Episode 18: Kim Mathisen

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.

In this episode we discuss:

  • Which platform might be best for you as a brand, vendor or seller.
  • Why you must be building strategies for both online and offline
  • How you can learn from Amazon and implement their leadership principles into your business
  • Understanding where Amazon’s focus is and why that’s important

You can check Kim out on LinkedIn here.

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Click here for the RAW unedited transcript
[0:00:00] George Reid: welcome to It’s Always Day One. My name is George Reid, a former Amazonian turned Amazon consultant. Each week on the podcast, you’re gonna hit industry experts. Brand owners on Amazon employees share their answers to the basic yet fundamental questions you should be asking yourself about your Amazon business. Now let’s jump in on all your live. Hello, Kim. Thank you so much for joining me on the podcast today. I mean, really look forward to having you on joining. Give us a bit of, ah, background about who you are, what you do, how you got into the Amazon and now Microsoft World. And we can then hopefully fire some fun questions towards you.

[0:00:39] Kim Mathisen: Sounds great. Thank you for having me. So I am currently chief customer officer for Microsoft’s Business Applications Solutions team. In my current day job, I spend most of my days working with large multinational corporations, companies that you’ve definitely heard of. My job is to understand their high pry challenges and then to partner with them to enable them Visa V. Of course, Microsoft’s portfolio of software solutions to those problems. So if that sounds like sort of corporate mumbo jumbo, what That really means is, um, let’s say I, my partner with a customer in the retail space they one of their biggest challenges might be They don’t have a current way to do a ship to store capability or curbside pickup capability, for example. So I might work to understand that, and then help to connect them internally with the right software of Microsoft that would enable them to deliver those capabilities for their customers and then prior to Microsoft, which is what I think you’re most interested in. I worked at Amazon for 11.5 years, and when I left there, it was category leader or director for the U. S Tools business. So garage storage handed power tools. Um, and that means that I ran the piano for that business oversaw vendor relationships, pricing an assortment strategy. The third party marketplace within my category. A swell as our customer experience in marketing and over my whole time there I worked across books, grocery, sporting goods, outdoor sports and, of course, so lots of changes. I’m sure you know, it’s pretty typical for people in Amazon to rotate into new roles or business areas every 18 to 24 months, and I was no exception to that. I also managed across all the functional areas. So vendor management in stock management marketing, their party etcetera. So, yeah,

[0:02:28] George Reid: such such a variety that I’m like you used to look at that 11 year history. Amazon on Linked in It’s fascinating because you spent some time in Germany as well. You worked in the vendor side for such a long period. I remember David Glick, who kindly put me in touch of you, saying that you would. One of your largest achievements was how the whole retail businesses manages the whole. Because I know when I was at Amazon, I was on the three p side on by partner. She’s on the vendor side on. It was always this interesting battle that we used tohave with vendor off what was best for the customer in this case, being the brand of should it go to vendor, should it go to seller? Remember David mentioning you played quite a key role and how that was divvied up and how the organization worked. Would you mind check about that a little bit? Have I got that right? Pretty shocking. That right.

[0:03:23] Kim Mathisen: So That’s very gracious of Dave to say. It certainly wasn’t the only one who had a point of view on on this at at Amazon, for sure. But as you know as a vendor manager, as a micro era Microsoft as an Amazon employee, you know all of us were making decisions quite frequently, if not every day on How do we better serve our customer? And what is the right way to do that? That also maximizes value for the brand? So, you know, we A, of course, have end consumers like you and I that our customers. But one of the things we thought about a lot of Amazon was also our brands, and our sellers are also our customers and equally, you know, important to the to the overall business into our ability to serve and customers. So, you know, to answer your question, I think we did think a lot about how do you make the right business decision or help a seller. For example, a brand facilitated the right decision for them on whether it would be better for them to be in the in the retail marketplace or the third party marketplace. Um, but There was no hard and fast rule on that at the time that I was there.

