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The future of the home services industry, part 3

Ahead: a massive change in how services will be delivered to consumers

In parts 1 and 2 of The Future of the Home Services Industry, I explained how two giants of technology—Google and Amazon—have moved from their original marketplaces of data and physical products to home services. I limited that discussion to how they are marketing on PCs and smart phones. However, there is another front in this battle that I think is just as important if not more so: devices that control the home.

Christmas 2016 was the major launch of this battlefront, with the Amazon Alexa and Google Home devices slugging it out. In 2017 Apple is entering the market with the Apple Homepod. There is also a yet-to-be-named Facebook device. All four of these companies want to control the smart home of the future. Right now, these devices are in version 1.0. Their importance is not quite well known, but they are the centerpieces in the tech giant battle to control the home.

Good Listeners

For people who have not used these devices yet, both Amazon Alexa and Google Home have great voice recognition technology that allows the home owner to play music, search the internet, order things online, change the TV channel, and more. You can also search for home services on these devices. Right now, if I ask either of these devices to find me a plumber they will recommend three companies in the area and give me their numbers. In my family, my kids use the Google Home device. It integrates with my Calendar and each day I get a quick briefing from Google including what is on my schedule and news events I have programmed it to review. We have come to depend on Google Home so much that my family now has three of the devices in our home. One is in the kitchen, one is in the master bathroom, and one in my oldest child's bedroom.

A Piece of the Home Pie

But this is just the start of what these devices can do. The most highly publicized use of these devices is to control the lights and thermostats in the home. However there are even bigger changes coming. Both Google and Amazon integrate with companies that provide home security and smart locks. Now your home security system and your locks can be tied right into your Google device. This is the true secret to the home services battle. Just as the iPhone and the Android devices have given Apple and Google control over, and thus a piece of, every transaction that happens on their phones, these smart home control centers will give the tech giants control over access to the home.

New Opportunities

I think within the next five years we will see the two fronts of this home services battle converge. Home owners will be able to book a home service on the device of their choice, PC, cell phone, or home control center. The technology companies will assign the provider using their respective home services platform and will charge for this service. In addition, if the consumer has smart locks and security devices in their home, these companies will lock and unlock the doors, but only if the assigned service provider shows up at the assigned time using their platform. The smart home device camera will record the service, arrival and departure times, and more. All of this could be saved on the cloud for the home owner to review later. In this future, most consumers are going to want to do all of their home service business on these platforms. It will be easy to book, the platforms will provide an additional warranty, the home owner will not need to be home because the smart home device will control access to the home, and the smart cameras will record and save everything in case it needs to be reviewed at a later date. Payment will be seamlessly managed on the same device the service was booked on.

Now this can all seem quite scary at first and to some extent it is. We are looking at a massive change to how services will be delivered to consumers. However we have seen these kinds of massive platform switches in the past. The internet displaced the yellow pages. In many ways that has been a huge benefit to us, but it came at a cost to many companies that lost market share because they did not change.

Back when most consumers found home services using the Yellow Pages, the platform highly favored the larger and older companies. Most Yellow Page providers sorted the advertisements in two ways. The largest advertisement was listed first. If more than one company had the same size advertisement, the company that had advertised for the most continuous years appeared first. This highly favored companies that could afford full-page advertisements and had done so for years. This made it difficult for new companies to start and grow.

The internet and search engines changed all of this. Suddenly it was possible for a new company to be found and in many cases the newer companies were more nimble and were able to dominate search. In the industry I first came from, home cleaning, this has driven a lot of consolidation. Just 10 years ago there were very few companies that did $1.0 million or more in sales at our annual industry events. Now they are commonplace. Everyone is competing to be the first $10 million-dollar company. This next shift will offer similar threats and opportunities for those who pay attention and make the appropriate adjustments.

Derek Christian is a partner in Castle Keepers, one of the largest and fastest growing independent house cleaning companies in America. Derek is Co-publisher and Director of Business Development & Sales for Cleaning Business Today, and a partner in Cleaning Business BuildersHe founded My Maid Service in Cincinnati, OH and spent twelve years at P&G working on household cleaning products. 

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