Growing Amazon Grocery

[MUSIC] Welcome everyone to our Learn and Be Curious podcast. I'm super excited about today. This podcast for those who are new is for Amazonians or the Amazon curious who want to meet and celebrate the amazing people who deliver the Amazon magic and to learn a little bit more behind the scenes how they do it. So today I'm super excited. I've got Cedira Cicic here with me today. She's a product manager in our grocery space and I'm really looking forward to talking about it. But I'm going to start someplace a little bit earlier which is someplace I like to start with everybody who I talk to which is tell me your Amazon story. So how long where did you start? What have you done? How did we get here? Let's see. I started 17 years ago, almost 18 in May. Congratulations. Before I came to Amazon, I worked for a national department store as a buyer. Great. Which one? Macy's. Oh fantastic. And I was one of the juniors buyers. So I could see that where we had online available, the sales were growing tremendously. It was a very small base. Yeah. But it got me very curious about online. Yeah. And so I interviewed at Amazon and was offered the role of, it was actually a buyer at that point in 2008 before we changed the names to vendor manager. Yes. Buyer in home improvement. What did your friends and colleagues think of your move? It was mixed. Right. I was working for the largest national kind of department store. And I had a great business, but others were excited. But what are you doing at Amazon? Right. They sell books and DVDs and CDs. And I just said I wanted to learn how online works. I figured I could always go back. I could always go back to the department store world. I know how that works. Yeah. But it's an opportunity for me to go forward and learn something new. That's awesome. And so I was very excited to join. And almost immediately I thought, what did I do? What's so? You know, you go from being really good at a job. Yes. And you move into a world where I was sat in meetings for the first week, not knowing what was being sat around me, all of the acronyms being thrown around. And as a buyer, which was the title at the time, I'm not picking product. I'm buying everything. Yes. What exactly is my job? You know, I had a question. It took me a little while to get my bearings. But it was really fascinating learning how our catalog tools worked, how our pricing, meeting vendors in the marketplace, and then having to actually describe what we do and what we want and why it is important. And that this is really the foundation of Amazon with the businesses that existed. It was a really, really great foundational experience for me to learn Amazon. As Amazon was. Yeah. That's awesome. And what's something that was different working inside of Amazon than working inside of a traditional retailer? Well, outside of picking selection and having to know what your square footage was and picking, I think, deep products that you think are going to be the best sellers. We had to make bold bets in a department store as to these are going to be our key items. And this is the investment that we're making into it. And this is the marketing that's going behind it. Yeah. When I first started, we would look to our vendor suppliers to say, "One or the one or two items that we should feature, and let's put them as a deal of the day." Yeah. But you must have been quite a different cat coming into their offices and saying, "I want two of everything." And then you tell me what's going to be the best seller. One vendor that I worked with, Wagner, ladders. And I'd never been into a ladder showroom before. I mean, it was buying junior's dresses. A ladder showroom. I didn't even know there was a ladder showroom. There were ladders showrooms. There's more about ladders that I learned in that job. And camouflage ladder was one of their best sellers. Of course. Because camouflage is always sales. And we put that as a deal of the day. And I thought, you know, it actually makes sense to order a ladder on a website. Because is your car big enough to always take ladders home from? Yeah. Super convenient. It was one of the best deals that I had run. Fantastic. Okay. So that's how you started Amazon. What's next? Back to my roots. I was part of the clothing launch team the following year. And that was so that would be 2009. 2009. Amazing that that was our launch. Yeah. We had a bit of a clothing business, but it was predominantly third party. Initially, I had said no. No. Because I knew how I Amazon worked. I knew how clothing industry worked. And unless we were going to have a significant investment in updating systems and tools, it was going to be very, very difficult. And then I was later persuaded. And I'm so glad that I took that role. It was one of the hardest jobs I have had still to the state, but it was probably one of the most satisfying. And most of the vendors were not interested in changing anything with their operations. And weren't actually convinced about Amazon selling clothes. It's kind of, I had the same thing. I was leading the consumables business at that time and getting it started. And I think we were living kind of parallel