How Amazon Has Impacted the Construction Industry

October 18, 2019
By Michael Copp, Executive Vice President

Blake Morgan wrote in her April 2018 CMO Network article, Will Amazon Get Into The Construction Business? “Many customers who have newer homes have created a smart home hub – where Amazon’s Alexa or Google’s Go are connected to the lights, music, front door lock, thermostat, video cameras, external security system and more.”  Morgan notes that it would make sense that Amazon would want to take the next step and “make sure its smart devices are literally built into the walls of its customers’ homes.” (Retrieved from the World Wide Web on September 23, 2019 at https://www.forbes.com/sites/blakemorgan/2018/04/06/will-amazon-get-into-the-construction-business/#770d45e53f02)

Given [Amazon’s] investments in artificial intelligence such as Amazon Recognition Video and with “Construction already using sophisticated technology to its advantage in data management tools such as BIM, now it only seems a matter of time before contractors begin incorporating Amazon’s services.”  (Retrieved from the World Wide Web on September 23, 2019 at https://www.constructionnews.co.uk/archive/amazon-5-ways-it-will-change-the-construction-market-08-05-2018/)  With recent expansion efforts, “Amazon likes to vertically integrate aspects of its operation, such as delivery, so it is possible that it will create its own construction and development team.”  So, what does this all mean to the plumbing and HVAC industry?

Amazon has already changed our industry in ways that we have yet to tackle.  They are impacting supply chain management, online ordering and returns, offering one-day and same-day shipping, and doing all of this while shifting customer expectations of brick and mortar stores to match online expediency.  They are also changing customer expectations of contractor interactions.

Some contractors are recognizing ways to compete and/or work in concert with the “Amazon affect” by offering ways to address the latest lifestyle preferences:

  1. A monthly ‘subscription’ for equipment and maintenance programs to its customers.
  2. Customer financing for equipment
  3. Smart technology upgrades and remote monitoring services
  4. Improving customer engagement to create excellent customer experiences

Whether customers shop online or on-ground (or a hybrid of both), I believe they all really want the same things listed in Michele McGovern’s online article, Customers want more: 5 New Expectations You Must Meet Now, to include:  more personalization (immediate customer service support), more options (“self-service, voice, digital and social means to interact with a company”), and constant contact. “The key is to give them the right amount of information at the right time through the channel they prefer.” (Retrieved from the World Wide Web on September 23, 2019 at http://www.customerexperienceinsight.com/customer-expectations-you-must-meet-now/ )

Contractors are also utilizing technology such as Building Information Modeling, 3-D Modeling, mobile technology, inventory management, modular and green construction, and finding innovative ways to take advantage of economies of scale to reduce costs and increase value to their customers.

Sources:

https://www.forbes.com/sites/blakemorgan/2018/04/06/will-amazon-get-into-the-construction-business/#770d45e53f02

https://www.constructionnews.co.uk/archive/amazon-5-ways-it-will-change-the-construction-market-08-05-2018/

https://www.spscommerce.com/blog/ways-amazon-changed-retail-spsa/

https://www.verdict.co.uk/five-trends-changing-construction-industry/

http://www.customerexperienceinsight.com/customer-expectations-you-must-meet-now/

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