Amazon guarantees service for household projects

Discussion
Mar 31, 2015

Do you have a project you need done around the house? You could ask friends, find a supplier through your local Home Depot or Lowe’s or join a referral service like Angie’s List. You could also go on Amazon.com. Yesterday, the e-tailing giant announced the launch of Amazon Home Services, a new marketplace where consumers can find and hire local professionals with similar ease to buying products online.

The new service is currently available in 41 cities around the U.S and includes major metro areas including Los Angeles, New York, San Francisco and Seattle. Professionals listed on Home Services are by invitation only. They must pass background checks, are required to be insured and are expected to maintain high performance standards. Customers can rate suppliers just as they rate purchases on the rest of the site.

Amazon guarantees customer satisfaction with all services purchased. If for some reason the customer is not happy when work is completed, Amazon will step in to see it is done right or a refund is provided.

Scott Strawn, an e-commerce analyst at International Data Corporation, told U.S. News & World Report that Amazon’s guarantee may be all it needs to induce trial of the service.

As with products, all pricing is upfront from the service pros on Home Services. Customers can add pre-packaged services to their order and only pay when work is completed. Amazon and the professionals on the site offer a price match guarantee.

Services vary based on area, but Amazon’s Home Services offers a variety of services within major categories including automotive, computer & electronics, home improvement, lawn & garden, lessons and others. Amazon is offering a $20 gift card to customers who buy a service valued at $99 or more before April 13. According to Amazon, over 85 million of its customers shop for products that need professional services.

TakeLessons, an online marketplace for private lessons, is among those participating in the Amazon Home Services launch.

"On-demand access to services and lessons is the next phase of e-commerce," said Steven Cox, CEO of TakeLessons, in a statement. "Consumers can now purchase services as easily as buying a book on Amazon.com, while freelancers and specialized instructors gain instant access to business opportunities that enable them to make a living with their existing skillset. We call it s-commerce — service commerce."

Will Amazon’s reputation and happiness guarantee be enough to drive substantial trial of its Home Services? Do you see s-commerce (service commerce) as a major opportunity for retailers in the future?

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15 Comments on "Amazon guarantees service for household projects"

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Frank Riso
BrainTrust

Pricing up front and a guarantee from Amazon! What’s not to like? I think they will do very well. I have tried Angie’s List before and the only issue is getting someone to come out to the house to bid a job. If Amazon can also ensure that they come out and bid the job, all the better from the services I have tried. I do not think the term s-commerce will make it since the term “service” is the norm for retailers who sell consumer electronics and appliances. The only advantage Angie’s List has now is that it is everywhere and Amazon is limited to major cities and very populated areas. I would hope that will change.

Nikki Baird
BrainTrust

It’s an interesting move, one that in some ways is similar to Mechanical Turk and in other ways a new business model. Certainly more like Amazon’s Marketplace than their foray into, say, fashion. I think it’s fascinating that Amazon is more forcefully involved in this one, given their reputation for being easy to buy from but hard to get service from. Even with their guarantees, I think I would hesitate before trying. If something goes wrong, Amazon standing behind the customer is going to be key to encouraging further adoption by consumers.

Max Goldberg
BrainTrust

Amazon is a trusted brand. Expanding into home services will bring that trust along with it, and it opens a new revenue stream for Amazon. Few retailers are in the position to offer a wide range of services to customers, although many can and do offer a limited range, like Best Buy and the Geek Squad or Sears with home appliance installation and repair. The key question is whether the retail brand inspires enough trust that consumers will let their representatives into their homes, knowing that the work will be done right, and if there is a problem, that the weight of the retailer will be on the consumer’s side.

Ken Lonyai
BrainTrust

This time I will really go out on a limb and risk making a prediction: This service is not going to make it in the long run. Maybe lessons will last, but anyone who’s dealt with home contractors knows the difficulty in getting a job completed properly, on time, at a fair price and without lingering issues. My guess is that once the shine wears off on this and too much effort is expended by Amazon to keep customers satisfied, that this will eventually go the way of Amazon Wallet.

Tony Orlando
BrainTrust

It will help Amazon for many who are new to the areas in which they live and are not familiar with the top-end service people who serve there. My plumber and electrician are always busy, which is a good sign, and the occasional handyman I use is booked up sometimes for a month.

Amazon needs to make sure they have really good service people who do the job right, and to me it is a good way to build your reputation, as the top service folks do not need to pay the fee to Amazon to find work.

Once the new service agents start building up their reputation they will drop the contract with Amazon, as word of mouth will carry the day. The hunt for new blood is critical for Amazon, as the turnover in service people is inevitable.

