Tag Archives: amazon

On Demand is New Focus for Some Home Service Providers

Competition in the home services leads space has been heating up – and so are the tensions. Just this week, Angie’s List has filed suit against Amazon, contending that Amazon Home Services has been egregiously signing up for the member’s- only service around the U.S., and grabbing proprietary service recommendations.

On Demand home services is something that several of the companies are hoping to differentiate themselves with. We saw it with HomeJoy at our LODE event a couple of weeks ago in San Francisco. Home Advisor has also been rolling out its Instant Booking on demand service.

Mizamin, an Israeli Startup with international ambitions, also hopes to get ahead with on demand home services. Its mobile app has gotten 200,000 downloads in Israel, mostly generated from a small social media ad campaign and word of mouth. CEO Yuval Aronov told us that providing home services on an on demand basis has some quirks to it. Many home pros resist keeping to real schedules and are eager to take jobs as they come up. On the other hand, certain types of jobs, such as pest control, need to be scheduled in advance.

Mizamin has built an App that enables multiple providers to receive queries in real time. When a plumbing assignment goes out to Mizamin’s roster of 40 plumbers in Tel Aviv, three-to-six usually answer, he says. The biggest channel for most plumbers have been SMS. “Some don’t use their smartphones professionally,” he says. “They are afraid to drop them in the toilet.”

A Look at Amazon’s Entry Into Home Services

Amazon Home Services has been in beta since November and has now formally launched. The service will take on Angie’s List, Home Advisor and a slew of new players in the increasingly crowded home services space (i.e. Pro,com, Serviz, Home Depot’s Red Beacon, Thumbtack and apparently, Google.)

VP Pete Faricy told The New York Times that it now covers more than 700 types of services and has already entertained 2.4 million “serve offers.” A look at Amazon’s map identifies four highly developed core markets (Seattle, San Francisco, New York and Los Angeles) and 36 moderately developed markets (and many more lightly-developed markets.)

All of Amazon’s “hand picked” pros that hope to work with Amazon must undergo background checks, which will cost $50 (plus $40 per employee); have appropriate licenses, and carry insurance. All listings will also feature Yelp reviews as well. Pros will pay Amazon 20 percent for services that cost $1000 or less, and 15 percent above that amount, as well as monthly subscription fees — although those fees are waived through June 2015. The 20 percent fees are comprised of 15 percent service platform fees, and 5 percent transaction fees. The fees and requirements are fairly standard in the industry.

What Amazon brings to the table is its brand and especially, a high volume of consumers. It is currently targeting its customers with an offer of a $20 gift card for first time users. It also has millions of merchant and consumer credit cards in its profiles, which can be a major advantage. Longer term, it has the potential to leverage its Local Offers business, which has been including service offers for some time. Amazon doesn’t, however, have an instant collection of merchants that are pre-inclined to work with it for marketing purposes.

It also doesn’t have the behavioral intelligence that informs its retail services,or its own reviews – although Yelp’s reviews will help it out here. There are always thoughts that Amazon would want to try to buy a service such as Angie’s List or Home Advisor to complement its efforts in these areas.

On the surface, it seems like a stretch for Amazon to enter home services. It could, of course, be an initial failure, like Amazon’s Fire Phone. (or a long term success, like Kindle and Amazon Web Services). But if you are thinking big…services are a key part of the local economy that Amazon is tackling for sales, leads, payments, hosting and other areas.

We note that many of the competitors in the space leverage the new models of Uber-like, Local On Demand Economy that BIA/Kelsey is focusing on at our June 12 NOW event. There is certainly plenty of potential. As Home Depot Silicon Valley head Anthony Roddio noted at our ILM 2014 event in December, “The market is ripe but no one is there yet.” Some estimates have penetration in this segment at under 10 percent.

‘Selling Services on Amazon’ Launches Beta in Nine Markets

After months of rumors, Amazon has entered the increasingly crowded service pro referral space with a beta test in nine markets. According to a dedicated web site for the launch, service pros will pay Amazon 20 percent for services that cost $1000 or less, and 15 percent above that amount, as well as monthly subscription fees – although those fees are waived through June 2015. The 20 percent fees are comprised of 15 percent service platform fees, and 5 percent transaction fees.

