Amazon Business GM Defines Digital Transformation

• The pandemic has ‘vastly accelerated’ digital transformation, says Petra Schindler-Carter, director and GM at Amazon Business. 
• A key difference between Amazon’s B2C and B2B customers is that the latter want much more control and data. 
• Sustainability is a growing trend for distributors that’s here to stay.

Petra Schindler-Carter has been with Amazon for nearly 20 years. In that time, she’s seen first-hand how a deep focus on customer service can drive growth and define a company. She’s also been a leader at Amazon Business since its 2015 launch, serving as director and general manager. MDM spoke with Schindler-Carter about everything from the pandemic’s impact on the supply chain to Amazon’s diversity and inclusion initiatives.

The conversation has been edited for length and clarity.

MDM: Tell us a bit about yourself, and your role at Amazon Business.

Schindler-Carter: I started [my career] in academics. And then, I got caught up in the dot-com era and got to know the team at Amazon, and moved to Seattle in the early 2000s. I’ve worn a lot of hats over the years within the company. First thing was the consumer business. 

Since 2015, when we launched Amazon Business, our B2B arm, I’ve been serving as the director and general manager of that business. I’ve been focusing on serving our customers and driving growth and improving our customer experience. 

Our focus really is to enable organizations of all sizes, from the largest of the public sector companies to small businesses, to improve their procurement. 

We’re now live in nine countries. We have over 5 million businesses that we serve worldwide. 

Earlier this year, we shared some news that we reached $25 billion in global annualized sales for Amazon Business. You may not know that over half of that actually comes from third-party sellers, which includes a large number of smaller, diverse businesses. It is an aspect of our business I’m particularly excited about. 

Overall, for Amazon Business, our goal is to give organizations an experience that makes finding and purchasing supplies easy. We’ve had that mission from day one for Amazon, for consumers to have this amazing experience. And we think there is a version of that that is purpose-built for businesses, and has tools that make all sourcing for a work environment as effortless as it is for shopping for yourself. 

MDM: How do you define digital transformations. And, did the pandemic accelerate those transformations?

Schindler-Carter: Digital transformation, it’s been around for some time. I do think the pandemic has vastly accelerated that transition. You saw, there was a lot of the shifting of the procurement function and the workforce to remote and online. It eliminated some of the barriers and it put the focus, frankly, on the core mission of the companies and maybe put a finer point on the need and urgency to eliminate friction and barriers in sourcing. 

One thing that I’m passionate about when I work with customers is just really identifying with, where do they have obstacles in their everyday operations and execution where procurement becomes a burden versus an enabler? 

We believe that there’s an infinite number of opportunities for e-commerce, for technology to help and get companies more focused on their core mission and take advantage of what digital technology can bring. 

So, whether it’s automating workflows, such as replenishment, dialing policies into a curated buying experience that would have been very manual. Just the basics of, ‘How do I find suppliers? How do I compare products and gather information?’ 

I feel like we’ve been tackling these challenges for many, many years in the consumer business. We now had a global urgency to do the same in a business context, and it took a push to push industry forward. 

MDM: What about the cultural shifts that are needed to embrace digital transformations for your customers, and within Amazon itself?

Schindler-Carter: At Amazon Business, we serve a very broad spectrum of customers. So, that could be a large hospital chain, it could be a small elementary school, it could be an independently owned restaurant, a small-business owner. Each one of those has their own profile and background and maybe habits and cultural conditions on how they’ve been purchasing. What’s common is the pandemic has driven more work to remote. So just even that notice of, ‘Could I initiate procurement entirely through technology and the internet without having a brick-and-mortar connection?’ For some, that’s a change.

If you look at the public sector, there’s been a well-founded history of ensuring fairness and competitive bidding, and seeking multiple bids. And, there’s been a significant shift in recognizing you can get that competitive comparison in ways other than going out to bid and seeking multiple proposals. So for example, if you look at Amazon, any single product page or detail page contains multiple offers from different suppliers. We love that because it gives customers an opportunity to make that comparison and draw information about the best combination of pricing, convenience, shipping speed, themselves. 

To make that shift for, let’s say, a government buyer to recognize, I can comply with my mission of seeking out multiple bids and getting a fair comparison, but doing so in a digital context, that’s a cultural shift. 