[0:04:30] George Reid: MM onboard. I think it’s It’s certainly a question. I get a lot from people off on. The relationship between the two is certainly emerging more and more now. But traditionally, do you think there’s a point? Because I’ve always worked out Based on my experience and the context, I still have Amazon. The conversations I have off if you’re a very, very large brand, a multinational vendor certainly offers MAWR opportunity, perhaps, or perhaps usually going to be a better solution for you. But unless you’re a that high street name, I’ve always thought Seller provides a better opportunity. Do you? Do you have any thoughts out now, having left of what advice would you give to brands?

[0:05:19] Kim Mathisen: You know, I think of the frustrating answer to that is it depends eso Certainly if you’re of ah, you know, multinational size, it’s frankly probably easy, easier for you to have a direct relationship with Amazon as a vendor. That said, there’s a number of different considerations I would think through if I were if I were a brand and trying to decide if that was, you know, which would be the best path for me. And by the way, in some time you may not actually have a choice. Amazon may force you to start in one place or the other if you want to be on their platform. And I’m not an expert in where that is in the process right now. But, you know, I think I would be thinking about how sophisticated is my current operation. Do I have a capability to fulfill customer orders myself? Um, you know, not all brands, depending on their size, have those capabilities, the supply chain and logistics requirements to be able to enable that, you know, are not a thing that all brands have. And so if I were, if I were deficient in that area, I might think it would be easier for me to send a P O into Amazon and let them deal with all of the end to customer fulfillment. I would also be thinking about different opportunities that depending on the size of your brand, you know, some capabilities are available to sellers, not vendors, and vice versa. So if you remember back in the old days, it used to be a thing that Onley sellers actually had access to sponsor. That’s which has changed now. But those things will constantly be changing. And so depending on what you’re trying to deliver for your brand and what you think, the best approach is that whether you’re a seller or a vendor may actually impact that.

[0:07:01] George Reid: Hmm, It certainly shouldn’t be a rush decision. I think it’s not just looking at your fulfillment and logistic capabilities. I think it’s also looking at your organizational structure, the team that you cannot play there. Do they have a strong understanding on ability? Toe Learn the Amazon platform. If they don’t, you would argue that perhaps the vendor might be more suitable because you don’t have to think about the logistics side as much. You can just focus, perhaps on the merchandizing on you’re gonna have your hand held a little bit. Mawr. If you’re obviously working very closely of Amazon, you’re going to get those tips. You’re going to get support from their tenderizing, whereas if you’ve got a really strong team, um perhaps then the seller sides better because you can control your brand a little bit more, whereas obviously passing over to Amazon, you can lose a little bit of control of your brand. Particularly comes to things like pricing, etcetera. Um, so it z such an interesting piece. But I think Maura Maura, What I see now is the platforms kind of emerging quite a few people doing a bit of both on. But the functionality is certainly emerging as well. By the advertising is a separate console from what it used to be. A but it’s interesting to see kind of they’re slowly coming together on bond. I think a lot of vendors, they’re just going cell is gonna be easier for now on the big boys. They’re kind of just playing on the underside. What do you think is going to go in the future that do you think the platforms will merge Mawr and Mawr? There’ll be, um, or brands going kind of a one size doesn’t fit all approach and go. We do a bit of both. Or,

[0:08:45] Kim Mathisen: you know, I also caveat I have no insider knowledge in this, So this is just, you know, the personal opinion of Kim, but I think it’s hard to imagine that it wouldn’t be that way that it wouldn’t some hybrid approach from my perspective, I mean, I think if you look at the changing needs of the business and even the way just Cove, it has impacted Amazon and us as consumers there, you know, capacity. Even though online has more of it, you could argue than brick and mortar, depending on how you look at that. Inasmuch as Amazon doesn’t have the like, you know, thousands of retail stores that could also be fulfillment centers like a brick and mortar does but has an incredible amount of capacity, obviously, in their online network, you know, you could imagine a world where that could make sense for Amazon as well. And sellers ability to deliver The real thing is customer experience, right? So if Amazon feels confident that you as a seller can deliver the ship, promise that they can on the top selling item and they still have an opportunity to partner with you on, you know your different portfolio strategy or pricing strategies, etcetera, then you know if they don’t have capacity for all of that inventory in their warehouse is it would make sense for them to still enable you as a seller to sell it to their customers.

