The Future of B2B Innovation

[00:00:04] Phillip: Hello, and welcome to Future Commerce, the podcast at the intersection of culture and commerce. I'm Phillip.

[00:01:37] Brian: I'm Brian.

[00:01:39] Phillip: And you're on the road for like 17 weeks.

[00:01:42] Brian: True.

[00:01:42] Phillip: You've got so much travel in your schedule right now.

[00:01:47] Brian: And I thought Q1 one was busy.

[00:01:48] Phillip: Oh my word.

[00:01:48] Brian: Q2 has been worse. Q2 is crazy.

[00:01:52] Phillip: It's going to be crazy, and we're going to cap off Q2 in the best possible way. In just a few days' time, we'll be at the Museum of Modern Art returning for our 2nd year at the MoMA for VISIONS, and that's on June 11th. We'd love to see you there. And we have an incredible stacked lineup of speakers, incredible leaders in our ecosystem, and also just incredible culture innovators. I think it's going to be probably the greatest thing that we've ever done. I say that with zero hyperbole. Go to futurecommerce.com/VISIONS. I don't know why I chuckled there when I said that.

[00:02:32] Brian: It's true.

[00:02:32] Phillip: And there's probably no tickets left. Get on the waitlist, and we'd love to have you  come join us and save the date. We are looking at Brian, you and I were just in Los Angeles, and I toured some venues for a rumored Los Angeles VISIONS that could happen in the Fall.

[00:02:50] Brian: Rumored?

[00:02:51] Phillip: Cool things to happen. Yeah.

[00:02:53] Brian: Rumored?

[00:02:54] Phillip: That's the scuttlebutt, Brian.

[00:02:57] Brian: I'm trying to flex the line between saying rumored as in it actually is rumored and rumored as in it's not rumored. I don't know. How was my intonation there?

[00:03:10] Phillip: Many people are saying...

[00:03:12] Brian: Rumored?

[00:03:15] Phillip: Because you're, like, a few weeks in now to many, many weeks of travel. You were at B2B Online in Chicago.

[00:03:24] Brian: In fact, we're going to be diving into a little interview that I did there. I'm really excited about that. So stay tuned for that interview ahead with Philips, which was excellent. Good conference overall. B2B Online, absolutely worth my time. It's B2B, and I say this a lot, B2B is as much the attention economy as consumer is. And a lot of people in consumer have no idea how much more, in fact, the B2B can be the attention economy than consumer can because the relationships are long standing often.

[00:04:08] Phillip: Oh my gosh. Yes. And the bad decisions are longer standing.

[00:04:11] Brian: Longer standing. Correct. Yeah. And a lot of room for transformation, a lot of talk of AI. You think AI is on the lips of people in consumer. It is. It's also all over B2B. It was all over the conference. And there was a great session actually from Lucidworks on how to incorporate AI into your organizational flow.

[00:04:34] Phillip: What does that mean?

[00:04:35] Brian: The framework was really good. Well, so his point was that...

[00:04:39] Phillip: It means how to use AI to hire and fire people.

[00:04:43] Brian: Exactly.

[00:04:43] Phillip: Just kidding.

[00:04:45] Brian: Oh, you could use it in a lot of different ways. That wasn't... His point wasn't to be, like, super prescriptive about how to use AI.

[00:04:54] Phillip: Oh, no. You'd never want to do that.

[00:04:54] Brian: It was more about how to go about using AI, which his point was...

[00:05:01] Phillip: Step 1: Sign in to the system.

[00:05:03] Brian: Sign in to the system. Exactly. His point was to make organizational changes and process changes to incorporate what is a rapidly changing set of models because things are moving so quickly. If you try to build too heavily around a specific model, then you're going to get into a sticky situation when all the new models are released.

[00:05:33] Phillip: This actually is a really keen point, something that just happened, and maybe this is a little side tangent, but I think it actually highlights the risk that businesses have. I know that nobody wants to say they're early adopters of AI at this point. I think the world has just broadly adopted. There is no early adoption anymore. It's just this is the world we live in now. I have to pay $20 a month in every piece of software that I have so that I can unlock the AI features. My kids, I came home the other day and my kids had made cupcakes, Brian. And I asked them how first of all, from scratch made cupcakes. Total surprise. Had no idea they were going to do it. I said, how did you find a cupcake recipe? They said, "Oh, we just went to Google, and we just typed in cupcake recipe."

