Amazon’s Outside The Box Thinking

Saying Amazon had a busy week, or even that Amazon had am ambitious week, isn’t much of an announcement. Given the volume of things that are usually pouring out of Amazon, saying Amazon had a busy week is just an unnecessarily long way of saying that another week is over.

Sometimes, even by the baseline set by Amazon’s normal level of hyperkinetic behavior exceeded — occasionally in genuinely surprising ways. Amazon isn’t getting the sizzle of the week this week because it did more. If we were awarding for volume, Amazon would have taken the prize last week for its surprise device event and introducing the world to the Amazon Basics Alexa microwave.

Amazon merits the sizzle for thinking out of the box this week — both in terms of merchandise and its ongoing expansion into physical retail.

On the merchandise side, Amazon is moving into houses — not the real estate market or home construction, but prefabricated homes. As of this week, the Alexa fund has put in an investment with Plant Prefab, a leading home design and prefabrication company. The funds came as part of a $6.7 million Series A round that also saw participation from Obvious Ventures. The money will be put toward senior hires, building the marketing and sales team and developing the company’s patented Plant Building System.

Plant Prefab is the country’s first home factory focused on sustainable construction, materials, processes and operations. The company’s unique approach reduces construction time by 50 percent and cost by 10 percent to 25 percent in major cities. Its homes are designed and built to minimize the negative impact of development on energy, water, resources and indoor air quality.

So is, “Alexa, buy me a house,” a command that users will be soon learning? It might sound funny, but, according to Plant Prefab founder and CEO Steve Glenn, given the housing market situation in many American metros, it is a less zany idea than it seems.

“In housing-crunched major cities like Los Angeles, New York and San Francisco, along with areas like Silicon Valley, it takes too much time to build a home from groundbreaking to occupancy, and labor shortages, construction delays and increased construction costs are exacerbating this trend even further — and making homes increasingly less affordable,” said Glenn. “Building homes in factories addresses these challenges, particularly as we’re able integrate online technology, new building systems, and automation to dramatically reduce the time and cost necessary to design and build high-quality, custom homes.”

Paul Bernard, director of the Alexa Fund, noted that voice is at the heart of home technology, with “20,000 Alexa-compatible smart home devices from 3,500 different brands” currently occupying spaces in consumers’ homes.

“Plant Prefab is a leader in home design and an emerging, innovative player in home manufacturing. We’re thrilled to support them as they make sustainable, connected homes more accessible to customers and developers,” Bernard said.

So will customers be able shop for a home on Amazon? Believe it or not, were that to come to pass, it wouldn’t even be all that unprecedented. Sears once sold about 75,000 prefab homes via its catalog.

Sears has been out of the prefab and custom home business for a while, however, and, until this week, it didn’t seem much like a mantle that was likely to be taken up again in retail anytime soon. Amazon does like to be surprising, though, and also has some affinity for recycling some of Sears’ greatest hits, rebooted for the digital age.

Other big news from Amazon this week was that it has opened what is being described as a “4-star store” in New York City.  The items on sale in the new location in SoHo will have a 4-star rating or above on Amazon’s site.

“We created Amazon 4-Star to be a place where customers can discover products they will love. Amazon 4-Star’s selection is a direct reflection of our customers — what they’re buying and what they’re loving,” the company wrote in a blog post.

The Amazon store will be a bit like the Amazon site, condensed for real life. It will carry a wide range of goods in a very curated way — devices, electronics, kitchen, home, toys, books and games will all be up for grabs. According to Amazon, the products in-store have earned more than 1.8 million 5-star customer reviews.  Items will further be categorized by things like “Most Wished For,” and feature products that are added to Amazon Wish Lists most often; “Trending Around NYC,” spotlighting NYC centric products customers are buying on the site; “Frequently Bought Together” items and “Amazon Exclusives.”

The store also encourages comparison shopping and Prime membership.

Digital price tags that show the Amazon website price and the list price are on each item. Prime members pay the Amazon website price in-store, and customers who aren’t already members can sign up for a free 30-day trial and receive the Amazon website price in store. Amazon is counting on all of Prime’s other benefits to keep customers interested after the trial period is over.

Amazon has gone from being the internet’s favorite book store to the internet’s everything store over the course of about a decade. With the Alexa ecosystem advancing, Amazon’s physical footprint expanding and the list of things Amazon sells stretching to mean, quite literally, “everything,” pretty soon no one will be including the word “internet” in front of the Amazon name.

That isn’t to say that all of its efforts will succeed. It remains to be seen if anyone will want to get a prefab house from Alexa, and Amazon’s 4-Star Store will rise or fall depending on whether its physical curation is as good as its digital counterparts. Amazon could learn the lesson that it has taught so many other retailers — selling in real life is really, really hard in the age of eCommerce.

Amazon does manage to keep our attention and keep us guessing, and that is certainly good enough for the sizzle of the week.



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