lives. Because it was, it's in the nitty gritty at the core, Amazon was built as a book seller and a book retailer. And there were so many underlying systems that were built with that in mind. And similarly for consumables product, the idea that you, a book, you traditionally kind of place orders for each of these books from the book manufacturers, the publishers, in the consumables world to buy by cases. But that was not how our systems were built. And so we had to develop hacks and system overrides to get into that experience. And I had had the very same thing too, where even the products themselves had been built for a physical environment. I remember one of our big CPG companies. They had kind of an iconic laundry detergent, liquid laundry detergent. And we were discovering that a portion of them were leaking when we were shipping them to customers. And we ended up talking with them and they said, well, I talked to one of their packaging engineers and he said, well, yeah, we've never designed it to be placed on its side. These bottles were always designed to sit on a store shelf all the way through. And so some small percentage of them will leak no matter what you do. And so we had to finally work with them to re-engineer that whole product. But in the beginning, in those early days, we were so small, they go into a big apparel manufacturer or a package goods manufacturer and asking them to redo how they make products or how they distribute products was, I'd say, I guess that was the job of the buyer. And you said at the beginning, it was your hardest job, but one that you really think finally back now, why was it such a good experience? It was so hard. I honestly think some of my favorite experiences are the hard ones, the challenges. I think when you don't know how you're going to get to where you're going, you know that that's where you need to get to, find the way to do it. It's very rewarding and satisfying. And when you look at, you had no business one year. And in five years, you've now grown to the largest kids business in the country. It's incredibly satisfying. The fact that we had so many people saying no to us at the beginning, they didn't want to sell us. And several years later, they were knocking on our doors. Yes. That is incredibly satisfying. And to see where we went from, you know, just doing flats of images to having images on models and how that came about. And there was just so much evolution and growth in such a short period of time. And I remember thinking, I'm in charge of kids and baby clothing. Who decided that I'm going to be in charge of kids and baby clothing? And that was remarkable too, right? Being able to set a vision and set the strategy and having such great smart, often dedicated people around me. It was excellent. Yeah. It was exhausting. Yeah. But it was great. Okay, so apparel, what's next? Wine, followed my curiosity and at the time in apparel, third party started to grow really big. Yeah. I realized I want to learn about marketplace and I want to learn about how these sellers operate. Started snooping around on the marketplace. Scientists, there's anything of interest and category leader of wine. That is a hard category. Yes. We essentially had a third party marketing platform. What was complicated about is this shipping direct to consumer, alcohol, has state by state regulations and different laws. We never actually held the wine. Yeah. We set up a platform where wineries could list their products. They had to validate that they actually had the legal rights to ship to whatever states we allow them to ship to. And then we had to get licenses in each of those states to build a market. I think we had made it to about 88% of the drinking population. By California was obviously the largest. Yeah. And that is. If you don't have California, you don't have, as a fifth generation California, if you don't have Californians, you don't have the drinkers. Do you remember the Amazon Wine program, the retail attempt that we made at it or the hybrid attempt? I remember when that was attempted. Yes. Was yours before or after? It was after. Okay. So you learned from our failures. So I had written the original Amazon Wine PR FAQ and I was so excited about this one. And this, the idea in the one page was at the time Netflix was still sending DVDs in the mail. And if you can remember it, it was kind of like you would set up your watch list, things that you wanted to buy. And then as you watch the movie and send the DVD back, they'd send you the next one. And so it was kind of Netflix meets wine, meets subscribe and say. And you would go in. Perfect. And we would have all these wines from vendors, you know, around the country, mostly low in central California and Washington say, and there's just amazing wines, like thousands of them, that people, you'd never get access to them because they're never going to be in a store near you. And you would go in and set up the list of the ones that you want to drink. And then you would say, "See me, four bottles every month or six bottles or send me two cases, whatever you wanted, no judgment." And it was phenomenal. And we actually had it in beta. And so we had a big warehouse