[00:06:21] Brian: Wait did they say... They Googled it, or did they search it up?

[00:06:25] Phillip: Oh, they said, oh, we searched it up on Google. That's true.

[00:06:27] Brian: My kids say "search it up."

[00:06:28] Phillip: It's true. It's a Gen Alpha thing.

[00:06:30] Brian: Search it up. They don't say Google it.

[00:06:33] Phillip: They say "search it up." Skibbity, Ohio Riz. That's what they say. Just like that. With zero cringe.

[00:06:44] Brian: {laughter} With zero cringe.

[00:06:46] Phillip: Yeah. That's right. He ate. No crumbs. Alright. So which is not what I did with the cupcakes, by the way. The cupcakes were in a little too long, but the recipe, I guess, was just AI generated. It was Google Gemini. It just gave them the recipe. You never have to read someone's long SEO laden blog recounting their trip to the grocery store and the summer that they spent abroad in Italy in order to bake cupcakes. So that's, I guess, one good thing that's come out of the AI revolution, but here's the risk. How do you have repeatable and definable business processes that utilize AI in your organization when all of the platforms are constantly changing the systems underneath them? And that, I think, is the main risk factor, especially for enterprises and especially for businesses that are trying to modernize. This is tough.

[00:07:45] Brian: Did you just say modernize?

[00:07:47] Phillip: Oh, gosh. Kill me.

[00:07:49] Brian: Double take.

[00:07:50] Phillip: This is an interesting thing. Besides the hubbub around Scarlett Johansson and her

[00:08:00] Brian: Her? Did you say her?

[00:08:01] Phillip: Her. Her frustration with Sam Altman and OpenAI. Beside that, what happened when they took the Sky Voice offline because that was the voice that reportedly sounded like Scarlett Johansson?

[00:08:15] Brian: You realize they were playing directly into not her, but the Terminator. When you call something Sky Voice, you're half way from Sky Net.

[00:08:26] Phillip: Yeah. The Terminate-her.

[00:08:30] Brian: {laughter} Oh. Oh.

[00:08:31] Phillip: They did terminate her, actually. When they took her voice offline, I had a lot of voice conversations with the Sky Voice. And every one of them, the history of that and the memory profile that had been built around the user profile, just like a feature they have in OpenAI, was completely decimated. So now all the training data of who I am and all the things that I care about and some of my personal experiences is gone. And this is the problem, it's a perennial problem in technology, is you're building on other people's platforms. There has to come a time in the enterprise where that's no longer the case and you have more ownership over the model and the platform so that people can't just rip and replace underneath you.

[00:09:19] Brian: Terrible. Terrible.

[00:09:21] Phillip: Wow. That's great. Alright, Brian. Set us up. You're speaking with Antonio Espinoza. Tell us a little bit about your conversation you're going to have.

[00:09:28] Brian: Yeah. So Philips has done a great job setting up a center of excellence for commerce and I think that's essential for a lot of these larger conglomerates and companies with multiple divisions. There's just too much, well, repeat of work that happens within these larger companies that could be consolidated provided it's set up to be flexible and adaptable to the specific needs of a specific department. But I am a big believer in that model. Using the right underlying technology is essential, and Antonio gets into a little bit of that in our interview. I think that was great. We did talk a little bit about what we saw at the conference as well. So not too much a repeat of our conversation we just had, but I do think it's great to get some in the moment reactions to B2B Online. Again, absolutely worth my time. B2B is a sector that I see still wide open for innovation and for modernization. But we go back to, like, the Kirsten Green thesis. Kirsten Green, Founder of Forerunner Ventures and how she expanded her thesis to include B2B, and I think that is telling of the amount of opportunity there still is in B2B in digital if you're an agency or you're a platform. I think that we're going to see a lot of skewing towards that because there's still, well, a lot of money to be made. There are a lot of problems to solve. And so, I mean, I think if you look at some of the big ecommerce platforms, their next moves will be to rebrand as B2B-focused or have a B2B specific offering that they make a big splash about in the not so distant future. And I may know some things about this that I'm going to talk about.

