The Wall Street Journal recently stated that Amazon is larger than the next dozen internet retailers combined. A staggering picture of dominance by the original online retailer. Further analysis by Forbes contributor Tim Worstall shows some interesting insight behind the numbers.
I had already been thinking about Amazon since the headline grabbing announcement that Jeff Bezos was acquiring the Washington Post. The man responsible for transforming retail and building Amazon into the $130bn company it is today deciding (with his own money) to invest in what is often thought of as old-world media. A newspaper!
Now there will be for many months to come, conjecture as to the motives and aspiration Bezos has for this move, however it is not the Washington Post or print media that has been exercising my mind over the past week. It has been the announcement on that same day as the Washington Post announcement that Amazon had started to include Fine Art in their ever growing repertoire of retail offerings.
Certainly Amazon has come a long way from the days of selling books and CD’s, their repertoire now covers almost anything for the home from electronics to streaming movies and ebooks to furniture and clothing. The other notable change over the decade and a half of its life was the move from being an inventory supported retailer to being a facilitators of transactions.
So what has all this to do with property portals? – by now I am sure you will be following my thinking. Fine Art is a demonstration of Amazon’s ambition to be a facilitator of purchases regardless of the value or the tangibility.
I contend that Amazon could represent a serious challenger to the existing property portals.
Property like Fine Art is purchased on an infrequent basis based on emotional appeal, it is a high value and certainly not a consumable.
But it is not this alone, that I think portends to a challenging competitor in the future; for whilst Amazon undoubtedly has a huge audience engagement and a massive technology capability, what Amazon has that no other property portal has or could ever have is a vast treasure trove of consumer insight.
Amazon knows so much about it consumers. From what type of entertainment they like to their lifestage, income, location, and family structure. They know from the books you buy what is important in your life and from the cleaning products they can assess the attention to detail you place in your home. They have a history and employ the best technology to foretell the future - your future!
Such data could be, if applied in the right way, take the legendary capability of Amazon to say “People who bought this item also bought … ” and apply it in a whole new way to search and discover property that better suits you and your family than by using the basic 3 of real estate search – price, size and location.
People are individuals and know what they like in a property even if they cannot articulate it. The algorithms that power Amazon recommendation engine could easily evaluate the interest you have in a style or type of property match it and align it to the behaviour of other users of their many services and conjure up for you in the form of a serendipity engine a selection of property that really does provide you with inspiration and surprise.
For Amazon the core to their business is data. In the US the core starting point for property data is the 900+ MLS's that are the dinosaurs of the industry – for Amazon equally as major a hurdle to overcome as Trulia and Zillow have found. However Amazon is not purely a US company and therefore it is not inconceivable to see Amazon launch a real estate serendipity engine in the UK for example where comprehensive data already exists of users as well as listings.
It could be possible. There is no certainty; but it makes you think and challenges conventional wisdom as to who the future competitors may be in the property portal space.
This area of strategy for property portals will be one of the sessions at the forthcoming PPW conference to be held in Barcelona in later November. Come and join us and join the debate as to who are the future competitive threats to the future of property portals.