[0:09:56] George Reid: Yeah, I completely agree with that. Obviously, that really ties into selection. But I guess my follow up question would be on. There’s a lot of, AH lot of conversations happening on linked in and all over the media right now about the amount of data that Amazon obviously collects. How much of a threat do you think Amazon should be viewed? As for big brands and as they get closer and closer to Amazon, Do you see Amazon is a threat in that perspective? Or do you think brand should not worry about that? I just continue to do a really good job from the customer side of things.

[0:10:34] Kim Mathisen: I think brands like everyone, including Amazon, have to be focused on what is best for the customer, and that will drive a lot of the decision making. So I going to say that I don’t think there’s, you know, people should just be like I’ll do whatever Amazon says without thinking twice about it. Certainly not right. Everyone has to make their own business decisions. Um, and at the same time, I think you know, one of the things that I haven’t heard in the past that makes a lot of brands nervous is things like, You know, I’m going to lose control of pricing or I’m going to lose control of my detail page all of that. It depends on the lens with what you’re looking at it. So, for example, in in the pricing sphere, you know Amazon’s pricing is price matching, often other, you know, competitive retail offers. And so if you’re saying that Amazon is eroding your price, that means that somewhere else in the market segment your price has already been eroded and you just didn’t know it. Amazon Onley bringing attention to that by by being visible on their website, but it’s very rare. It’s a very rare occasion, safer things like, you know, when they have negotiated with you directly for prime day or black Friday on a special by that, that they would be driving that if they weren’t in some sort of Overstock situation that you knew about you were working with them on, and so I always found it difficult when I was in my positions and vendor management and category leadership when brands would come to me and say, Hey, you know you guys were driving my price down. I’ve got you know, this offline retailers calling me complaining that your price is so low and I’m like, Okay, you guys need to have a better control over what your product is actually priced out in the market because if you knew that, then you’d see where this was coming from. And so you know, often that’s a hard message to here, and and brands would say, Well, it’s impossible for us to go check that. But if you’re really tight on your distribution strategy and you know where you’re selling your product, it’s usually pretty easy to clean that up. Where I saw it, being more of an issue was when you know brands because, you know, for any number of even maybe they had excess inventory. And so they sold it to a distributor for a deal. They see that inventory pop up in other places, and it’s a little cheaper than maybe they would like. And the you know, whoever ended up selling it was passing through that discount to the customer to try and drive demand just totally reasonable approach. But then Amazon Price matches that price and the vent vendor doesn’t like it. So you know it. Zits tough. It’s tough being a brand, Um, but I find that Amazon is in my experience, I would say Amazon’s a really good partner if you work really well with them. And one of the things I see ah lot that I think is detrimental from a mindset perspective is that you know your offline strategies will work the same way and deliver the same outcomes online on that’s Ah, that’s Ah, it’s a difficult mindset, you know, in the grand scheme of things, Amazon is, you know, based on the data that’s out there, a meaningful percent of online sales, but e commerce in general still a smaller portion of the total retail landscape globally. And so it’s easy to get into the mindset that like, Well, I’m doing the majority of my business offline, and I’ll just use those same strategies online at Amazon and they don’t translate. And then you see people get frustrated, Um, that, you know, hey, my, my Amazon persons not listening to me, But I would encourage folks to think, maybe think a little more like an Amazonian. In that case, and be flexible on bring curiosity to the ways that they’re asking you to do things

