Juan Carlos. García. General Director Amazon Mexico. "Our obsession is metrics"

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1 Juan Carlos García General Director Amazon Mexico "Our obsession is metrics" He started out as an e-commerce entrepreneur and is one of the pioneers of this platform when many did not believe in it. Today Juan Carlos Garcia has become one of the leading specialists on the subject. He led one of the most important launches in history of the number one online trading company worldwide, Amazon. "When I started out, 16 years ago, very few were interested in this business says the CEO. Today we are talking about a market of 12.2 billion dollars." There is no tendency that escapes its interpretation, where each strategic movement in its infrastructure is supported by data analysis. Here he talks about the versatility that companies of the future should have: Omnichannel companies.

2 "You search on your smartphone for what you want, you click and have already bought something (thanks to 1-click technology): Your product is on the way. It's very simple, but behind it is a number of processes JUAN CARLOS GARCIA 31 What does the arrival of Amazon mean for the Mexican consumer? A great opportunity for Mexican consumers. I have worked for more than 16 years in e-commerce and I've always waited for this day. To have the opportunity and the excitement of witnessing the most important launch in the 20 year history of the company, and for it to be in Mexico, is very relevant. Never before had Amazon launched so many millions of products, so many categories and so many functions simultaneously. The level of implementation has been the most difficult in the history of the company. It also shows the level of maturity and size of the opportunity we see, with very high rates of growth, where the entrance of e-commerce is low compared to the size of the economy. We see a consumer who is ready to buy online more frequently. In terms of omnichannel we focus necessarily on the technology. What does the Amazon technology platform have that becomes a predictive force of each consumers behavior? I think it has to do with the DNA of the company. One of the things that characterizes us is that we are the most customer-focused company on the planet. We are really obsessive about customer experience, it all starts with them and from there we create the whole experience, usability, and products. We start with the consumers and use all the artificial intelligence and algorithms that we have developed for over 20 years to build a customized store. When you enter and register a store is automatically built according to your profile. No store is the same as the other. Taking two decades to develop technology gives us knowledge and commitment. An example is the technology purchase with a single click, you search on your smartphone for what you want, you click and have already bought something, your product is on the way. It's very simple, but behind this is a number of processes, I have to have your information stored, your credit card number, your shipping information and, of course, all safety and protection mechanisms of that information. This technology has been patented by us. We have thousands of registered patents. We consider ourselves inventors and entrepreneurs, we like to be always innovating. Is this innovation also adapted to the culture of the consumer in Mexico? It is. We are already taking some specific initiatives for Mexico, such as months without interest. Out of the 12 countries where we operate, only in Mexico has a payment platform been

3 JUAN CARLOS GARCIA 32 developed, which is determined by the knowledge of Mexican consumption. There are many other things that we will be launching in the future. Does the flexibility effect of the technological platform and the collaboration in the information received by the consumer, play a necessary duality for business development? Completely. We are a company based 100% on analytics. We try to support everything based on data. In order to optimize we asked our customers at all times if we are fulfilling their specific needs as a company. Another important issue is the challenge of mobility... Mexico is one of the most dynamic countries in mobile internet. The new internet users are practically entering through the mobile platform, they are skipping the desktop stage. In navigational time, there are figures indicating that on average a Mexican user checks their smartphone 100 times a day. How does Mexico face the challenge of delivery in terms of service and efficiency levels? We have made alliances with Mexican logistics companies such as DHL and Estafeta, but also one of the specific characteristics of Mexico is that we have launched our own logistics. Typically we are expecting the market to reach a maturity level in order to have its own logistics, but in Mexico s case, given its characteristics (such as high concentration in Mexico City and metropolitan area), we have decided to launch it at once. We are of the few places that state, "If you place your order before such time, you receive it at such time" and we guarantee it. We are constantly reviewing what percentage of the shipments arrive on time, and if they do not, we take action. Our obsession is metrics, we are always measuring the results. However, these results are also linked to the digital experience from interacting with Amazon. How do you manage the content in a functionality integrated manner? We are very obsessive about the information we give to our customers. For example, there are many places where, if you are looking for a product, many results may appear simultaneously in which, with combinations and recommended accessories you would get 32 pages. The truth is you can t distinguish one from another. On Amazon, if you want an iphone you only see one result, with all possible combinations: The versions of each model, colors and so on. This way the customer can customize their product. We are also very detailed in the quality of the photos, of the content, and search results.

