Type above and press Enter to search. Press Esc to cancel.

February 15, 2019 | 4 Mins Read

How Worried Should You Be About Amazon’s Stealthy Servitization Play?

February 15, 2019 | 4 Mins Read

How Worried Should You Be About Amazon’s Stealthy Servitization Play?


By Tom Paquin

Amazon has put its hands into a great many cookie jars over the last two and a half decades — from bookseller, to big box store, to technology company, to seller of behavior data. Amazon has long since expanded its brand cachet, its recent acquisitions showing a desire to disseminate itself from the moniker of “Seattle-based monolith” into our local neighborhoods through grocery stores and, improbably, brick-and-mortar bookstores.

To further cement that local presence, in a little-advertised corner of Amazon’s website, they’ve launched a series of home and business services.

These individual services have rolled out piecemeal over the last few years, into what has become a somewhat dense, if far from comprehensive, list of service offerings. Most of the services organically sprouted out of consumer product sales that Amazon offers—tools like office chair assembly and home theater setup—while quite a few don’t seem to be tied to a retail product at all—like house cleaning, pest control, and landscaping services.

Amazon isn’t exactly shouting from the rooftops about their services. A simple Google search for “house cleaners” yields a page and a half of results before Amazon appears in the list. And the UX itself leaves a lot to be desired, marred with the same clunkiness that accompanies most Amazon sites which, in spite of their ease of purchase, remain somewhat obtuse.

What Amazon does offer, however, is a fairly easy way to find someone to do a job. Even the yellow pages, back when they were still a thing, created a degree of choice paralysis as you pored over two dozen gutter professionals. Amazon takes the choice out of the equation, acting as more of a matchmaker. You choose a date and a time, and they let you know who you’re working with 24 hours before they show up.

What does this mean for service professionals?

Amazon the Disruptor

This is far from the first time that I’ve advocated for service in retail, but Amazon’s approach is interesting because it’s two-tiered. On one side, yes, they’re servitizing certain aspects of their business, offering services like network setup for businesses that, presumably, have purchased accompanying products.

On the other side is something more interesting, though. It’s the fact that Amazon is seemingly employing an army of contractors, which is the alarming part for field service organizations. Amazon destroyed local competition among booksellers, record stores, and big box retailers by undercutting prices and increasing the ease of delivery. This may be untested, but what happens when they start doing this with house cleaning, HVAC repair, pest control, and so on? What happens when your smart speaker can book your next hot water heater repair without you even having to clean the Cheeto dust off your fingers?

The second decade of the 21st century has seen Amazon take the mantle of digital black hole away from the Microsofts and Apples of the world, and if this trend continues, they’ll be poised to start eating up an even more diverse base of companies. How does a service firm compete with that?

Preparing to Slay Goliath

I might be inclined to choose a service through Amazon because it’s easy, so how does a seemingly traditional service organization compete with that? They do so by having the best service solution.

Whether you dispatch a technician from Amazon, or dispatch a technician from a traditional service firm, the result is functionally indistinguishable: a person is coming to complete a service. There are, however, elements that will set true service firms apart — a focus on hiring and retaining top-level talent, a strong focus on customer experience, use of advanced technologies such as smart routing and augmented reality, and so on. The level of focus that a true service organization has will likely be beyond the capabilities of Amazon because Amazon’s approach is to be a jack-of-all-trades.

Service firms of a specific discipline, then, have a huge advantage because they can invest in systems and processes to augment and optimize their talent, and in turn provide an unmatched level of excellence. With that in mind, now is the time to consider how digitally transformed your business is. Now is the time to look at the full enterprise picture of your business and think critically about how well your service operation is being managed, transformed, and grown. Now is the time to look at things like IoT and reverse logistics because you, invariably, will be able to manage such tools with more focus than Amazon ever could. Now is the time to take risks with emerging technology like Augmented Reality, because if I’m wrong and Amazon isn’t the disruptor, the next guy will be.

Time will tell how Amazon’s gambit plays out, but service firms owe it to themselves to not sit idly by and let it gobble up another industry. Now is the time to start taking a serious look at how your service firm is embracing innovation.