[00:11:35] Phillip: Oh gosh. Of course. You Brian, you were sort of giving a bit of a shorthand back reference to I think it was Step by Step Season 11, if I recall, wherein we interviewed one of the industry's best and brightest, Kirsten Green. We should link that up in the show notes. Go check that one out because I do think that that's, like, now looking back 18 months or so, it seems very prescient...

[00:11:59] Brian: Yes.

[00:11:59] Phillip: On some of the innovation curve that's coming to B2B and some of the opportunity that's there for more businesses to service customers better through technology. Of course, it's kind of always been the case, but I think it's more true now than it has been. Alright. Well, Brian, looking forward to hearing this. Check it out. Right after the bump, we have Antonio Espinoza, who's the Head of Digital Engagement and Strategy at Philips from B2B Online.

[00:13:19] Brian: Maybe you could just give me a quick summary of what you're doing at Philips and how it's impacting the business.

[00:13:26] Antonio: Sure, Brian. Sure. So just very, very quick history. You know, Philips has been on its own transformation journey and made a radical pivot towards health care away from television and light bulbs of days long ago. And part of that transformation journey has also been how do we bring the right digital transformation and put that in place. Recently, we just made a pretty significant change across the organization from being structured in a way where we were heavily centralized in terms of all the activities and execution that we wanted to do in the digital realm, really had to funnel through a central organization, which was very slow and the opposite of agile for us. And so the current focus is our new operating model, which basically has centers of excellence, including one around digital. And it's more of a federated approach where we have some centralized structure, but we're really empowering our 15 different business units and health systems and our regions to really have that fast, quick execution and response to customer needs.

[00:14:26] Brian: That's incredible. And to kind of break it down, you all have created a set of processes and technology base that you can then distribute out to all the different, you said, 15 different divisions within Philips.

[00:14:42] Antonio: Right.

[00:14:42] Brian: That's so impressive. Coming back from my agency days, I've seen this implemented before. It's a lot of work to get to where you are. Did you pick a particular technical route? How did you end up with the situation you have now?

[00:14:57] Antonio: Sure. We really tried to listen first and foremost to the needs of our customers, and the feedback we were getting was that we were not giving them what they needed. When we think about, for example, our commerce experience as one example, You know, we realized that companies don't buy from us. People do.

[00:15:16] Brian: Mhmm.

[00:15:17] Antonio: And [00:15:17] the experience we were providing was not one that the average consumer today expects. Amazon is this gold standard. Whether you work for a hospital or not, you probably shop on Amazon. You have a certain expectation level. And so when we thought about the structure we had to have, the enablement we had to provide to our businesses and to the regions, we had to be thinking about things like that and really trying to understand customer first what had to evolve. [00:15:42]

[00:15:43] Brian: That's everything that I ever hoped you would ever say on a podcast like this because I think at Future Commerce, we really believe that people make purchases and the way that people evolve changes commerce. And so as we think about how the consumers are changing, we are actually thinking about how businesses are changing, how they purchase as well. And, actually, you're giving just like a perfect preview into the session that I have today about drawing on inspiration from DTC to create better B2B experiences. And so I think the idea that a B2B purchaser is looking to Amazon as their guide for how they should purchase their business needs is just the next level of the Amazon effect. How have you seen or maybe even been able to counter some of this? What does that look like for your different units?

[00:16:52] Antonio: I'll first make mention that part of what we've also realized, and there's actually a colleague of mine at work that phrases it this way. At Philips, we don't have an ecommerce problem. We have a commerce problem. And we have developed so much of our own complexity and so much of our own convoluted processes that when we look at the end customer or consumer, we really had to rethink how we are set up. And so part of that might be obvious, but a lot of what we're focused on is having a regular dialogue with customers and different personas at our different customer accounts to understand the experience that they're really wanting and to together develop that road map that we need to work towards.

