Will there soon be something of the sort of Amazon Painting Services? Will painters soon have to deal with one big giant monololistic competitor, the Amazon Painting Company? We have recently come across an article by the German Professor Henning Vöpel on the chances and risks of digitalization for different trades (you can read the article here if you like, it’s in German, but you can always use Google Translate if you don’t speak the language). The professor’s point? Vöpel argues that online platforms like MyHammer (a website in Germany where you can book handyman services) and Amazon will increasingly become the main mediator between the provider of a service and end customers, the painting trade included.
Data will become more important than experience, for painters too?
Amazon knows his customers and knows what they want. If a customer buys moving boxes or a new sofa to be delivered to a new address, Amazon could infer than the customer is moving somewhere and offer painting services directly. The likelihood is great that the customer will need these services and Amazon just casually drops an offer. This is a very simple example and the possibilities of data analysis and customer analysis are of course much more far-reaching.
However, this example shows that Amazon is closer to the customer and understands the customer better based on the data than the average painter could possibly ever do. The contact rate with the customer is also significantly higher than between the customer and his local painter. In promotional emails or whenever the customer visits the Amazon website for ordering or using the Prime service, Amazon may promote its other services.
Will Amazon enter the painting trade?
Amazon currently offers handyman services in the US and the fee for orders up to $ 1,000 is $ 20. Orders over $ 1000 will have a 15% fee. Is there any good reason why Amazon would want to miss to offer an analogue service in painting? In addition to the profit motivation for Amazon, there are some other arguments that would make this development welcome by the customers and the painters as well:
- massive amounts of data allow Amazon to satisfy every customers’s need, sometimes even before the customer realizes he needs something
- extensive reach
- convenience for the customer
- security and trust for the customer
- price – Amazon will determine the price
- easier customer acquisition for the painter
Data & Reach: Amazon has an immensely wide reach and knows its customers, so it can easily place ads for the required services matching the customers’s needs
Convenience for the customer: The customer receives a standardized product / service, which he can select quickly and easily. That saves time. Many Amazon customers give up on price comparisons on orders and rely on the offer and security of the platform.
Security & trust for the customer: Amazon is very accommodating to the customer. Complaints and returns are accepted without further inquiry. This is very convenient for the customer and offers a lot of security and confidence. But how Amazon will handle customer complaints and problems in the painting business? Will Amazon employed experts inspect and regulate locally? Amazon will be sure to make contractual arrangements with its craftsmen or painters that affect quality standards and complaints. This area is critical to the success of future possible Amazon Painting Services. If this aspect is dealt with in a proper manner, this will provide the customer with unparalleled security when hiring a painter and a strong competitive edge for Amazon.
Price: Due to its size, Amazon could determine prices and influence the entire painting market. For the customer, it will be easy to obtain a comparison offer on Amazon in just a few clicks. In order to be competitive and guarantee a smooth market entry, Amazon will be interested in the lowest possible price. It can therefore be assumed that when Amazon will enter the painting business, this will create additional price pressure. At the same time Amazon could provide its painters with a centralized purchasing function for paints, equipment and materials in large quantities. The centralized purchasing function by Amazon would bring significant savings, which would probably benefit the end customer and Amazon. Again, This would probably result in a strong competitive advantage for Amazon compared to the local painter’s business.
Customer acquisition for the painter’s business: Many of the above aspects are rather negative from the perspective of the local painter’s business. But there are also opportunities, Amazon would be able to advertise easily within its reach among its data base customers and thus take over the procurement role. In addition, Amazon would try to standardize orders and assignments. Thus, the cost of customer communication, the oversize and the offer would be omitted or greatly reduced. On the one hand a reduction in work, on the other hand a reduction of the painter’s business to the execution of the purely manual activity without any consultation.
What problems would Amazon be facing?
There are two major problems that Amazon would have to overcome to successfully implement this kind of trades: standardization and quality.
Limits of standardization
Amazon has to standardize the services so that they can be ordered with just a couple of clicks. In contrast to other industries, however, the tasks and work steps in the painting trade are quite individualized. Depending on the surface, primer or cut of the apartment, the expenditure of time and materials can be higher or lower. So far in the US Amazon is only offering small standardized services. For example, installing a ceiling fan or replacing a toilet bowl. Complete offers such as the renovation of rooms or entire houses are not yet offered by the platform. It is probably likely that Amazon is slowly working its way up and testing smaller standardized services in the market. In this way, experience can be gained and the system can be gradually expanded and transferred to other markets in Europe and worldwide.
Quality and complaints
If Amazon manages to give customers a high sense of security about the service, then Amazon could enjoy a strong competitive advantage. If a customer is dissatisfied with the services of his freely commissioned painter, the customer can express his dissatisfaction directly to the company which was in charge of the job, can try with the help of a lawyer to enforce his complaint or contact a Chamber of Trade. Many end customers feel insecure due to a lack of expertise in this area and fear the intererruption or delays in their services or increases in their costs. If Amazon succeeds in enforcing a certain quality standard and guaranteeing that customer complaints will be handled reasonably, many customers will choose Amazon.
What is Amazon offering at the moment?
In the US, Amazon already offers a variety of handyman services in the Home & Business Services category. This is still about simpler and smaller jobs that are easily standardized and can be ordered at a fixed price. Here are some examples:
- installation of a fire alarm
- cleaning and inspection of a fireplace
- replacement of electric heaters
- laying laminate
- replacing the bathtub
At the time of the research Amazon’s US platform did not include any painter services.
What can you do as a painter to protect yourself against Amazon?
Prof. Vöpel believes digitization will affect the painting trade later than other areas and makes four suggestions about measures the traditional craft trades can take to protect themselves against the effects of digitization.
- increase customer centricity
- form local platforms
- develop logistics solutions and cross-functional services
- proximity to other industries, work with other people in similar trade