4 "When you enter and register, automatically a store is built according to your profile, no store is the same as the other The launch of Amazon in Mexico shows the level of maturity of the market and the size of opportunity we see JUAN CARLOS GARCIA 33 By interacting in digital purchase environments, credibility is key in offering a product and its functionality in order to build long term loyalty... That is part of the intellectual property that we have developed over the years. We were among the first webpages to enable customers to make recommendations on products, which was sometimes a bit difficult to understand for suppliers. For example, the editors said, "how is it possible for a negative review to appear next to my book? You do not know how to sell! But before selling, we are interested in customer loyalty. And we want our customers to know what it is that they are buying. This builds a long-term relationship, makes us win customer confidence, and is an example of how we create that functionality and build specific stores and specific recommendations. "The editors said, 'How is it possible for a negative review to appear next to my book? You do not know how to sell!' "Before selling, we are interested in customer loyalty How do you manage to get the "recommendation" service to be objective - analytical and not subjective while stimulating the purchase decision? Through a very analytical advisory, without any interest in favoring one article over another. The same users are those who create all the information on the products, and the trend is established. The name of the game in the digital business is the price. How is the price game redefining itself in the Mexican market with the arrival of Amazon? We always try to offer the lowest possible price to our consumers, but we are not obsessed with what other competitors are doing. The only one with whom we obsess over is with the customer. We do review the prices of the competition, but to serve our customers. Another advantage of the Internet is that it democratizes access, information, and consumption, so who's going to win

5 JUAN CARLOS GARCIA 34 is the consumer, which must be clearly placed in the center. How do you see the Mexican consumer from Amazon? Overall the Mexican client behaves very similar to the vast majority of customers in the world. There are three things that will never change, and one of them is the price, they will always look for the lowest price. The second is the selection, they are always going to want more options. And the third, availability, they will always prefer faster shipping. We constantly work on these three aspects. So we wanted to start from day one with the largest catalog of the Mexican market, with millions and millions of products. Mexico City is a complex issue in terms of delivery. Due to this complexity will we see innovative, alternative transport? Everyone imagines we will start using drones. It's a gamble that is happening globally, and when the time comes we will test it here too, but in the case of the capital, given the intense traffic, we deliver with motorcycles and trucks, and with a tracking technology which is unique in the market. Did the entry that Amazon had with months without interest, somehow redefine the banking agenda for rethinking financial services? Yes, we are working closely with the players, both globally (many of them are global) and locally, and we clearly told them we were going to launch in Mexico and we needed to accept not only sales with months without interest, but also something that was very difficult to accept for e-commerce, which are debit cards. We have detonated the acceptance and I would say that today we work with all the players that accept both debit and credit. Amazon is the quintessential example of omnichannel, what would your advice be for companies that want to start with an Omnichannel strategy? Sell on Amazon. Use the best player to move their products. Amazon is recognized anywhere in the world as the best customer service company and that is something invaluable. Many of our customers say they are staying with us without even reviewing the prices, because they know they will always get the best price, but more than anything they will get convenience and security of delivery. They know that they can contact us 24/7 either by phone, chat, , or social networks, and know that we answer immediately. Today social networks are essential, and that is something very Mexican, what happens here doesn t happen in any other country. People ask all sorts of things, contact you for any problems they may have and want to know whether their orders will be available on time, everything is communicated

6 JUAN CARLOS GARCIA 35 across social networks. People ask and we will answer this way. Our strategy of social networking is here ever since we entered the market, the day we became a trending topic. How does Amazon see the traditional channel, the little shops on the corner? To integrate traditional shopping with the digital one is a natural effect. An opportunity is precisely to sell on Amazon. It's as easy as entering amazon.com.mx, go to the bottom, where it says "sell on Amazon" and with the same information they have registered as buyers they can be sellers. Clearly they have to meet certain parameters, but we will welcome players of all sizes. Mexican consumers still have reservations as far as buying online because of security issues, they still struggle with the idea of registering their credit card information... Indeed, the data shows that the main reason for not buying online is because they are untrusting, they are not sure what the personal information they give out will be used for. At Amazon we have 20 years of experience, we practically created this industry, and handle all the personal information in a very safe manner. We have 280 million consumers globally who rely on us, and that somehow validates the security of the platform. We have the most advanced encryption technology and we are also very respectful of the privacy laws of each country, so that only we store the information we are allowed to. It is a relationship of trust and long term, you have to feed and maintain it. It is very easy and transparent. It is the way to give more power to the consumer. They know they can contact us 24/7 either by phone, chat, , or social networks, and know that we answer immediately "Our social media strategy has been in place since we entered the market; the very day we became a trending topic"