in Central California. And then they would send them in the amount of lawyers that we needed to run that business was just staggering to me. And I can remember a meeting where like to take it out of beta and to start actually going national with this thing, we put together the requirements. And we needed more lawyers and software engineers to kind of grow the business. And so we finally said, "Maybe this is too much to bite off at this time." But I think the basic idea, which is it's got a wonderful long tail of unique products. And so online and direct to consumers still is a really interesting opportunity. I don't think we still crack the code yet on it. And then grocery next. Well, ish. Okay, ish means product development. Yeah. Product development and grocery. So Amazon kitchen products. Well great. So our private label products. Yeah. I knew nothing about food product development. It seemed like a nice bow on top of the skills that I've accumulated to this point. And during my interview process, I had a conversation with the then director of the private label development. And he said, "Come be our category leader." I know nothing about food product development. Yeah. So you learn. I learned. Yeah. Fantastic. That was the one role that I was very excited about. What product were you most proud of that you developed? Ready meals. Ready meals. The first ready meals. They're incredibly hard, very complicated. We had to find a supplier nationally to be able to support it. We worked in partnership with Whole Foods Market. It took us nine months, 10 months to launch it. There's a long lead time in product development. But it was a lot of our original, actually, all of our original go-to-market recipes are still on shelves. And hopefully it's the first day. Yeah. Gosh. What's your favorite meal? That you can take a masala. Okay. Good. Wow. You didn't even take a beat on that one. Really? Okay. Good. I got to take a note of that. I'm going to say that it's a take a masala in the enchiladas for dinner tonight. There you go. That's great. Can we shift over to what you're doing now? Absolutely. And so now you're working on maybe even a harder problem, perishable groceries. perishable groceries. And so tell me what you're working on and why. So I am working on bringing perishable groceries onto amazon.com within the same day delivery experience. Yeah. And so this is anybody who's gone on Amazon recently and they're placing it in order for something and we say, oh, would you like to add milk or eggs or a chicken to that order? They can thank you and your teams for being part of that. Yes. Yeah. I think, you know, one of the problems is we know that consumers go to five or more different retailers to fill their grocery needs in a month. There's different memberships. There's different coupons that they have to collect. It's not a lightweight experience for a customer to be able to fill their grocery needs. Yeah. Could we do it better? Could we put perishables on.com where they're already shopping? Whether they know it or not, they're probably already purchasing a lot of product from us through everyday essentials which have been around close to 20 years, I'd say. Yeah. I mean, back to issues and cleaning supplies, you know, things that people will also buy within a grocery store. They've been purchasing with us. It's likely on subscribe and save. What if we were to put bananas and eggs next to them? Yeah. Because full disclosure, I've actually been a student of grocery for my entire career. And so when the.com boom came along, I actually joined an early innovator in the space called web van, which was one of the first online grocery retailers. And it was a unicorn of its day. We raised way too much money. We went public before. We had a real business model and we blew up spectacularly. But I loved it. And I learned that I love building. And that eventually brought me to Amazon to apply for a job leading our grocery and consumables business. I can remember that early interview. The way the interview process worked back then is for senior leaders. I didn't know this when I walked into the building. But for senior leaders, Jeff Bezos would be your final interview. But they kept it secret because they were monitoring how your interview is progressed during the day. And if they weren't going that well, you would just never meet Jeff. And so I had done like a full day of interviews. I was at the very end. They said, Oh, we've got one more interview for you that we didn't tell you about. And then they put you into a conference room and then lo and behold, Jeff Bezos walks in, which is a little bit surprising. Even then he was quite a famous figure. And so after I got over my initial shock and we were talking, I can remember saying to him, I said, T Jeff, I'm a little humbled at the time. Web van like pets.com was a bit of the poster child for the definition of.com failure. And I said, gosh, I'm here talking to Jeff Bezos about helping you guys launch groceries and consumables. And my resume is basically the biggest failure on the internet in this particular space. And he looks at me and he just says, Well, if you join us, just think of all the