? Like ever eso you made Cem? Yeah, brilliant points and the key term that stood out for me, it was just being exceptional on how many people probably don't use that term to describe themselves. If they're being honest with whatever they're doing in their Amazon brand is exceptional or is it? That's OK. I think that's interesting.
[0:46:58] Kim Mathisen: Well, yeah, and I think you know, just to build on your point there like this is not none of this is a secret. E Amazon has been telling brands for 20 years. Submit high quality information to us. It helps us do our job better. It helps us help you better. Like you say. I just I'm chuckling to myself because I just think about the number of times where I get, like, an angry phone call from from a vendor or a seller. It would be like, Okay. I am so sorry. Let me let me look into this for you. And the email they would send me would be like, I'm so upset that you don't have my item in stock in your store. And I'm like, OK, I don't know what your item is or they, you know, my laser level is out of stock. I'm like, Okay, you sell me 30 different? A. Since that are all laser levels. Which one are you talking about? Like just taking a step back toe This person, Imagine that this person on the other end of Amazon like this is a hard job, right? Amazon's asking these supply chain managers, vendor managers, seller managers you're managing potentially 23 4000 different vendors and over a million items in some cases. And then you get one person calling you asking you for information on their special thing. If you could just, like, take a step back or maybe absorb that for a moment and think like if I have to imagine that person on the other end of this email or phone call has literally two minutes or less to absorb my challenge and try and solve it, and I get all the information they need to be successful. I think most people would be happier with the outcomes that they get right. Like send your person the A sin. If you're gonna ask him about an item, it's what you were saying earlier about you know your recommendation for your clients when they submit tickets through Seller Central or Vendor Central. Give them the information they need to do their jobs. The more you can minimize going and having them have to go back and forth and email or on the phone with you, the more likely you already get a faster resolution to your problem because it's just the mind share of like, Gosh, I've had to email this guy three times to get this information. It can't be that important to them but this person over here, you know, provided me everything I needed and told me exactly what problem they needed me to solve. So I could go manage that and get through
[0:49:07] George Reid: it. It's It's who you're still building a relationship with a person, right? And, you know, when you were when you were in your position, I'm sure you can probably still remember now the people you enjoyed working with and when they sent you an email, maybe you didn't go for that tea break. Maybe you dealt with it straight away because they meant mawr to you on. You know, you can deny. Oh, no. We treat everyone equally, of course. But realistically, we're still people, and some people send you the email. You're you're no asking. Wait till after lunch. I'm not gonna reply to you because you put it in capitals. Um,
[0:49:41] Kim Mathisen: you know, some of the best thunder partners were folks who are willing to take risks with me. I still have super fond memories of some of the brands that I worked with at Amazon who were just so motivated. Thio be successful and to do things differently. And I remember one year I was working in the outdoor sporting goods business, and I was the what other companies would call the divisional merchandise manager the head of the buying team. And I had, you know, a couple million dollars of Pos out with one of the major providers in the space. And I was calling them because I Amazon was worried that they were going to film. I pose for the holidays and I didn't want to be out of stock, and I called their CEO. And he said, You know what, Kim? I get it. I understand why you're concerned. Um, you know, other vendors other brands might be telling you they're not going to feel europeos because they're offline retailers who, by the way, they might have been doing more business with than me at the time. Or most likely were they're calling you and telling you they're not gonna fill your pos because it's making this other retailer unhappy. And I was like, Yeah, so I'm calling, you know, I wanna make sure that you're gonna fill my pose and and this particular CEO, he said to me, You know, it's my job to worry about that I'm investing in the future growth of my business, and I believe that Amazon is a place that's going to help me grow my business. You let me worry about the like, other stuff that you can't control. I'm feeling europeos and I think back on that. And I had that experience with a few different brands over my time in different categories and the amount of courage that that takes for a business leader. Thio Dio is pretty incredible, really, and everyone talks about Amazon. But we were also equally impressed with some of our vendors and sellers like these people are smart, they're sharp, they're running multimillion dollar businesses and, you know, we want to listen to their input on how they think they could be most successful. A swell because at the end of the day, Amazon will do what's best for customers. And if you have a great idea and we haven't thought of it, tell us if you're like, as tactical or simple. Aziz Gosh, if you guys could just do X Amazon, then I wouldn't have to email you 10 times. You know, some vendor manager is gonna be thrilled about that because that means they're doing the math in their head automatically, I guarantee you. Wow, this one vendors. So they would email me 10 times less if I did this 10 times. The 4000 vendors I'm managing is a lot of my free time back. I could do a lot with that other time, right? So don't be afraid to suggest things to them or, you know, thinking that they know everything. Because that's not how most of I think the people, at least the people I used to work with, um, operated?
[0:52:26] George Reid: Yeah, like Amazon was had that thing each year was called, like to think big week or something. You may know, Was it? What was it called? The name of it.
[0:52:36] Kim Mathisen: Gosh, I don't remember, but I know you're talking about, like, the think big competition.
[0:52:40] George Reid: Yeah, it was genius genius to get some brilliant ideas of your employees on bond. I always always like I'm not giving you an idea. I want a bonus if I'm giving you an idea. But that was my lack of maturity right there back then. But it makes sense. Like if you'v
Thanks,
George
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