Yesterday Reuters reported Amazon would be rolling out a local services marketplace “later this year.” The article speculated that could mean “anything from babysitters to handymen to birthday clowns.”
Amazon has been distributing local daily deals, in partnership with LivingSocial, since 2011. Originally LivingSocial was doing all the local sales for Amazon. It’s not clear whether that’s still true or whether Amazon has taken on any of the sales effort in the three years since inception.
In the UK, however, Amazon has experimented with its own direct telephone sales force. Accordingly the company does have experience with selling to local businesses.
Regardless of whether and how it approaches sales, the Amazon Local deals marketplace lays the consumer foundation for a broader “Amazon Local” offering that could turn it into a much more direct competitor of Google, Facebook, Yelp, YP and others.
Ads could take a variety of forms (search, display, video). They equally appeal to brands and national-local marketers that fulfill offline.
At the LSA conference earlier this year in Southern California we speculated about whether (or when) Amazon might move into local services and compete with Google et al.
Recall that in the roughly 2004 – 2006 time frame Amazon launched and operated a yellow pages site and visual mapping product called “block view,” which was a precursor to Google Street View. Below is a screenshot of one of the old Amazon yellow pages profile pages.
Geekwire also reports that Amazon has “quietly been collecting” local reviews for the past month or so. All of this seems to suggest Amazon’s inevitable re-entry into the directory/local search market.
The company has enormous traffic and an extremely strong consumer brand. It also has payments, cloud services (hosting), mobile (and mobile hardware) and delivery services. Among other things, Amazon could host SMB websites (online + mobile), process their payments and provide an e-commerce platform for SMBs that sell goods.
The company could also deliver an array of marketing services and infrastructure support to SMBs in a “one stop shop” fashion.
Given its brand and loyal audience of millions, Amazon could relatively easily expand the scope of and use cases for Amazon Local. The real challenge would be engaging business owners and gaining SMB ad sales.
It could certainly use its brand strength and experience with telephone sales to its advantage in that area. Yet Amazon doesn’t need to generate local ad sales revenue right away. The company could operate a purely consumer facing local search/directory site (even for a few years) before it ever sought to generate ad revenue. But Amazon could, if it wanted, fairly quickly generate sales from national/brand advertisers that fulfill or distribute locally.
In terms of local sales, there’s very interesting discussion in the Reuters article:
In recent months, Amazon has reached out directly to service companies as well as to several startups in Seattle and San Francisco that already connect service providers, from home repair to massages, to customers through their own web sites and mobile applications, according to the people.
It thus looks like Amazon is contacting SMB aggregators, who do the direct sales and servicing of accounts. In that context, which I’m sure would be a temporary step, Amazon becomes a distribution or traffic source and, potentially, another alternative to Google. That might be welcome to many SMB channel partners.
It’s not a foregone conclusion that Amazon will launch this local marketplace, and, if launched, that it will succeed. But Amazon certainly has the potential to become a formidable competitor in the market.
While it’s premature to pick winners and losers, there are a number of companies that could suffer should Amazon “go for it.” What do you think?
Do you think that Amazon could/would succeed as a local consumer destination? Who might suffer or be adversely affected by such a move? And would the company have any greater success with SMB self-service and/or local ad sales?
Postscript: Amazon’s impending move into the smartphone market (next week) may be playing here as well. While Amazon has always been interested in the “Local”/SMB market, the rise of mobile and online-offline may have partly motivated the company to re-enter the segment.