In health care, I spent a good amount of time last year working on an amazing project where we launched a store front specifically for organizations supporting the frontlines of the pandemic. We’re talking health care, government organizations focused on emergency support services. 

For those types of buyers, the motivations were, obviously, a sense of urgency for new products, but at the same time, ensuring that the quality bar remains extraordinarily high. 

Historically, those types of buying motions may have been accompanied with a lot of relationship-building, extensive research, maybe paper-based, and all that had to change because the pandemic forced us to move faster. And we tried to respond to those urgent needs, but also really recognized that we needed to furnish information to those customers on product quality, the provenance of products, and so on and so forth. 

It took a readiness shift in some of our customers to say, ‘What I thought I needed yesterday, I don’t need today because different things matter.’ And then secondly, just quickly realizing, ‘You know what? These new circumstances have actually allowed me to accept the fact that there’s a different way of doing business. I don’t actually need to go back to the old way.’ 

We had a lot of customers during the pandemic, who, maybe during the pre-COVID days, they would not stockpile products, or keep on hand a larger level of inventory for certain items. PPE or sanitizers, for example. … We worked together with customers to look at alternative ways of dealing with those needs. So whether that’s committing to an automated replenishment cycle with Amazon, and looking at that as a viable alternative to setting up on-hand inventory, or stockpiling. Or, simply looking to us to establish a forecast and future sources of inventory. Those are just all different ways of challenging the norm of how business is done. 

MDM: Can you explain what roles artificial intelligence, machine learning, cloud and edge compute play for Amazon Business?

Schindler-Carter: The way I would look at it is, there’s, first of all, the body of investment in data-driven innovation and e-commerce technology that we continue to iterate on. And we look for customer feedback. We use that to shape our capabilities that, ultimately, customers benefit from. 

I’ll give you a couple of examples. On the Amazon consumer website, there’s features that, you and I, when we do our own shopping, we’ve always loved and appreciated: The ability to find alternates for products; to get reminders when it’s time to replenish something; to get useful feedback on product details. Those are all core capabilities that, underneath the hood, of course are fueled by collaborative filtering, by machine learning, by a ton of investments. The size of our store and the breadth of the catalog yield a lot of benefits for customers. 

The second one, I would summarize as a key difference between B2B and B2C on Amazon, which is the B2B customer wants a lot more control. We’ve invested in a number of technologies that are sourced by and informed by some of these technology innovations that help our administrators and procurement leaders to consider and control and dial in policies as to which suppliers they want their employees to source from, what type of brands of products are preferred, what restrictions they want to impose. 

Maybe a third one, data and reporting. Probably one of the top items of feedback or opportunity I hear from CTOs that I’ve talked to is, ‘I just don’t know what’s going on, I don’t have visibility into where all our spend is going. I have a difficult time comparing and evaluating the relative efficiency of where my employees put their spend. Are we getting better over time, am I saving money?’ 

And so, that’s completely in the sweet spot of Amazon. We are obsessed with data. We invest a lot of time and energy into building tools and capabilities that we then allow our customers, in this case our B2B customers, to use to do just that type of evaluation. 

MDM: How does Amazon Business help its customers with an e-procurement strategy? 

Schindler-Carter: To really put a finer point on this, Amazon, we’re not here to just replicate the status quo. … Having spent my entire career in e-commerce, it is so apparent that there’s these opportunities to do purchasing for businesses better. To save money, to save time, to allow organizations to be more productive. You don’t want teachers or healthcare professionals who have a super important mission to be distracted by not having the right products at their fingertips or by manufacturers or big brands to look at procurement as a drag or drain on their organization. 

There’s two buckets of how we help. The first one is the bread and butter: Selection, price, convenience. 

We aim to have what the businesses need. We aim to have the most competitive price. And we want this to be as convenient as is suitable for that business. And that is both along the dimensions of speed and reliability of fulfillment. So that’s one simple summary of selection, price and convenience. It’s, of course, extraordinarily hard to do. And I do think we can draw on the history of Amazon and all the investments that were made in finessing that reliability and selection of price formula for businesses. 

The second objective is all around the purpose-built business capabilities. So, all the stuff that you and I as a consumer don’t need, but that our business customers need. There’s a long list of features and capabilities. Some have the provenance and convenience of the consumer version of Amazon but modified and expanded for B2B. 