mistakes we won't have to make because you've already made them. And then he looked at me a little bit more and he goes, you'll get to make all new mistakes. And then he like gave one of his big honking Jeff Bezos laughs at the end of it, which was fantastic. And in that conversation, I would say I told him I was super excited to come to Amazon. I like building. I like all that. But I thought groceries and consumables would be one of the most important product categories for Amazon. As you said, we built actually a very large grocery business at Amazon over the last 20 years, but a very peculiar grocery business. And to put it in the language of a traditional physical store, the center of the store, where you keep all the dry groceries, the health and beauty products, the canned goods, the snack foods, the beverages, the pet foods, we've built an enormous business. And our store has a selection like nobody seemed for millions of items inside that where we've traditionally been less impactful for customers is on what the grocery store is called, the perimeter aisle, the meat, the seafood, the produce. And our contention was customers will buy this, but we've just got to offer it to them in the same shopping journey. We can't build a separate shopping journey. They're already coming to Amazon. They're already coming and they're buying all this stuff for one day delivery with with our SSD buildings. What if we put all the perimeter aisle right into those buildings? What would happen to customers? And we're kind of a year into that journey, a year and a half into that journey. And so far, it's been super exciting to see the customer attraction in that area. What I was happily surprised about is towards the end of the year when we're looking at what are the top items being sold now through the sub-same day experience. Nine of the top 10 items are perishables. It's the stuff around the perimeter aisle. It's bananas and it's berries and it's worms. It's amazing to see how impactful this has been on the customer shopping experience. The adoption has been great. It's been growing one of my guilty pleasures. I don't know if it's a pleasure. It's guilty though. Is it I constantly look at our daily sales curves. I do too. Over the weekend and I'm always looking at the numbers and I'm looking at the top sellers and even this morning I went and the top sellers of Amazon overall. Right there in the top 10 items was avocados. And I was like, wow, that team has really changed the shape of the M. If you would have gone back 10 years and told somebody that one of the top 10 items sold today is going to be avocados. I don't think they would have believed you. I think it's simplified shopping for some need states. It all goes into one cart. It's delivered the same day and it's a low free shipping threshold to be able to get it that day. What's hard about this business? I think the hardest thing is the shelf life. So the time at an item is good before it does perish. And that's I think any aggressor would probably say moving through and getting your in stock right. Making sure that you're selling and not wasting products. That's hard. The seasonality of the items. I mean, we offered turkeys on the same day. Yeah. turkeys. Yeah. Who's going to buy their Thanksgiving turkey? Turns out tens of thousands of people bought those Thanksgiving turkeys. But we had never done none of them. Yeah. How many items do we need? How are we going to shift them? Do we have the right size bag? So you can buy like AirPods and a frozen turkey right at the same time. That's awesome. Exactly. Exactly. And your batteries and everything. Yeah. The core of the challenge with perishable products is their perishability and their fragility. And so that you really need to I mean, the care you've got maybe two, three, sometimes four different temperature zones inside the fulfillment center that you have to manage. These items only last for so long and that makes the in stock challenge incredibly challenging. I remember when we first started this business. This was EGATS a long time ago. We had started up Amazon fresh as a pilot here in Seattle. This was a couple years after I had started. And it was a very scrappy operation. And we subleased an old Safeway distribution center. So we had a proper kind of chilled multi-temperature classic environment. And we basically built a fully functioning grocery delivery service. But scrappy meant that all of us who worked on it, including myself, did all the roles and we kind of shared them all out. And so I would do customer service at night, one day a week or I learned how to drive a truck I got. actually training and licensing to go do deliveries in the truck, picking was always fun and it gave you a real appreciation for these products. But one thing that really stuck with me was this perishability challenge. And what we would find is it would come time to pick the orders in the evening. And we would run through and start to discover that some of the stuff we thought we had in stock, we no longer have in stock because the batch had kind of aged out. And so it's time to get new stock. And so we had a funny process that we called kind of customer