Amazon’s Brian McBride: The king of the jungle

TV comedy series The Office put Slough firmly on the map. But while Ricky Gervais’s David Brent epitomised one of the worst sort of bosses anyone might have the misfortune to encounter, the loud, boorish and underperforming Brent is the antithesis of Slough’s biggest real life retail boss.

Brian McBride, the softly spoken Scottish managing director of Amazon UK, has no trace of Brent’s overbearing managerial skills. He is, though, one of Slough’s biggest defenders and even has the theme tune from The Office as his mobile phone ring tone. “Everyone knocks Slough, but I am a bit of a fan and am always talking it up,” he says.

McBride has headed Amazon’s UK operation for more than two years and has maintained its status as the undisputed top dog in pure-play e-tailing, leading the field by so huge a margin that it would be near impossible for anyone else to close the gap.

Rarely interviewed, McBride spoke to Retail Week about Amazon’s position in the market and potential challenges as it approaches its 10th anniversary in the UK.

Before joining Amazon in January 2006, McBride led T-Mobile. His background had always been in electronics, including roles with IBM, Dell and Xerox, where he began his career selling photocopiers.

With little experience in retail he was perhaps not the most obvious choice for the Amazon job, but the e-tailer was certainly a very attractive choice for McBride. “I did not decide on retail, what attracted me was Amazon,” he recalls. “It provided a great customer experience, had a great reputation and felt like a company driving through a very unique way of doing business.”

One of the biggest changes he has presided over is establishing Amazon UK in a wide variety of categories, having moved away from its origins as an online bookseller. McBride says: “If you look where we are now with toys, electronics, kitchenware and shoes, we are becoming a much bigger player.

“The big electronics firms, such as Sony and Canon, see us as the fastest-growing player in the market and we are in a much more important place for them now strategically.”

Although expansion into four new categories last year will not be repeated in 2008, there are some areas that Amazon will branch into. One will be digital downloads, launched on the US site last year. Amazon UK has signed up four big music labels for its offer, for which a formal go-live date has not yet been set. “The advantage of launching it later here than in the US is that all the wrinkles can get ironed out of the system first,” says McBride.

That is an advantage that aids Amazon UK in many areas. With the States’ e-tail market a year or two ahead of Britain, the US site leads the way with many initiatives. Although Amazon UK does not mirror exactly what the US site does, the business can learn from its mistakes and take advantage of the advanced e-commerce knowledge in the US.

This week, Amazon UK unveiled a new site design and navigation, which are more in line with the look and feel of the US site. The overhauled navigation will also help customers shop and explore Amazon’s latest categories and was born of considerable input from customer feedback. “This is one of the main reasons why people come back to our site – because it does refresh,” says McBride. “I think it is one of the easiest to use in terms of transactional web sites.”

This week, the business will also open its fourth UK warehouse, in Swansea, which will bring its total capacity to about 2 million sq ft. The location of the site will also help with fulfilment. “One of the key battlegrounds is delivery,” explains McBride. “Customers want more flexibility and options around delivery. With the Swansea site we are just off the M4, so we can get to the Midlands, London and Manchester, so can support same-day delivery in those areas.” At the end of last year, Amazon began to offer same-day delivery to customers in London and Birmingham, but hopes to extend this offer to five or six of the UK’s bigger cities over the next few years.

Categorial change

This year will also be about firming up the categories launched last year. One product that has displayed perhaps surprising growth has been shoes – a sector that had been notably suffering on the high street.

McBride says: “Shoes have done really well for us and we have been learning a lot about that business. How you buy shoes and the supply chain involved is very different from, say, jewellery or electronics, so for us it has partly been a learning curve. We have brought in specialists in this area and it has been great – bringing in new categories brings a real buzz to the place.”

Shoes have been so successful in the US that the product has spawned a separate Amazon-owned site, called Endless. Although there are no imminent plans, McBride says that a separate, dedicated shoe or other product-specific site is something that he is thinking about.

“The good thing with a dedicated site is that you can offer services and delivery options that you do not need to offer on the rest of the main site,” he explains. “The US is a lot bigger than us, so able to support a sub-brand. It is something that we will need to learn our way into and perhaps think about more next year.”

The success of shoes online could send another chill down the nervous spines of specialist retailers, but McBride does not see the stealthy march of online as a death knell for the high street.

“It is not our desire or intention for the high street to disappear or be damaged,” he assures. “We believe that physical shopping is a culture that people enjoy. It is great for us that people have options and can compare between what is going on here and on the high street.”

“I think that the credit crunch will lead to a much more differentiated and competitive high street than we have today. Middle-of-the-road players will be squeezed, not only from online, but by the supermarkets and the class acts.”

As more and more high street retailers improve their online offers and pure players such as Asos and Play.com continue to expand, McBride remains confident in Amazon’s position rather than feeling threatened by the competition. In fact, he relishes it.

“The more the merrier,” he argues. “There are very few pure e-tail sites that can compete across the board like us and we still think we are in a very different, if not unique, space.

“When I look at the multichannel retailers with transactional sites I think it is great, because they are training their customers to use the web. It gives us more exposure and many of their customers will compare prices to Amazon.”

Without a physical store presence, price is something that Amazon can move and modify almost on an hourly basis. McBride says: “We constantly monitor our prices and change them. Prices for key items can change several times a day, which is good for our customers, because they know they will always be getting the best price.”

McBride sees one of his biggest challenges as handling growth. “It is a lovely problem to have,” he says. “But there is no slack in the system and everyone here is running flat out.”

Since joining the online giant he has bolstered the senior UK team. “As the business has grown it has justified a larger senior team. I have some real heavy hitters on board now,” says McBride.

The most recent appointments include Shaun McCabe, formerly of Homebase, as finance director and Wendy Mansell, from Gillette, as HR director.

He hopes that Mansell’s hiring, in particular, will help address the problem of staff retention. Because so many retailers are trying to find employees with solid online knowledge to grow that component of their businesses, Amazon is a hunting ground for new talent. “People will pay a premium to get Amazon staff,” says McBride.

But he is determined to stay focused on growth. Last year, Amazon’s operations outside America outpaced the US business for the first time in the company’s history, growing 30 per cent across the six international sites. McBride confirms that UK growth was north of that.

Despite the challenges that accelerated growth have brought, McBride is optimistic about the future. Without some of the spiralling overhead costs that are plaguing many other retailers and with the backing of one of the US’s most powerful brands, he is probably uniquely positioned to show such confidence.

If his success continues, perhaps in future the first thing that Slough will call to mind is Amazon rather than The Office.