Jason Busch talks to Alex Gagnon at ABX: Innovation and growth at Amazon Business

On April 20 Jason Busch, the founder and CEO of Spend Matters, arrived in London from Chicago to attend this year’s Amazon Business Exchange (ABX). ABX is the flagship event of Amazon Business, the professional procurement solution that offers customers the choice of millions of products, invoice management and exclusive features tailored to a business’s needs, enhancing Procurement’s impact as an organization’s value driver.

Our own Mr. Busch, who had his colleagues lead the write-up because he accidentally cracked his computer screen whilst in London, noted the event was well attended despite competing against both the CIPS sustainability conference on the other side of town and travel restrictions within an increasing number of companies owing to budgetary constraints.

Jason notes that, “Constantly on show at the event was a theme that Amazon Business is not an island — or platform which it technically is, in conjunction with AWS Supply Chain — but rather an extension of customer e-procurement systems. Even though the number of partners in attendance was greatly outnumbered by end users in procurement, Amazon Business is clearly taking a partnership and systems extension strategy versus minimising existing client technology infrastructure.”

While there, Jason had a conversation with Alex Gagnon, Vice President of Amazon Business Worldwide, to discover more about the rise of Amazon Business in the B2B world, its growing success on both the sell- and buy-side, the organization’s expanding global presence and the leaps it has made in terms of innovation and partnerships.

Amazon Business, he learned, now has partnerships with 96 of the top 100 Fortune companies in the US and 66 of the FTSE 100 companies in the UK. It is on a $35 billion growth rate for this year and has a two-year CAGR of 25% in Europe. In the UK alone, it works with 15 of the largest universities and 14 of the most populous cities, all procuring from Amazon Business. It now serves more than 6 million businesses worldwide.

Software and innovation have lain the foundation stone for Amazon Business’ strategy. As Alex explained, the internal experience, the marketing, the many and diverse supplier relationships it nurtures, its enhanced selection strategy and superior delivery experience — basically, the company culture — have all played their part in ensuring its continued success.

Jason began the discussion by getting to grips with how the past few years changed the role of procurement. Simply put, the pandemic has proven to be a watershed moment for procurement. As Alex said: “I often say that Procurement is a function we don’t think a lot about until something goes wrong. And the pandemic has certainly proven that.” With supply chains constrained and macroeconomic changes that reinforce the need for efficiency and reduced costs, procurement’s value proposition stands out in stark relief.

Then, from a wider interest standpoint, Jason wanted to know more about Amazon Business’ behavior as a strategic partner to its customers. The world, he believes, is very aware of the organization’s origins and success in the B2C world, he was curious about what the firm is accomplishing now in terms of capabilities and partnering.

The logical next question was about how Amazon Business facilitates access to that value as a strategic partner to its customers. While the world knows the organization’s origins and success in the B2C world, it might not have followed the company’s more recently implemented capabilities and partnerships. Alex explained that the changes of the past few years, such as the shift to at-home work culture, saw it forge deeper, more strategic partnerships with both large companies and those that work in the public sector.

In the case of large businesses in particular, the partnerships have enabled Amazon Business to be more forward-thinking in implementing its services. Traditionally, it would mine a few years of demand data to forecast what consumers will buy. “Now,” Alex explained, “what we’re getting into with larger Amazon partners is that they will give us a forecast. We have some type of understanding of their needs over the next 12 months. Then we start planning from a forward-looking standpoint.”

That ability, however, speaks to a very specific customer profile. So, Jason turned the conversation to how Amazon Business helps the other organizations that make up its diverse customer base. Gagnon explained that while Amazon Business has historically focused on SMBs, it currently invests more effort into these larger organizations. But, he continued, those investments still pay off for smaller organizations. If you are a small company, for example, Amazon Business provides access to a procurement department that you would not normally have by virtue of developing capabilities for larger organizations.

Ultimately, Alex was clear that the focus on larger organizations was not a limiting factor for Amazon Business. In fact, the company’s immediate outlook was expansive. “We have a lot of opportunities ahead of us,” he stated. “We’re really excited by the customer response and the fact that now the breadth of those customers is increasing. We’re building a lot of new relationships, and that’s very exciting.”

Of course, Jason and Alex went into further detail regarding those opportunities, outlook and relationships, such as the potential to pursue deeper partnerships with Coupa, SAP, Jaggaer, Ivalua and other procurement technology providers.

You can watch the whole interview here.