rescue, which is right before the picking, somebody would be assigned to run around and try to fill the stock back up of the missing item so that we could deliver a perfect customer promise. And that was always quite entertaining. I would do that generally on the weekend nights as well. And you would go out and put together honestly the strangest grocery basket you've ever seen as you went up to go. In fact, I remember one of our leaders in the group Phil Oaks had gone up into a grocery store and he basically filled the entire grocery cart with milk and grapefruit. And he was standing there in line and he said he became very uncomfortable because it was very strange looking and then people started asking him like, what are you doing? Why do you buy all this milk and grapefruit? And he said he didn't even understand it. He blurted out, oh, it's a new cleanse I read about. And by the time he got to the checkout counter, everybody in this line was talking about the new milk and grapefruit cleanse. And so I don't know if it really actually became a thing after that, but he was pretty excited for that. Well, and you've done all kinds of things in Amazon. I one thing that struck me as you were talking is you've done a lot of the zero to one things, a lot of the early stuff. And the zero to one things are super fun. They often don't work though. Or they don't work as you intended. And so you've got kind of a mix of things in your background that kind of we're still doing or we're not doing anymore. I actually have a lot of people come to me and they're like, Oh, Doug, you know, I've got this opportunity. I'm on this big established team. I've got this opportunity to go do this new wacky thing. But they don't know how to think about that. They're like, it's a wacky thing. Is that a career risk or am I, you know, how do you think about that if somebody were to come and ask you? Yeah. I think it's one of the reasons why I've stated it. I was on so long to be honest with you. I think it's exciting. I think nothing's guaranteed. But I learn as much from my failures as I do the successes. I love the ambiguity. And I love the challenge. I never liked the first month. The first month is always incredibly uncomfortable because I was asked, I was like, what did I do? I was just in a job where I was very successful. I knew how it works when you're getting buyers remorse like heavy. Yeah. Exactly. Can I go back? But it's after after I can't get my grounding, right? It's one of the most exciting things every single time. And yes, I have had some amazing failures as well as some amazing successes. And I always think it's for me. It's worth taking that risk and that chance because you don't know what that could turn into. Yeah. I think you have to be, you have to be somebody who likes innovation and ambiguity and new things. But I think it's incredibly rewarding. And I love, you said in the beginning, kind of what you love about building and that idea that you can from nothing kind of build a customer experience. And then you get the real roof. Like do customers actually shop this and love it? Or do they say, no, thanks. Not, you know, try again. But I think you touched on something in your last answer, which is you take away something whether or not it's a success or a failure. And I'm glad you've taken the risks. I think that's fantastic. And I think what makes Amazon work is we have a set of leaders inside who are willing to kind of take those kind of risks and move forward. Before we go, one thing I do allow is a single question. So I just won. So I'm going to listen very closely. Sometimes people try to sneak in two questions, but I'm only going to answer one. So would you have a question for me that I can answer? I do have a question for you. And it actually is related to sort of this moving quickly and scaling. I think every role that I've had sort of the bias for action leadership principle has always been one of the key LPS. And certainly we had plenty of that in this last year. Yeah. Okay, my question is two in one. My question is one, how do you motivate teams to really move at speed and move at pace? And then on that, how do you ensure that we're also insisting on high standards, which is another LP, well, we're moving at pace. Yeah. Okay. You smuggle in two questions, but I'll answer the both of them. They're both good ones. So bias for action is one of our leadership principles incredibly important. And I think in the early days, I probably heard Jeff utter the phrase, speed matters in business. Maybe once a week. I mean, all the time in the in the early days, he would always bring that back to us. He's like speed matters in business. And it matters for all kinds of reasons. You can have a defect. And if as long as it's going, you're potentially burning customers and kind of you're never going to see him again. Because if you've got a great new idea, time is ticking and you are missing the opportunity to delight them and bring them in, or you're giving the opening for a competitor who's going to do it. And so it was always speed matters in business, speed matters in business. And so we made it a leadership principle. It's been there for a long