Amazon has been on a path towards massive expansion over the last few years and it looks like the e-commerce giant is leaving no stone unturned. The company is now entering into unchartered territory and on Wednesday, Amazon confirmed that it’s collaborating with homebuilder Lennar. The two companies want to create what they are calling smart homes enabled by Alexa. Alexa is a voice-activated digital assistant from Amazon.
As part of the partnership, Amazon and Lennar will launch a chain of showrooms called the Amazon Experience Centers. The showrooms will be used to showcase Amazon’s smart home technologies and the kind of benefits they can bring to the average homeowner. Some of the common technologies expected to be showcased include smart home assistants, auto delivery solutions of household products and home-based entertainment solutions like Prime Video, Music etc.
The showrooms will more or less be like model homes. Anyone who’s curious to try them out can easily step into one of the model homes and see what they have to offer. Amazon confirmed that the showrooms are now open in a number of selected cities including Atlanta, San Francisco, Washington DC, Los Angeles, Dallas, Seattle, Orlando, and Miami. The company has been aggressively pushing towards diversifying its market. Although partnering with a homebuilder may seem a little odd at first, it’s an important step in testing and deploying smart home technologies to a broader market.
Amazon said in February that it will launch its own package delivery service. The company has so far relied on package delivery companies like UPS and FedEx to ship its products, and this announcement puts Amazon in direct competition with these companies. The e-commerce giant also confirmed that it’s partnering with JPMorgan and the Berkshire Hathaway in a bid to reduce the cost of healthcare for US workers. These announcements are something that not too many people would associate with an e-commerce company. But Amazon has made it clear that it will continue to pursue interests in new sectors that are way beyond its traditional business. The company also announced in January of this year that it will be buying out Whole Foods for $13.7 billion.
It’s not really clear how Amazon’s entry into homebuilding could affect the industry. The tech company has already been a disruptive force in the retail space and there are fears that the same could happen in most of the industries that the company is pursuing now. Stocks for homebuilders like DR Horton, PulteGroup, and Toll Brothers went tumbling by nearly 3% as soon as the collaboration between Amazon and Lennar was announced.
However, many analysts think that the tumble had little to do with the announcement. Rising lumber costs and high-interest rates were blamed for this. Nonetheless, there are clear benefits for Lennar that will come as a result of this deal. Millennials are definitely excited about the prospect of smart homes, and this could be an attractive market for homebuilders capable of delivering the technology. Amazon definitely has the power and Lennar will leverage on that power to expand its market to Millennials.