Amazon is coming for the real estate industry
At the age of 30, in the year 1994, Jeff Bezos launched Amazon out of his garage. In 1995, the company sold its first product, "Fluid Concepts & Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought." Fast forward 26 years and Amazon is the first place we think to search when buying something online. You can find products from A to Z, add it to cart, quickly checkout, and with Amazon Prime, some products can be delivered on the very same day of purchase. Now, that's speed and convenience. This is something we find far from ubiquitous with real estate buying or selling today.
In its growth, Amazon has disrupted well-established industries. Brick and mortar retailers have felt the biggest impacts. E-commerce accounts for over 16% of total retail sales, where Amazon accounts for 45% of US e-commerce spending. This massive growth in e-commerce and Amazon dominance has forced retailers to reimagine their relevancy and how they attract, engage, and retain customers.
10 amazing stats about Amazon
During September 2020, Amazon.com had over 2.44 billion combined desktop and mobile visits, up from 2.01 billion visits in February 2020 (source)
9 out of 10 consumers check a product’s price on Amazon. (source)
Amazon sells more than 12 million products. (source)
Amazon sells over 1.1 million home improvement products. (source)
95 million people have Amazon Prime memberships in the US. (source)
And soon, we believe Amazon may be well positioned to play a role in how we buy and sell real estate.
Amazon has already dabbled in real estate
In 2019, Amazon launched TurnKey in partnership with Realogy, who own household brokerage name brands like Coldwell Banker, Gibson Sotheby’s and Century 21. With TurnKey, Amazon and Realogy hoped to match potential home buyers with local agents using the Amazon portal. Customers who purchased a home with that agent would receive up to $5,000 in Amazon Home Services gift cards and smart home products like Amazon's Echo Dot, Ring Doorbells, Fire TV along with installation services. Due to Covid-19 reasons, this program was discontinued in early 2020.
We believe this was just the start of Amazon’s entry into real estate and will return in some form or other.
Imagine this: Homebuying on Amazon
Amazon could predict:
You’re renting a home
Your spending power based on past purchases
You may need more living space based on your recent purchases of pacifiers and baby products
This is how it could work and look
The next time you visit Amazon.com, you’ll see homes for sale, that you can afford
You’ll browse homes and click 'schedule a tour'
The house may be owned by Amazon already and it would be vacant and easily accessible
You’ll arrive at the home and use your Amazon app to unlock the door
You love it! So, you tap ‘make an offer’ on the app
It's a big investment, so you are guided at every step with helpful tips and insights to help you make the right choices
Amazon Loans provides residential mortgages, so with a few taps you apply for a loan and get approved instantly
Everything is digital so you can e-sign and upload the required documents
You're done and ready to move into your brand new home in a matter of days with Amazon’s moving services
You’ll later get an email from Amazon recommending home products to furnish your new home
The above is a depiction of what Amazon’s homebuying experience could look like if it created one. Fast, convenient, and has a Virtuous Cycle.
Amazon's Virtuous Cycle
How Amazon could benefit home buyers and improve the customer experience
Amazon could offer home buyers speed and convenience through its technology
Buyers could get a mortgage, home warranty, and other home services all in one place
Amazon could recommend home products to furnish your home
Amazon could recommend local contractors and other home services for the upkeep and maintenance of your home
How Amazon could benefit sellers and improve the customer experience
Since Amazon is a highly trafficked website, sellers could get many buyers viewing their home
Sellers could target more qualified buyers through Amazon's recommendation algorithms
A seller could choose to sell their home directly to Amazon‘s ibuying arm for a quick, no-hassle sale
It's not about if, it's about when
We know Amazon has captured mindshare and is a dominating force online. Customers trust Amazon. According to a survey of US customers, 89% of buyers agree that they are more likely to buy products from Amazon than other e-commerce sites (source).
Real estate is the largest most un-disrupted form of buying and selling in the US. As most forms of buying and selling have moved online, we believe it is a matter of time before the traditional real estate market may as well.
To prepare for this, Nuhom is creating a buyer first homebuying experience with speed, convenience, and affordability in mind. To learn more, check out www.nuhom.co
Nuhom is a Boston based full-service real estate tech company making home buying convenient, fast, and rewarding. We have dismantled the traditional home buying process and replaced it with innovative technology, far fewer hurdles, and more savings for the modern home buyer. Learn more at www.nuhom.co