Amazon on Tuesday began rolling out Amazon Local Services, which lets customers purchase professional assistance for setup, installation and repair work.
Service providers will be covered by Amazon’s guarantee. They will be licensed and insured, and they will have to pass a background check.
The idea initially is to tie Amazon purchases to recommended service providers. For example, if a consumer were to buy an air conditioner from Amazon, the company would offer a list of firms that would install it. Over time, Amazon plans to expand its local listings to encompass a broad range of services.
“The interesting thing is where this is going to show up,” said Greg Sterling, vice president of strategy at the Local Search Association.
Amazon “already has the daily deal property for local deals, which it’s done in conjunction with LivingSocial for some time,” Sterling told the E-Commerce Times. “Is this going to be integrated there, or are they going to integrate with Amazon.com, or will they build out a separate property?”
In February, Amazon wrote off its investment in LivingSocial after having incurred hundreds of millions of dollars in losses.
Amazon Local Services is rolling out first in New York, Los Angeles and Seattle.
Trust Comes First
Amazon will need to establish a track record in the handyman department.
“If you have an appliance installed your home, you need to be sure you have service people that are knowledgeable and accredited and you have the appropriate information on them,” said Rick Moss, president and cofounder of Retailwire.
Home Depot has a similar service “and relies on their customers to trust them … and it’s a lot about their brand and the expertise of their sales staff,” Moss told the E-Commerce Times.
Amazon is “seen as a place to get things cheaply and efficiently, and hasn’t established their expertise on what to do when purchasers get home, so they have to rely on Amazon’s expertise to screen these people,” Moss observed. “It’s not a given. I don’t know that Amazon could quickly establish that.”
Granted, Amazon “has a broad reach, and it may be a fairly simple thing for them to set up on a mass scale,” he said, “but I don’t think Amazon will ultimately be the first place customers will think of to go for a recommendation.”
On the other hand, Amazon “has this very significant brand and is trusted, and most people still trust Amazon or at least feel neutral or positive towards them,” Sterling pointed out, “so I think that gives them an advantage.”
Reaching Out and Touching Millions of Someones
Amazon is targeting small businesses, a market that’s notoriously fragmented and difficult to serve.
“Reaching the small business market is very challenging for companies like Amazon, Google and Facebook,” Sterling cautioned. “It’s not an effective marketplace. There’s no single channel you can go to.”
That said, the advent of Amazon Local Services could turn out to be yet another thing small business owners have to pay attention to, he suggested.
SMBs have to face a plethora of different channels — online, the Web, the mobile market — “where profiles have to be built out and reputations have to be guarded,” Sterling explained. “This is yet another reputation issue for SMB owners.”
It’s likely that third parties such as “agencies and intermediaries selling marketing solutions to SMBs are trying to figure out [how to work with Local Services],” he continued.
Another Step in Amazon’s SMB Campaign?
One sticking point might be concern that Amazon would have access to the sales data of businesses using the Local Register, which Amazon could then leverage to make more sales, suggested Retailwire.
By combining the Amazon Local daily specials with Amazon Local Service and the Local Register, it’s conceivable that Amazon could position itself to dominate many small business operations.