The service is launching with a strong focus on consumer electronic installation and repair, fitting with sales on the Amazon site. Auto and bike services are also featured, with more categories likely to be added. All pros must undergo background checks, which will cost $50 (plus $40 per employee); have appropriate licenses, and carry insurance. All listings will also feature Yelp reviews as well.

Amazon will be competing against a number of other players in the space, including market leaders such as Angie’s List and Home Advisor; Pro.com, a new site launched by former Amazon exec Matt Williams; Serviz, a new site launched by former ReachLocal exec Zorik Gordon; and The Home Depot’s Red Beacon service.

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New at ILM SFO 2014: Brad Stone, Author, ‘The Everything Store: Jeff Bezos and the Age of Amazon’

Local’s 800 lb. gorilla is always Amazon. It has already had a huge impact on retail via showrooming. Now it has invaded Groceries, and is heading towards Services. Plus it wants to provide a full range of promotional and fulfillment services for SMBs via Amazon Offers, Amazon Web Services and other services.

At Leading in Local: Interactive Local Media, which is Dec. 3-5 at the SFO Hyatt, we’ll talk up and down Amazon and its impact on local with Brad Stone, the author of “The Everything Store: Jeff Bezos and the Age of Amazon.” (We’ll probably get some copies as door prizes for audience members). Stone, who won the Business Book of the Year award for The Everything Store, also serves as Bloomberg Businessweek’s senior writer in San Francisco.

The show itself continues to build and build — it is likely to be one of the biggest yet.

Some of the highlights of the two-and-a-half-day show — out of many — include a keynote from Pinterest VP Joel Meek; two sessions dedicated to Google and its transformation of local; a VC session with Mucker Labs’ Will Hsu and Comcast Venture’s Michael Yang; a keynote from YP CMO Allison Checchi; a keynote from Yodle CEO Court Cunningham as Yodle preps its IPO; and a dual keynote from Deseret Media’s Clark Gilbert and Chris Lee, taking the lessons of disruptive media to heart in their remaking of the media company. Gilbert and Lee recently did a briefing for the BIA/Kelsey analysts – it was, by far, the most enlightening briefing for us this year.

We’ll also be presenting a great deal of cutting-edge BIA/Kelsey research, including findings from our exclusive survey of top loyalty executives, where we have worked to see what is working, what is not and where the momentum lies. Great insights are coming in. The Cardlinx Association has partnered with us on the survey, and Cardlinx head Silvio Tavres will be co-presenting.


Author Brad Stone, Recipient of Business Book of The Year

Is Amazon Testing a Local Marketplace?

Amazon has been reported to be prepping a local services marketplace test in one market. If the article is accurate, this effort won’t necessarily be adopted into a nationwide product – Amazon frequently tests product concepts — but should be watched with interest.

Amazon Marketplace – or whatever its final branding – would complement existing Amazon services in local, including Amazon Local, a Groupon-like deals entity now in dozens of markets; and Amazon Fresh, which is providing grocery delivery service in Seattle, San Francisco and southern California. (Amazon also touches the local marketplace via Amazon Web Services and Amazon Payments, both of which provide digital infrastructure support for local merchants.)

If launched, Amazon Marketplace would fit into the company’s mission of making it easier for consumers to make informed decisions on purchases and to buy goods and services. It would also help source deals at the local level for Amazon Local. Amazon may be frustrated at the difficulty of sourcing deals through third parties, and the expense of a local sales force, which is mostly used to sell to local retailers. As described, Marketplace would be an automated product.

It could also fit into Amazon’s growing advertising business, which has made a big play via Kindle Offers and much more importantly, Product Listing Ad tiles at the top of search pages – monetizing photo search for the first time. Amazon made $600 million from advertising in 2013, but hasn’t yet gone into local advertising, which represents a new frontier.

According to the Reuters article, the initial effort for Amazon Marketplaces would focus on hiring local services, rather than goods. Yelp and Angie’s List are the biggest players in the space, but may have less than 10 percent of the overall market.

Amazon may seek to implement the infrastructure for Marketplaces from Pro.com, a new, 30 person service that includes 15 ex-Amazon employees. Pro.com has raised $3.5 million, including funds from Amazon CEO Jeff Bezos. The service matches contractors with consumers and providing job estimates. But Bezos has never sold his personal investments to Amazon (unlike Oracle’s Larry Ellison and AOL’s Tim Armstrong). It seems especially unlikely because Bezos is only a minority investor in the company.