time. But as a second part of your question kind of touched on, there's got to be counter-availing forces because you just don't want to go, what are you going to give up if you're going to go for speed? And in fact, our leadership principles are set up to make sure that what are you trading off when you do it? I would say it depends. But in general, you don't want speed at the expense of the customer experience. And so now you may say, well, I'm going to launch something that's not as fully featured as I want, but it's still going to be excellent and delightful. And that would be a great reason to push this thing forward. If you say, well, I can launch it fast, but it's going to be kind of a crappy service. That's a terrible answer. And because you would actually lose more in the long run because customers might experience it and say, well, this is a terrible service. I'm not going to use it anymore. And so you just have to have you have to have employees kind of make sure they're judging kind of what am I going to do to solve the speed problem and go faster. Now how to do it? That is also tricky. You can't really just run around and tell everybody move faster. I mean, you could try, but people aren't going to listen to you that much. I think what I found is I think, and Jeff was actually a master of this as well, which is help teams. When you want them to move faster, help them think through what are the options to move faster. Really, don't just ask them to move faster, but say, okay, let's work together and brainstorm what are ways that we could accelerate progress. Where could we give up features, what are different solutions that maybe we haven't worked through? What are entirely different choices about what we build versus what we use from other services? And I think spending the time with teams, if I'm going to push a team to go faster, I won't just kind of arbitrarily without any understanding say go faster. I'll sit there and say, okay, what's holding you back from going, what would have to be true for us to go twice as fast as you're going now? And is there some way we can together invent that new solution? And so I do think it's important not to not to just set an arbitrary goal, but to really kind of help the teams work through those. And then the second one is I think it's a leader you have to be choiceful. You can't ask every team to go faster on everything that they're doing. It's just not going to work. And I remember Jeff used to describe it as saying we can't have like flat priorities, like everything is not equally important. And so it's I think it's really important as a leader to make sure if you're going to ask a team to because all these teams are fantastic. They come back to you with a plan that they think is their best possible plan. You know, we've worked on a very hard. This is it. This is we've like ticked and tied everything. This is the plan. And so if you're going to come and say, okay, that's good. But now how do we do it in half the time? You've got to be choiceful when you're going to go do that. And I'm very choiceful. Now, given what you've been doing, you've been sitting in the meetings where I've been saying we got to move faster in an half the time. But I'm not asking all the teams to do that. I mean, I think this space that you're in is incredibly important. Expanding perishable selection for our customers is incredibly important. But I think, you know, you go around and you find the areas that you think are the most important that are really going to move the needle. And then you work with those teams on those particular ones. So I think it's bias fraction is fantastic overall. If you're going to ask a team to really double down on speed of execution, you just have to be choiceful where you're doing this. If it means anything, this has been my favorite roll out of all. Oh, good. My favorite. I think the pace with which we've been able to work. Yeah. And the impact that we've seen from customers. Yeah. That's far. I mean, it's it's something that I know has been talked about quite a bit of Amazon. And we were just looking for how can we accelerate this? Yeah. And that's really exciting. Yeah. Fantastic. Well, Cidiar, thank you so much for joining us on the Learn and Be Curious Podcast. I really appreciate it. Thank you for everything you've done at Amazon. I mean, the career that you just walked through is amazing. The fact that you were at the ground level in our apparel business and you've experienced all we have all these shared experiences with Amazon wine and and all those good things. So and thank you so much for the work you and your teams are doing on on perishables. I think it is it's having a remarkable impact on our customers. It's really changing the way that they shop for groceries and changing the way that they interact with Amazon. And so I think that's fantastic as well. Thank you. And thank you for having me. And thanks everybody else for joining us again on this Learn and Be Curious Podcast. If there's any in-appreciation, or business or person that you're curious about, and would like to learn more about, just let us know, and we'll take a look as well. Thank you. (soft music)