One example would be the Business Prime program. If you’re familiar with Prime, we have a version of it that’s uniquely tailored to businesses; the ability to have a multi-user business background, the important controls of approval workflows, obviously payment solutions are incredibly valuable, tax exemptions, that entire body of capability around curating the site experience. These are the key differentiators.

I’ve talked to so many customers who’ve said, ‘I would love to direct more spend to minority-owned businesses, to socio-economically disadvantaged small-business owners. I’d like to support my local businesses, but I have a tough time finding them.’ 

So, that’s another set of capabilities we’re providing to procurement professionals to just make it easy to find that selection and dial in to their preferences. 

MDM: How is Amazon enabling supply chain diversification?

Schindler-Carter: One thing we’ve really focused on, actually since the initial launch of Amazon Business, is working with our suppliers to collect any and all information they’ve been furnished on both the provenance of their products, as well as the structure of their businesses. So, if they have a credential that’s an ownership credential., if they have a diversity certification, if they’re a small business that has a certification, we actually give them the platform to share that data with us and our customers. So that the customer has at the fingertip information about whom they’re buying from. 

On the flip side, then having the reporting capability to assess what ended up actually happening. What percent of spend or what type of spend is being directed against these companies is something that procurement leaders are super hungry for because they’re motivated, they have often company-wide commitments and strategy, but they have a tough time executing on it. That’s one flavor of the supply chain diversification. 

Another one is to think about the shortages caused by the pandemic. The fact that we hit the ground quickly to help our customers line up a secondary, tertiary source of supply from a variety of sources has been a game changer. And again, I think that’s one thing they’ve come to appreciate in a more sustained way. This isn’t just a short-term Band-aid, but a smart, long-term strategy to diversify.

MDM: How is Amazon Business expanding its presence with minority businesses?

Schindler-Carter: Back in June, we launched the Black Business Accelerator, which is the program that aims to drive economic equity for Black entrepreneurs. It’s resources to thrive as a business leader, as entrepreneurs, and a super exciting initiative. We’re inviting Black business owners to participate in the initiative. It gives them financial support, access to mentorship, business education, and then, most importantly, marketing and promotion of their brands and their products as third-party sellers in our store.

  I love how this type of initiative really taps into so many of the capabilities we’ve built over the years. And it does good in the process. Because we certainly recognize that Black entrepreneurs have had less access to capital, less access to mentorship and the type of growth opportunity that can give them a forum to launch their business on. 

We’re committing $150 million over the next four years to help thousands of Black entrepreneurs to reach hundreds of millions of customers, across both our consumer business and our B2B business. 

MDM: How have things changed overall for Amazon Business from last year to this year?

Schindler-Carter: In terms of products, it’s been, as you can imagine, a wild ride. Customers who never needed to buy gloves suddenly needed to buy gloves and needed help figuring out what they needed. 

You know, other organizations shifted gears and needed to equip their students, if they’re in an educational setting, or their employees with products to support the remote work-from-home or remote schooling. 

The one flavor is helping customers begin to buy products they never needed, but now will need on a continued basis. It’s the sanitizers and the webcams and headsets. Many, many stories of doing that type of sourcing and getting customers smart about what they needed. 

If you think about maybe more permanent changes and how, in a corporate setting we expect social distancing to some degree may be here to stay, may be the new normal. So, we’ve seen some shifting of profiles and furniture purchases, and just other measures to make public spaces safe. 

And then again, it kind of comes back to just being really nimble and flexible. At Amazon, I have seen our teams get really energized by just being able to adapt rapidly and say, it’s not just about, today you’re buying computer equipment. But it’s about holistically working with customers, working backwards from their needs and saying, ‘We’re here to flex with you wherever you need it to go.’ 

The other dimension has been having some customers who had to furlough some departments who’ve traditionally done procurement and that work of sourcing fell to the everyday person like you and me. For them, being able to shop online and work with members of the team has been helpful as well. 

MDM: Are there other trends overall for B2B distributors that you see coming?

Schindler-Carter: In terms of high passion, high energy topics, sustainability is top of mind with the world changing rapidly and temperatures rising, to really recognize the importance of investing in sustainability. And that means revisiting sourcing practices. 

Putting a sharper point of view on identifying the products we buy. What is their source? What can we do to reduce the footprint where product is moving? Can I purchase from local suppliers? This broader topic of how to do procurement and run a business in a more sustainable way. I don’t think that’s a trend. I think it’s here to stay.