[00:17:37] Brian: I love that. Yeah. Another thing that we get into a lot in Future Commerce is the idea that dialogue and discourse is power. And the ability to talk actually sit down and talk with your customers and then incorporate what they're telling you back into the process, back into the experience you are creating, that's actually part of the dialogue. Product development is part of the dialogue with your customer. And  whether you talk to them or not, you're talking to them through what experience they have when they go to make a purchase and when they actually get the product.

[00:18:12] Antonio: Absolutely.

[00:18:13] Brian: And so I think again, this is all stuff that's super impressive to me. Coming into this show, what are some of the things that you kind of hope to see at a show like this that's focused on innovation and what's next for B2B?

[00:18:28] Antonio: I'll tell you what I was interested to see was how much things like AI are being talked about and how they're being talked about.

[00:18:37] Brian: Yeah.

[00:18:37] Antonio: That's just one quick example where AI is somewhat everywhere. But it does beg the question of, well, what is AI?

[00:18:44] Brian: Yes.

[00:18:45] Antonio: And how do we approach it practically? And do we even need to approach it? There are some people who actually say you don't even need to focus and stay away from it.

[00:18:52] Brian: Right.

[00:18:52] Antonio: So I was really curious to kind of come in and hear now some of the different viewpoints that are being shared.

[00:21:42] Brian: Yeah. I think there's a lot of lipstick on pigs, if you will. It's really hard to tell if when someone says they're using AI, it's like, okay, are you just using machine learning that we've had for 20 years, or are you using generative AI, AI solutions of the past couple years? And I think that's pretty easy to see through once you start to get into it. But I think [00:22:06] there is a difference on how these things are being deployed. Is it just being slapped on to a solution, or is there a meaningful use case? And we were, again, talking about this in the preshow. B2B actually might be the place where you're going to see more benefits upfront of using AI before consumer starts to. [00:22:29] What do you think about that?

[00:22:30] Antonio: I fully agree with you. I fully agree. When you look at some of the problems that we're trying to solve for, I think this can be a huge lever. I also think that while there are differing viewpoints on AI, it is something that is here and it is moving faster than anything we've seen.

[00:22:46] Brian: Yeah.

[00:22:47] Antonio: So in my own view, to not actually draw close to it and at least understand this is not an option. I think [00:22:55] no matter how you and your organization decide to leverage or not leverage it, being close to really understanding what it is, how it is being used, the upsides and the downsides or the places to kind of look out for is just so critically important. [00:23:06]

[00:23:06] Brian: I think it's so smart because it is a buzzword, obviously. It's everywhere. It's the new omnichannel. Right? It's the new word that you see on every solution. And so, actually, if you don't understand it, you're going to get the wool pulled over your eyes, or you're going to miss a huge opportunity.

[00:23:23] Antonio: Yes.

[00:23:23] Brian: I think you're dead on about that. And there was a great talk yesterday by the CEO from Lucidworks about because AI is moving so quickly and because it actually is most effective in an enterprise tool, as a part of an enterprise stack, you need to start thinking about how you're architecting for its evolution. Have you started to kind of think through some of that, and you said it's moving so quickly. How's that impacting your center of excellence?

[00:23:54] Antonio: Yes. Yes. So two things that I'll mention. One is we have quickly realized, you talked about lipstick on a pig, etcetera. We have to really also be focused on making sure our underlying structure and information architecture and datasets, those things, we have to have our house in order there if we really want to be able to leverage and scale things like AI. That's one. But two, we are of the opinion that we really want to find the right partners and vendors to leverage in this space. We could go and do it on our own, but the value in having an outside partner is that they get up and live and breathe this stuff every day.

[00:24:33] Phillip: Yes.

[00:24:33] Antonio: And they're going to be focused on being at the forefront of this very fast evolution so much more so likely than you are in your internal company where you have a 1,000 other things going on.

[00:24:44] Brian: I could not agree more.This is going to make for kind of boring content because I think we're on the same page so much. No. It's amazing. I love it. I think this is good advice. I agree with you that while there are certain things that might be good to have within your walls, a certain level of expertise and a certain level of awareness and education about, this using experts, let's say outside of your org, I almost feel like you'd be stupid not to.

