Amazon’s next move: From books to builders
America’s biggest online retailer attempts to take another slice of the “on-demand” economy.
HAS Amazon ever seen a market it did not want to enter? The internet behemoth started by selling books, before becoming a retailer for everything from art supplies to zombie-survival kits. It went on to branch out into e-readers, cloud computing and tablet computers, and now even makes its own nappies. On March 30th it announced its latest move: an expansion into the booming “on-demand” economy, in the form of Amazon Home Services, a marketplace that connects customers with nearby builders, plumbers, mechanics, music teachers and even goat grazers in several American cities.
Amazon has been testing a version of the service, under the name Amazon Local Services, in a handful of cities since late 2014. But it has now expanded coverage to 41 states, with the aim of offering good coverage in America’s 30 largest metropolitan areas. Just as Amazon tries to take the hassle out of buying goods, it now hopes to do the same for services, by closely vetting providers and standardising offerings so that prices can be agreed in advance. Amazon will take a cut of the resulting fee, and may also benefit indirectly: people may be more likely to buy a household appliance or electrical fitting, for example, if they can easily arrange to have it installed too.
With this latest launch, Amazon expands into territory currently dominated by listings websites such as Craigslist, Angie’s List and Yelp. Its success is by no means assured. Not all of its moves into new areas go well: its smartphone, the Fire, was a flop. But its willingness to enter unexpected new markets is one of its greatest strengths: it refuses to be constrained by internal or external perceptions of what industry it is in. Some critics worry that it has over-diversified. But Amazon, whose technology chief, Werner Vogels, was recently mocked when he described the firm (without irony) as “a 20-year-old startup”, is still in land-grab mode—as today’s move demonstrates.