[0:14:11] George Reid: on. I think you make a really good point. And it’s something I touched upon my last podcast, which should come out probably today with a guy called Jason. He was saying, You know, Amazon there about 50% of online sales at the moment in the U. S. But a za percentage of the whole pie of retail e commerce only represent about 20%. So Amazon, therefore you do. The math is around about 10% for argument’s sake, so they’re obviously have massive penetration. But for those people who are going on, all of our, you know, uh, girlfriend sister works at Unilever and have conversations with her on Bond, they’re going well. I’m not really focusing too much on Amazon because we just care about doing off right stuff. That’s that’s perfectly valid. But then they’re just not giving it the attention it deserves because that 10% solely becomes 15 20 so on on. They’re not giving it that resource it requires, and they’re going. We’re looking very short term at the moment, particularly with what’s going on at the moment. If that’s not a big fish slap to the face off. Focus more on line because people aren’t able to go to the supermarket is much. Sometimes the supermarkets are even open at the moment. What are you doing online? How you building those relationships? But it’s a very interesting pieces well, that you mentioned about controlling your distribution on. That’s something so many brands struggle with its all Amazon. Ultimately you’re doing is it’s not your vendor manager. It’s a machine in the background that’s much more intelligent than any of us that’s pulling data points from all over the Web. And they just happen to go well, someone selling over there a cheaper price. So we just matched it. So you’re right is controlling that distribution. But the same token. I know there are other things. There was a great example of a world birds the Marino shoes in New Zealand, well, Amazon, but perhaps accused of being a little bit naughty, shall we say, with how they copied some of their ideas. What do you think of how big do you think of a threat that is for brands coming on traumas in utilizing the platform building themselves something really, really strong on then, obviously, Amazon going. That could be something of interest to us, because we can do it on. We can offer it to a much better price of the customer, which in theory, is customer obsession. Great product, very popular, delivering it a better price, a customer. Good work. In theory, it takes off some of the leadership principles on the customers happy. But long term is that the best for business? Perhaps? No. A za hole because you can look at those smaller brands and going, Are they going to continuously generate new ideas? Maybe not if this like, it’s too big. Um, so I think that’s if if you’ve listened to any of the previous podcast is being very interesting. So I asked a question all the time. What’s the biggest threat when brand selling on Amazon on day? 50% of people in China 50% of people are Amazon. It’s, um, capacity. Do you think brand should be concerned about Amazon copying their products, or do you think it’s not really a big focus of theirs? If you give if you imagine that, I think they’ve got 270 or so brands. If you compare that to how many products were out there, it’s such a tiny percentage, right?

