Amazon Home Services: threat or opportunity?

Paul Laville, group chief executive of T21, on why the launch of Amazon’s Home Services could be an opportunity for good independent retailers

Is Amazon’s new Home Services a threat to independent retailers?

I might change my tune when Amazon starts offering cut-price sales training to the masses, but for me it looks like it could be an opportunity.

The way I see it, Amazon Home Services acts like a directory of professionals who can install certain products Amazon sells online, including smart-home technology.

For those retailers who can make the model work, and if they’re willing to put themselves forward as professional providers of these services, then maybe it could deliver a half-decent revenue stream.

Of course, it all depends whether electrical retailers are allowed to provide that service, according to Amazon’s selection criteria.

At the moment, Amazon are saying their installation partners have been ‘hand-picked’ from a choice of local professionals, so it remains to be seen whether they’ll permit potential competitors to step in.

I hope they do. The Amazon juggernaut has disrupted many traditional business models over the years and left a scattering of destroyed companies in its wake. But it’s also helped many others succeed: Amazon Marketplace has enabled small businesses to find a foothold, plus it’s accelerated the growth of specialised marketing companies who know how to use Amazon’s worldwide reach to benefit their clients.

Paul Laville, managing director, T21
Paul Laville, group chief executive, T21

A decade ago, the publishing industry looked doomed by the launch of Kindle, but in fact it gave birth to a platform that has since enabled thousands of independent writers to find an audience and sell their books at no detriment to the industry.

The remnants lying alongside Amazon’s road to worldwide domination belong mostly to businesses that tried to compete without understanding why the company is so successful. They thought it was all about price.

However, Amazon primarily succeeds because it makes it easy for people to get the things they want quickly. CEO Jeff Bezos’s mantra is that the customer comes first at every stage of their buying journey, so, from that perspective, it was always inevitable that Amazon would find a way to provide installation.

According to the research Amazon conducted in the UK ahead of the launch of Amazon Home Services, it seems certain types of installation are affected by massive boredom: installing smart thermostats is apparently one of the ‘Top 5 Most Tedious Tasks’ listed by the research respondents (alongside bed assembly, TV wall mounting, tap replacement and patio furniture assembly).

To me, it seems unwise to stand in front of the juggernaut and defy it. It’s a far better plan to find a way to jump on board and take the wheel.

Perhaps, with its new Home Services platform, Amazon is extending a hand for those who want to do just that.