Carrie Vogler
Guest
Carrie Vogler
2 years 4 months ago

Amazon’s reputation and high satisfaction rate will certainly drive interest in their s-commerce division. As a market leader in e-tailing, customers will trust the brand. However, its promise of a “happiness guarantee” is a bold claim to make. With every other aspect of the company, customers receive a product. The margin of dissatisfaction is relatively slim. When dealing with a service, the chances of the experience not living up to customer expectations is markedly greater. Customers may not like the execution, the service providers, the scheduling, the list goes on. It’s a very brave move for Amazon to put its brand character on the line. This is certainly a great opportunity but retailers will have to be extremely diligent in sharing their brand equity with service providers.

Mel Kleiman
BrainTrust

A highly segmented market now has a player who is going to change the rules. If Amazon can live up to the hype, which I have to assume they will, this will be a game changer for the handyman and home repair business.

The question every business needs to ask now is what happens if a major player takes a look at your business and decides to come play in your backyard.

Every retailer used to worry about what would happen if a Walmart came to town. Now the question is what happens if Amazon decides to get into your business.

Example: If Amazon were to do the same thing it is looking to do with home repair to home healthcare providers.

Gene Detroyer
BrainTrust

The plumber, the carpenter, the handy-man, the electrician—dealing with these guys is like buying a pig in a poke. You never know what you are going to get (or when the job will be complete). Just give me some confidence. Pre-screening and a guarantee go a long way in doing that.

And with its customer base Amazon has a huge competitive advantage versus any start-up in this area.

I am not sure of the size of the service market (B2C and B2B), but it would not surprise me if it is as big as the products market. From a profitably point of view, the ROI for Amazon would go through the roof. No inventory, just margin.

This is brilliant, apparently as is Jeff Bezos. He understands business sustainability better than all but a few corporate leaders ever have.

Tom Redd
Guest

Amazon’s reputation with products and attempts at fashion and overall price is not even the proper way to rate their potential for success in s-commerce. Amazon is just hunting for any spot where they can make money. They will flare up in this, the relatively un-home project educated reporters will create stories around it and the homeowners that turn to this service will suffer.

Angie’s List and local word of mouth are proven routes for home project services. They weed out the con-men that are in the home project space: The ones that say they can do a project and cannot, but they have your deposit money.

In addition, many projects homeowners want to do can be done with the help of professionals at Home Depot who will spend time at the store making sure that you have the right parts and the right confidence to get the project done on your own.

My last effort is to turn to contractors. Most jobs I do myself, except windows and carpet cleaning. Need help on a project and live in Arizona—I am your man!

Ed Rosenbaum
BrainTrust

What a field to get into. Amazon had best make sure they have done their due diligence before they open this door. I have been in the repair and maintenance field for many years. One of the first decisions we made was to avoid the home maintenance silo. Why? Because the hardest customer to please is the customer who has work done in their home. It is too difficult to satisfy them, even over a small problem. The customer will find too many reasons to avoid paying. They will accept a final price, have the work done, then decide to negotiate.

It takes a specialized company performing work in limited fields to succeed. Amazon has the money to last. But having the right people in place and a call center to back them up is a major undertaking. This is a field best left to the professionals.

Shep Hyken
BrainTrust

I’m not sure if Home Services is congruent with the Amazon model, but they know better than I. Bottom line is this: I trust Amazon, therefore I will trust who they have on their recommended list—and I think their customers will too. Knowing this right up front with a guarantee…I’ll give them a try.

Lee Peterson
BrainTrust

Is this another one of those “drone” PR stunts Amazon is so good at? I find it hard to believe that this type of service is anywhere near a bulls eye for the mighty online giant.

Frank Poole
Guest
2 years 4 months ago

Well, I’ll know who to call when one of Jeff’s drones slams into my house.

Seriously, Amazon needs to focus. The net they’re casting for new customers is growing ever wider, and is ever more vanishingly thin. When something goes wrong on a home improvement project—and it will—customers want the number of the phone bouncing around in the contractors truck, NOT indirection via Amazon.

As for “s-commerce” (really, Mr. Cox?), companies with a physical presence (Lowe’s and Home Depot come to mind) already partner with local subcontractors and suppliers, and are backed by both a strong brand and a guarantee. Amazon’s late to this game, and is on the wrong field.

Robert DiPietro
BrainTrust

Absolutely! Amazons’ reputation will drive trial of the service. Service is a huge opportunity for retailers and some retailers have been doing it for a while—Geek Squad, Staples EasyTech and Sears.

The difficult part is managing of the network of service providers and how to continue a high level of service that customers expect. If done right, this will be huge for Amazon and the customer.

Sid Raisch
Guest
Sid Raisch
2 years 4 months ago

This isn’t a half-baked un-trialed scheme. The EVERYthing to EVERYbody store is simply doing what it is designed to do. Selling services online is really not revolutionary. It’s a natural progression for US to buy them, as well as for them to sell them. This is PRIME time.

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