[00:25:14] Antonio: Yes.

[00:25:14] Brian: So, yeah, again, great advice. I'd love to merge the conversation we kind of had at the beginning of the podcast with the one that we're currently having. So we talked about how purchasing really is a person to person thing regardless if your DTC or B2B, and so we need to architect for how people are wanting to make purchases in the Amazon effect. How do you see what's happening right now with AI in in B2B? What opportunities do you see to help improve that B2B purchasing experience and make it all about the new habits that we're forming?

[00:25:57] Antonio: Sure. So I think there's many areas of opportunity. I can tell you one or two areas where we're currently focused. And this one might seem simple, but I can tell you it's been a big, big hurdle for us to overcome. And, really, it's around content. So today, one of the core areas where we're leveraging AI and generative AI specifically is around being able to create and scale content very quickly. We talk about in marketing and advertising of being more personalized and more specific to various personas. We can get very segmented all day, but unless I have the right content to support that personalized and that specific segmentation, I'm not going to be able to execute on that properly.

[00:26:35] Brian: Yes.

[00:26:35] Antonio: And so same thing from a buying or commerce experience. When you come and have the experience with us, we want to be able to have the right content to support you as the persona you are and at the point in the journey of where you are as well.

[00:26:48] Brian: Do you see your customers leveraging AI and then using the output of that back into their relationship with you? So you're using AI. Are they also?

[00:27:01] Antonio: Great question. So we do know that many of our health system customers are leveraging AI, but I will tell you, they're also still trying to figure out how to leverage it.

[00:27:10] Brian: Yeah.

[00:27:10] Antonio: What I hear most often is around areas of things like content. That's probably one of the ones that I hear the most. But we're just now starting the dialogue with them on the last part you mentioned, which is a mix of how maybe could or should they be using it, but also in relation to us as a supplier, what might that biggest synergy lever be?

[00:27:29] Brian: That's interesting. That's super interesting. What are some of the use cases for something like that?

[00:27:34] Antonio: So I think, you know, one of the main use cases where we're focused is around thinking about if I'm on the customer side or the hospital side, how can they be smarter and faster and more efficient around their ordering such that there's less manual intervention? There's less manual kind of man or woman support needed to really drive processes like that. Right? Where can they leverage either automation or AI to support, and then thus work at our kind of systems, connect up with that in the right way so it ends up being seamless, and it truly ends up being automated.

[00:28:12] Brian: Bot to bot. It's interesting. Yeah. To take care of the things that maybe humans...  [00:28:17] Save humans for things that are better done by humans and let the systems handle things that are better handled by systems. [00:28:24]

[00:28:24] Antonio: Absolutely. Yes.

[00:28:25] Brian: I love that. Yeah. We're talking a little bit in generalities, but I think that's dead on as far as how we're going to start to see some of these bots evolve. These AIs get used is actually with each other as opposed to with humans, which is I mean, is this just the new API? {laughter} Is this just a new way of connecting how machines interact? I would imagine we're going to explore more of that in the coming months and years, and I'm excited about that. Antonio, this has been a phenomenal conversation. I would love to ask you, at end of all of our interviews, we always ask so what do you see the future of commerce looking like in the next 12 months, but also maybe a little bit further out into, you know, 36 months?

[00:29:14] Antonio: Yeah. Great question, Brian. I mean, you know, I have some ideas, but I know my ideas might also need to evolve so quickly given the state of things. But what I go back to is not something new, but I think it's going to be new in how it's applied. And it's really around personalization and predictability of the experience from our customers or our consumers.  [00:29:36]Gone are the days where we should be interrogating and asking a 100 questions of what kind of experience do they want. We need to better leverage the data and the understanding that we have of them already to deliver these automated tailored experiences to, again, allow them to get more of their time back to do the higher order things that they need to do. [00:29:54] So I think that's going to continue to be a big focus. And, again, I think leveraging these tools like AI in the right way to support that end.

[00:30:02] Brian: Love that. Well, thank you for coming on Future Commerce.

[00:30:05] Antonio: Thank you, Brian. Thanks for having me.