June 21, 2024

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Specialists in fashion

Amazon Australia’s director of operations talks warehouse tech and growth

Amazon Australia’s director of operations talks warehouse tech and growth

Mindy Espidio-Garcia has worked for Amazon for over nine years, most recently as the head of its robotics sites in the US. In May, she joined the company’s Australian business as director of operations, where she is responsible for its fulfilment and continuous improvement teams.  We recently spoke to her about the company’s expectations for peak season, how it aims to grow in the local market and the secret to Amazon’s leadership in the logistics space.  Inside Retail: What are Amaz

e Amazon’s expectations for peak season this year? 

Mindy Espidio-Garcia: This is certainly one of the busiest times of year for us. We know from our research that more than nine million Australians are planning to head online to do some or all of their holiday shopping. We’ve been busy all year making sure that we can serve their holiday needs. 

It’s a very proud milestone for the Australian team. December marks our fifth year operating in Australia, so this is our fifth festive season, which means we can’t take our foot off the pedal when it comes to investing in our operations network. We’ve continued to invest in and expand in a very broad way to better service our customers around the country. 

We’ve increased our storage capacity by 100 per cent, which means that Australian small businesses have more space to be able to bring in selection for our customers. We’ve expanded that selection to over 200 million items across 31 categories. We’ve doubled our operational footprint across Australia, and we’ve strengthened our delivery network by adding a number of sites. 

Our Amazon robotics site opened earlier this year outside of Western Sydney, and we’ve also opened our sort centre in Craigieburn, just outside of Melbourne, and a brand-new delivery station in Bella Vista. These obviously help us get closer to our customers so that we can offer things like free, one-day delivery [through Prime], especially in Sydney and Melbourne. 

We’ve created over 1250 permanent jobs this year, and we’ve got over 2000 seasonal roles for the holidays. We’re quite excited about that. And we’re making the holiday shopping easier for our customers as well. 

We’ve added the top 100 toy list to make it easy for Australians to select gifts for their loved ones. We’re extending the returns deadline, so any purchase made from 1 November can be returned until 31 January, and we’re gift wrapping this year, so we’ll send packages not only to [customers], we can also send them directly to recipients anywhere across Australia and globally.

IR: You’ve spent a number of years at Amazon in the US. Can you tell me a bit more about the roles you’ve held? 

MEG: I have always found Amazon to be a place of great opportunity, and it has certainly delivered a number of opportunities for me over the nine years that I’ve worked with them. I actually started as a shift supervisor in our operations teams as a university hire after I went back to school after I had my children. I was able to learn a lot of skills, both technically about our operations, but also as a people leader. I spent a lot of time developing our teams and ensuring that they had the skills needed to be able to grow their careers with Amazon as well. 

Over the next four-and-a-half years or so, I led teams and operations until I took over our process engineering, or continuous improvement team, for about a year in the US, focusing on innovation and continuous improvement efforts. And then I went back and led our Amazon robotics sites, which are big sites, with about 6000 employees in the buildings. I led two different teams over a couple of years, and then I took over a region of robotics buildings where I led six buildings in the southeast United States, before coming here to Australia. 

Now, as the director of operations in Australia, I lead our fulfilment teams, which [include] operations, logistics and transportation, and supply chain teams – as well as our continuous improvement teams as we look at our business holistically.

IR: For a lot of people, Amazon is synonymous with really sophisticated warehouse technology. Having had a front-row seat to that over the years, what do you think has enabled Amazon to continue to raise the bar when it comes to using technology to improve that aspect of the retail industry? 

MEG: I really think it comes down to the two-way communication that we have with our associates. Taking the ideas of the people who have their hands on the process every day and incorporating them to continuously improve our process, make jobs easier and set up a really good environment for our teams. We’ve invested over $5.3 billion here in Australia, and quite a bit more than that globally. 

Building our infrastructure and ensuring that we can get as close to customers as possible means that we can deliver to them in a really timely fashion. In this way, we’re both serving our associates and making their jobs easier and ensuring that we’re listening to them and taking their ideas into account. We’re also getting close to our customers and ensuring that we can deliver as fast as possible. So it serves both purposes.

IR: Can you tell me how the warehouses with robotics at their core are different from some of the more traditional warehouses in Amazon’s logistics network? 

MEG: We have robotics in some of our fulfilment centres, and we don’t have robotics in some. The thing that makes robotics centres a bit different is the technology that’s [in them], so we have humans working next to a robot, or with robots, versus not. 

Traditionally, when you think of old-school warehousing, there are library shelves and pickers walk to inventory. In our robotics centres, the inventory comes to our pickers, so their job is made infinitely more easy. That’s probably the biggest difference. Robotics enable speed, so in a large area like Sydney, we have the ability to deliver customer orders quite a bit faster – from the time they click ‘buy’, to the time that it hits their door, which is really a big deal. 

The robotics centres also enable capacity for us. These are large-scale buildings. I don’t know if you have ever been out to BWU2 in Sydney, but it’s about the size of Taronga Zoo. Because of that, it allows us to store more items for our small businesses and give them capacity to reach customers and increase our selection. Those are the big benefits for our robotics centres.

IR: With your move to Australia, is it safe to say that this is an area that Amazon is looking to invest in by opening more robotics centres in this market?

MEG: I don’t have a crystal ball, but we’ll continue to look at how we can serve our customers in the best way possible and get them the biggest selection as fast as possible. As we continue to grow, it certainly could be something that we explore, but we’ll see what happens in the future.

IR: As a relative newcomer to e-commerce in Australia, what is your sense of the industry compared to the US, where online penetration is much higher? 

MEG: Coming from the US, Amazon has been there for quite a while. In Australia, we started our fulfilment [offering] about five years ago, but I think Covid accelerated the need for folks to have items [delivered]. They couldn’t get out to the stores necessarily with all the quarantines that were happening. I think that has [driven] an acceleration of e-commerce where I can get items [delivered] to my home without having to go out. 

Our research demonstrates that more than half of people – 54 per cent of people in New South Wales – are shopping online more than previous years, and new online retailers are also increasing by about 64 per cent. So I think e-commerce is growing in Australia and will continue to grow.

IR: Will we ever see some of Amazon’s retail offerings – like Amazon Go – in the Australian market? Is that in the realm of possibility at all?

MEG: Everything is possible, and I never leave anything off the table, but I don’t know what will come in the future. 

IR: You mention that you anticipate people shopping online more in Australia. What will it take for Amazon to win over those customers?

MEG: It’s really about how do we keep delighting customers and ensuring that people are excited to come back and shop online with us. Our continued ability to get close to customers and ensure that we can offer very quick delivery, is what makes our customers quite excited. 

Obviously, being able to go online and find the selection that you’re looking for, getting value – and shoppers are looking for those savvy deals – I think that is what’s going to allow us to grow, and that’s ultimately my aim.