Amazon Hints at Possible Real Estate Services Expansion
Will your next real estate agent come with free two-day shipping? Amazon surprised the world by acquiring grocer Whole Foods. Could the online retail giant spread into real estate be next? Maybe, according to what happened on July 11, Amazon's Prime day. A “hire a realtor” button appeared on the online retail giant's web site, creating a huge buzz in the real estate industry.
Amazon offers a Home and Business Services section where consumers search for local professional services. Find a handyman to assemble furniture, house cleaners to polish the windows, or landscapers to freshen up the garden beds. Amazon screens and vets the listed professionals, who must be licensed to be part of Amazon's service. Just like its retail section, the Home and Business Services include competitive pricing and real reviews.
The “hire a realtor” option popped up on this section during Prime day. According to visitors who noticed the addition, the button directed to a "coming soon" landing page. The button and landing page are gone now, nor has Amazon published any further comment about its appearance.
What Amazon's entry into real estate could mean
Amazon is a dominating retail force in today's world. Recent acquisitions and expansions make clear the company is trying to diversify the products and services it offers. Adding real estate to its services section makes sense from a business standpoint. With the backing of the Amazon name and web traffic, it's possible the service could compete with other industry-leading real estate hiring services like Redfin, Realtor.com, and the Zillow Group.
The potential threat briefly caused Zillow shares to slump. Zillow group CEO Spencer Rastoff isn’t worried about Amazon encroaching into the real estate space. Zillow and Trulia had a combined 137 million unique visitors to their websites and have well-established brand recognition.
Should Amazon be planning to add real estate services to its portfolio of offerings, it's more likely to have an impact on residential real estate than commercial real estate. Just as Zillow, Redfin, and Realtor.com focus on residential property searches and services most likely Amazon would follow suit. Given the slow adoption trend in the CRE industry, professionals are more likely to stick to their current marketing and listing practices.