Amazon.com Launches Home-Improvement Store

Dec. 1, 1999
CYPERSPACE - Amazon.com added home improvement goods, computer software, video games and gift ideas to its Web site last month, in its continuing effort

CYPERSPACE - Amazon.com added home improvement goods, computer software, video games and gift ideas to its Web site last month, in its continuing effort to become an online superstore.

Jeffrey Bezos, founder and chief executive said he wants Amazon to be the place "where customers can find anything - with a capital A - that they might want to buy online."

To help build its home improvement store, Amazon also acquired the Grand Forks, N.D.-based Tool Crib of the North, a tools and equipment catalog company, which specializes in construction, tools and woodworking equipment. The move is a one-up on Home Depot, which won't be offering e-commerce capabilities on its site until the spring of 2000.

However, analysts predict that Amazon won't hurt Home Depot or Lowe's. "Home Depot is a brand name that's unmatched by anybody in the industry," said Prudential Securities analyst Wayne Hood. "I don't see Amazon impacting Home Depot at all."

Analysts also say that tool sales require in-person sales assistance. "I'm not sure the do-it-yourself home-improvement business lends itself to the online channel," said ING Barings Securities analyst Maureen McGrath. "The personal-service element is so important to that business."

Hoping to tap into a $145 billion home improvement market still relatively underrepresented online (Sears sells about 3,500 Craftsman tools on its site - far below what Amazon is offering), Amazon will provide everything from nails and sandpaper to 1,000-pound table saws and concrete mixers. Hundreds of manufacturers will be featured, including most of the well-known brands such as Stanley, Black & Decker, Panasonic and 3M.

"Tool Crib already had the largest selection of tools and equipment anywhere online or off, and Amazon.com has already more than tripled that selection to launch our new Home Improvement store," said Joe Galli, Amazon.com president and chief operating officer.

The 160 employees of Tool Crib are now Amazon employees. In addition, Amazon hired 100 new people. Most of the customer service for the home improvement area will be handled by Tool Crib.

The store (www.amazon.com/home improvement) will post information such as reviews by editors and customers, and images for its products, which are arranged by categories: electrical and lighting, hardware, housewares, lawn and garden, outdoor living, painting supplies, plumbing and tools.

In addition, Amazon hopes to ward off rivals by aggressively discounting and promoting its shipping policy - $4.95 regardless of the size of the item.