Amazon and Google tap into Home Service Market

The Home Service industry has estimated to be generating somewhere between $400 to $800 billion annually. Because of the lucrative nature of such vocational work including, but certainty not limited to – plumbers, electricians, arborists, ETC – many smaller start-ups have found an outlet to nuzzle their way into the market by creating and offering an online, third party platform – connecting customers to services. There hasn’t been much competition in this market, apart from Angie’s list – the 20 year subscription service that vets local services for customer review and purchase. However, recently Google, having acquired most of the online advertising market since the internet’s inception, and Amazon, owning more of the transactionary market than any other online provider, have both seen opportunities in capitalizing on this type of service and are now cashing in on their resources, perhaps plowing over all the smaller third-parties that came before them in the meantime.

The initial idea for creating a vetted Home Service platform was to bring high tech to low tech – bringing the efficiencies and transparency of the internet to the, at times, convoluted world of Home Services. Keeping services local, not contracting outside the remote area of where the customer lived to keep the money in the community. As most of us know, however, this is nearly impossible to do if there is a third-party involved, being that most third-parties, especially those that exist on the internet, are only able to profit by extending their network outside of localized areas. Nonetheless, they do keep your services local, taking a small cut from the final transaction for the connection they made. But what is happening now is, the little guys are getting their “science project ideas” stolen from them for the big guys to get to benefit and receive the fame. As Google and Amazon steal adopt the Home Service market for themselves, the smaller companies either have to converge into the larger companies, or move out, because lets face it, these two would hands-down win in a consumer loyalty competition. Thumbtack what? Pro.com maybe? Angie’s list? Okay I have heard of it a bit. But Amazon and Google? They are a mainstay, where consumers feel safe, secure and at home..

Initially, Google financed other Home Service platforms, financially backing them while profiting from their advertisements. However, as Google attempts to now utilized their advertisement ubiquity in the more consumer-based transactionary world, it is drawing out of their investments in the smaller companies while in incubation mode on their own google-fied version of a service offering platform. Whether or not google is intending to expand their dystopia utopia by buying into the marketplace of “vetting service providers”, or simply attempting to get their “hands-in-more-pots” by providing another option for loyal Google users, it is hard to say. But it is clear that the temperatures are rising as the competition begins to heat up. With increased competition comes more of an innovative push for creative endeavors and alternative options. For example, Angie’s List recently released an app that not only connects customers with services but now allows the potential customer to take pictures of their defective appliance in the effort to find the most appropriate specialist.

Amazon’s initiative to jump on the “Home Services’ bandwagon has been a bit more expected, being the company already offers an online store that helps customers find, buy and begin using software; providing an additional service to connect their customers to specialists in their area seemed like a pretty natural transition for a company that is attempting to take over the virtual world. Amazon is attempting to tap into the market a bit differently than it’s competition. While Google is pulling out of it’s investment with Thumbtack, Amazon is continuing to keep it’s investments with various smaller businesses. It seems to be wanting to have its hands in as companies as it can, not in an altruistic way but more in an attempt to stay in as much control of the market as possible.

Either way, this is an emerging lucrative outlet and the bigger players don’t just want “in”, their grandeur nature wants it all – even the garnish!

While Amazon customers have been waiting for the online store to fill-in the gap of the Home Service needs, and therefore expected to happen pretty rapidly as the company already has an online offering, Google on the other hand, will be slower with their transition. As it starts to transition away from being simply a conduit for other companies and into a newer realm of engaging directly with customers through transactions, Google will begin to have a facelift. It has already made strides to compete with Amazon via “Google express” marketplace, however, it still needs to work on advertising itself as a online store, as it begins to tiptoe it’s way to the retail side of things.

Amazon has the consumer-based market, while Google reins over advertising. If the two could merge and join forces, they would make an insurmountable team, giving all the startups a run for their money. However, contention is where growth and innovation prevail for these two companies and therefore, they will inevitable work independently.

As we start to see these third-party Home Service platforms pop-up, 90% of which will eventually be split between Amazon and Google, many of the companies that provide the specialists may have to cut their prices in the effort to stay competitive amongst the other specialists in their field that the third parties also advertise. Therefore, perhaps more money will be funneled into the mega-corporations and less given directly to the actual workers who provides the services, keeping the middle class caged in the middle class – and the hierarchy prevails. Let us just stop and consider for a moment what it actually entails to get a plumber, an electrician, or a construction worker yourself? An internet scan, a conversation with a neighbor, or perhaps the yellow pages (do they still make phone books anymore)? Either way it doesn’t require much. If we continue to expect there to be a service for everything – in this case, a service for a service – I believe there will be detrimental outcomes. Historically, laziness has gotten entire populations in immense amounts of trouble. And history repeats itself.