[0:17:46] Kim Mathisen: Yeah. So a couple things I had comment on in their first for your friend at Unilever, I might suggest a different approach to paying attention. Toe online versus offline. Despite that small percentage, um, you know, one of the the anecdotes that I used to hear a lot It worked in the grocery business at Amazon from, I think, roughly, like 2000 and 10 to 2000 and 13 and we would have conversations and and remind you this is the time when most people at the bigger CPG companies would laugh us out of the room like no one’s ever gonna buy food online. You guys a ridiculous. You know, a lot of my job was helping under people understand the opportunity and and how we’re going to continue to drive quality and customer execution or customer satisfaction through high quality execution. And, you know, because it’s very different if you’re shipping somebody something they’re gonna ingest in their body, there’s a different level of care. You take, uh, such that you know, you can provide that customer trust. So point being we would have these conversations and some would laugh us out of the room and others would say I get it. This is a different channel in a different model and we’re not gonna miss it again. And you may be familiar with I don’t know if it’s in Australia, actually, but in the US, we have this big retail chain, Costco. Costco is Ah, you know Ah, wholesale retailer. They have warehouse stores across the U. S. Some in Europe. They sell about 4000 unique items, or so So I understand in their warehouse at any one time. And and their business is, you know, early days people like no one’s gonna ever buy in that format very similar to what we heard in the early days of grocery. No one’s ever gonna buy food online. Or people used to say no one’s ever gonna buy clothing online If you can’t try it on and such right? Onda, What we heard time and time again from the brands was will never make that mistake again. We didn’t. We underestimated customers desire for better pricing or the ability to buy in bulk, and we really missed an opportunity. And it took us, you know, 10 years to finally get in in with Costco or we never have. And we’ve never recovered our market segment share as a result of losing that business. And I think you know Amazon or online e commerce in in a way is very similar to that, such that you have to be constantly thinking about how customer behavior is changing and are you keeping up with that? I would look more at growth and how fast a channel or a retailer is growing, obviously have to balance that against where’s the bulk of your business today? But if you see that certain channels or retailers are growing very quickly, I would definitely be paying attention to that andan. Another thing you said there is, you know, Amazon’s the question. The ultimate question was around Amazon in their private label business. And you know what’s best for customers, you could argue, Is that always best for business? Well, I think you know, if you were Amazon, you’d say what’s best for customers is always best for business. That’s how I’m so successful and you know this one. I I really understand where and appreciate where vendors or brands are coming from. But I would also say it’s hard for me to understand what people see is different about Amazon in this capacity. Like, you know, Kroger and other big retailers in the United States have been making private label Cheerios for way longer. You could argue Amazon is actually pretty late to the private label game based on their size and age is a retailer, Um, and to your point, you know, I think there is a small, a much smaller number of Amazon private brands, and they’re, of course, our brand individual independent brands selling on the platform. So to me, I think it’s interesting that people think Amazon or treat Amazon with a different mindset than they would treat any other retailer like, you know, in apparel. Nordstrom’s has tons of private brands in their store. The grocery all have private brands in their stores. The data suggests that a meaningful percentage of total volume moved across the globe is from private brands. So in that sense, like, I don’t think Amazon has any more or less data. You know all you need to know is what selling which the offline retailers have that as well.

[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’ve got better relationships with your than the manager is to where you could bring ideas to them. And don’t be afraid of being in ideas than either on the vendor side, but even on the seller side, like a good bloke, crime contact or connected with From when I was at Amazon. He’s like got seven account manager for Amazon now because they make him do the beater for everything s Oh, of course, he’s feedback on anyway. I’m conscious off time, Kim, but I think we’ve got so much there. There was lots of questions, but I didn’t feel what really needed them because we end up going on all different tangents. But thank you so much for your time. I really enjoyed that, and hopefully, hopefully is good for you as well.

[0:53:36] Kim Mathisen: That’s always fun to talk about Amazon. It’s an exciting business, you know, retails and exciting category. It’s like the one business where you get to merge all these things from supply chain toe buying an assortment thio finance its’s a pretty awesome space to be. And so I hope that your podcast listeners appreciate that as as much as I do. And, you know, getting to work with Amazon and other fast moving companies is just It’s a thrill and so enjoy it. Some days air frustrating. But at the end of the day, what I think is really unique is the opportunity to learn and grow and keep innovating on behalf of both your customers. But I’ll see your product, and you use it as an opportunity for you to learn more about your business. Leverage their data. Look at your vendor central. Understand where across the country your products are being sold on where they’re not leverage. Amazon is a way to tell other retailers that you have national distribution. See if that helps you like there’s really unique ways that people can leverage their Amazon business is just as much as it’s great for Amazon to have your products. So, you know, always be looking on the lookout.

[0:54:42] George Reid: Indeed, indeed. Well, thank you so much again. I’m sure we’ve delivered a ton of value more so you than I. And, uh, we should be launching very soon, So thanks for your time. And I speak to you very soon.

[0:54:53] Kim Mathisen: Sounds great. Thanks for having me

[0:54:55] George Reid: to his Kim. Hey, guys. Just a quick one. If you are enjoying the podcast on either have some actionable next steps or new ideas I’d really appreciate if you could one subscribe to the show and leave us. Review Thes are really, really important to us. As you probably know, being in the Amazon world, aunt to If you’re looking for additional support with your brand, head over to the website. It’s always day one dot co dot UK where we’ve got links to other resource is as often our guys speak soon.

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