In any case, Amazon’s launch of a services marketplace would be somewhat ironic. In April, the Bezos-owned Washington Post discontinued a service which is almost exactly like what has been described for Amazon Marketplace – Service Alley. (The greatest irony of this is that Service Alley was built – pre-Bezos — on top of TeachStreet, a start up that Amazon purchased in an acqui-hire, and then discontinued).

Next Steps For Groupon As Andrew Mason Departs

It was just a matter of “when,” but Groupon has finally relieved Andrew Mason of his CEO duties after a quarter in which Groupon widely missed its mark because of its very high expenses and serious international issues, despite growing 30 percent year over year. Vice Chair Ted Leonsis and Executive Chair Eric Lefkofsky will run the company until they find a new CEO for Groupon or perhaps, even sell it.

Groupon, of course, has been written off in some circles as a big fad that ultimately dis-served its SMB merchants– something we have never totally accepted. But the ongoing possibilities for Groupon are wide ranging.

The company isn’t currently sustainable, with its heavy sales-laden staffing (whoever said local is scaleable?) But just as #2 Living Social’s investors saw that it was more prudent to inject $110 million to keep it going for its next stage, Groupon, which is at least three times larger, is better off staying juiced for now.

It has massive merchant and consumer email lists, and a wide selection of B2B, scheduling, processing, mobile and loyalty technologies – plus a growing travel business, as well as a lower margin, Groupon Goods business. If its investors wanted to stay the course, it could certainly continue its march into Amazon-like ecommerce territory.

The elevation of Leonsis and Lefkofsky to acting co-chiefs has a lot of possibilities in itself. How about a couple of interesting, not-so-crazy scenarios? One is that Lekofsky could finally merge Groupon with his newer investment in Belly, the Groupon-like, Chicago-based loyalty play that has just celebrated its one millionth member.

More enticingly, in terms of scale, Leonsis could influence an acquisition of Groupon by American Express, which he serves as a board member. Amex has just opened up an ecommerce store as part of Amex Sync and needs to feed it.

Or Groupon could be sold to Amazon, which is investing heavily in the local deals space; or it could even be sold to Google, which had once offered $5 Billion for it. Perhaps Marissa Mayer at Yahoo will make a run for it. She was a major instigator of the Groupon negotiations as a Google exec.

As for Mason, he may not have been the ideal CEO of the relatively soul-less, deals department store that is currently Groupon. But he’s funny, and authentic, and has been a great spokesman for the “What do we do this weekend that is wild and offbeat” lifestyle that catapulted Groupon –and the deals space — into local’s biggest phenomenon ever.

Sometimes, Mason, reminds us, business isn’t merely about business. It’s about helping people live their lives. This is especially true at the local level in which Groupon has been a shining star.

Andrew Mason after his groundbreaking BIA/Kelsey Marketplaces keynote in March 2008

The Return of Same Day Delivery via EBay Now

When eBay purchased Jack Abraham’s Milo.com in December 2010, it caused some head scratching. While retail Inventory is helpful to track goods availability and has some value in developing location-based promotions, it seemed an unlikely anchor for eBay’s SMB and local ecommerce services.

Abraham’s upgrade of his title to head of EBay Local last year, however, indicated that changes were afoot. And this week, eBay has finally unveiled the fruit of his labors: eBay Now, a same day delivery service that builds on inventory to take it to the next logical step.

The service, following in the footsteps of first generation local services such as Kozmo.com and UrbanFetch, has launched in San Francisco with BestBuy, Bloomingdales, Nordstrom, Target, ToysRUs and Walgreen. It is mostly aimed at luring major merchant accounts to eBay’s broad range of merchant services.

Deliveries are $5 and available for orders over $25 from 9-9 during the week, and from 9-6 on Sunday. Three free deliveries per customer are available during the test. Other Milo customers that might jumpo in include Home Depot, Ikea, Lowe’s, Sears and J.C. Penney.

Strategically, eBayNow positions eBay against other ecommerce heavyweights seeking to provide a suite of etail services, from promotions to search to transactions to hosting…specifically Amazon (although Amazon indicated this week that it will not be providing a similar service.) Long-term, Google and others that are developing transaction marketing services could also compete. Uber, the Web-based limo reservations service, is also experimenting with delivery, although it isn’t clear whether the limited delivery services that have been introduced are merely meant to promote the limo service while cars sit empty.