“Customer obsession” is key to Amazon’s success

Florian Baumgartner, Director Consumables, Amazon Germany

To be Earth’s most customer-centric company is Amazon’s purpose and it shines through in everything they do. We spoke to Florian Baumgartner, Director Consumables, Amazon Germany, about the company’s approach to Purposeful Retail, observing consistent factors over trends, and how their obsession with pleasing their customers takes form.

Can you tell us a bit about your backstory and what you do at Amazon?

I have a background in Business Administration. Before joining Amazon in 2010, I spent several years at a management consulting firm, focusing on the fast-moving consumer goods and retail industries. Once at Amazon, I spent my first four years working as Director of Movies & Music, then coordinated the launch of AmazonFresh in Germany, a service that offers Amazon Prime members in select cities free delivery of groceries and everyday essentials. Today, I am the director of the consumables business in Germany and the European Pantry business.

What does purpose and more specifically purposeful DOing mean to you personally?

Developing and holding onto a bold and inspiring vision — even if that entails being misunderstood for long periods of time, as Amazon’s founder and CEO Jeff Bezos once said.

Amazon’s vision is to be the most customer-centric company in the world. What does that look like to you?

Amazon is a company driven by a relentless customer focus. We believe that customers always want something better, and it is our desire to delight them. This drives us to invent on their behalf. At Amazon all of our actions, goals, projects, programs, and inventions begin and end with the customer in mind. We call this “working backwards”, a fundamental part of our innovation process. We start with customers and what they want and let that define and guide our efforts.

How is Amazon’s purpose integrated into the company’s strategy and operational thinking?

Our culture is outlined in 14 so-called Leadership Principles. These are not just inspirational phrases that we frame and hang on the wall, but rather guidelines that provide orientation every day — whether we are discussing ideas for a new project, thinking about how we can best approach a problem, or hiring new Amazonians. The Leadership Principles empower us to be owners and innovators while maintaining our customer centricity. Right at the top of our 14 Leadership Principles is “customer obsession”, which explains how much our customer focus is core to our company’s DNA and operations. Another one is called “bias for action”. Many decisions are reversible and do not require extensive study. As speed often matters in business, we encourage Amazonians to take calculable risks and just start doing things.

Amazon’s 14 Leadership principles. Image credit: https://www.rocketblocks.me

Being so focused on the customer most require constantly observing changes in behaviors, values and needs. What are the major shifts you have noticed in the past five years?

More than changes, we focus on observing three constant factors in customer behavior: they want low prices, the greatest possible selection, and convenient delivery options. We constantly ask ourselves how we can best use new technology to better fulfill our customers’ needs. For example, customers care about sustainability and increasingly use Same- and Next-Day delivery options when shopping. Route optimization technology helps us determine the most efficient routes by improving the timing and routing of shipments. Such technology allows for the inclusion of routes, address accuracy, and opening hours. In addition, it makes it possible for drivers to serve the same neighborhoods wherever possible — and these drivers have the best knowledge about local parking facilities, addresses, and preferred drop-off locations.

What do you anticipate to be the main trends and how will the retail sector be impacted in the next years?

Again, we believe it is more relevant to focus on the things that we know will not change.

We are therefore always trying to expand our product and services selection and to offer competitive prices and convenient delivery. We also believe that a positive attitude towards the future is of great importance. At Amazon, we look at the future with optimism and are constantly thinking about how we can better shape it to our customers’ benefit — because we can’t predict the future, but we can contribute to its development. When discussing new ideas, we do it with an “Institutional Yes” attitude. That means we only accept contributions that seek to improve an idea — so that it has a good chance to succeed.

With Amazon being a major player in e-commerce globally, what role will brick-and-mortar play in Amazon’s future shopping experience?

We see that customers appreciate the variety of shopping opportunities, including the bakery around the corner, shopping at high streets or in malls, online shopping, or a combination of all of the above. Today, half of the articles purchased on Amazon worldwide already come from small and medium-sized companies — and many of them are enhancing their offline business through an online shop and through selling on Amazon.

Our own goal with our physical presence has always been to offer true added value and delight our customers with innovations in that environment. For example, nobody enjoys long checkout lines. We therefore worked backwards from our customers’ perspective and asked ourselves:

what if we could create a shopping experience with no lines and no checkout? Our answer: Amazon Go and the Just Walk Out Shopping.

We now have stores in Seattle, Chicago, and San Francisco.

The Amazon Go don’t have any cashier, cash register, or self-service checkout stand. Image credit: CNN Business.

What does Purposeful Retail mean to you?

For us, it means having the customer in mind. In this sense, we will continue leveraging technology to make our customers’ life easier. At the same time, we are putting our scale and inventive culture to work on a more sustainable retail sector — because it enhances customer experience, reduces costs, and protects the environment.

Across Amazon we are leveraging our scale for the good of customers and the planet through innovative programs such as Frustration-Free Packaging, Ship in Own Container, our network of solar and wind farms, investments in the circular economy, and numerous other initiatives happening every day across our company.

I am particularly excited about our project “Shipment Zero”. It is Amazon’s vision to make all Amazon shipments net zero carbon, with 50% of all shipments net zero by 2030.

Do you have any advice for companies that want to be more purpose-driven?

To quote Jeff Bezos, “build a business strategy around the things that are stable in time.” Then make sure that you are investing in ensuring that you are delivering those things. When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.

SIMONE O'DONOVAN

SIMONE O'DONOVAN

Since arriving in 2012, Simone has been weaving her way through the literary scene in Berlin, dabbling in editorial work, publishing, and PR. Likely to be spotted in Templehof with a packet of salted almonds and a fine novel, she sees herself as a jack of some trades and master of none.

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