Amazon has been reported to be prepping a local services marketplace test in one market. If the article is accurate, this effort won’t necessarily be adopted into a nationwide product — Amazon frequently tests product concepts — but should be watched with interest.

Amazon Marketplace — or whatever its final branding — would complement existing Amazon services in local, including Amazon Local, a Groupon-like deals entity now in dozens of markets; and Amazon Fresh, which is providing grocery delivery service in Seattle, San Francisco and southern California. (Amazon also touches the local marketplace via Amazon Web Services and Amazon Payments, both of which provide digital infrastructure support for local merchants.)

If launched, Amazon Marketplace would fit into the company’s mission of making it easier for consumers to make informed decisions on purchases and to buy goods and services. It would also help source deals at the local level for Amazon Local. Amazon may be frustrated at the difficulty of sourcing deals through third parties, and the expense of a local sales force, which is mostly used to sell to local retailers. As described, Marketplace would be an automated product.

It could also fit into Amazon’s growing advertising business, which has made a big play via Kindle Offers and much more importantly, Product Listing Ad tiles at the top of search pages — monetizing photo search for the first time. Amazon made $600 million from advertising in 2013, but hasn’t yet gone into local advertising, which represents a new frontier.

According to the Reuters article, the initial effort for Amazon Marketplaces would focus on hiring local services, rather than goods. Yelp and Angie’s List are the biggest players in the space, but may have less than 10 percent of the overall market.

Amazon may seek to implement the infrastructure for Marketplaces from Pro.com, a new, 30 person service that includes 15 ex-Amazon employees. Pro.com has raised $3.5 million, including funds from Amazon CEO Jeff Bezos. The service matches contractors with consumers and providing job estimates. But Bezos has never sold his personal investments to Amazon (unlike Oracle’s Larry Ellison and AOL’s Tim Armstrong). It seems especially unlikely because Bezos is only a minority investor in the company.

In any case, Amazon’s launch of a services marketplace would be somewhat ironic. In April, the Bezos-owned Washington Post discontinued a service which is almost exactly like what has been described for Amazon Marketplace — Service Alley. (The greatest irony of this is that Service Alley was built — pre-Bezos — on top of TeachStreet, a start up that Amazon purchased in an acqui-hire, and then discontinued).

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Today at SMB Digital Marketing, Jeff Fagel, the new CMO of G/O Digital, Gannett’s renamed local digital arm, offered a very Amazon-centric view of the local online ecosystem.

Gannett has 82 daily newspapers and is the fourth-largest owner of TV stations, and it has a big direct sales force. Two weeks ago, Gannett launched G/O Digital, which will focus on digital solutions for SMBs. It will replace Gannett Local and offer one-stop digital marketing solutions — website creation, Facebook production, distribution and other services to be named.

He summed up his view of the current local marketplace in three bullet points.

1. Prove it, or Churn It. “It is all about the reporting. For SMBs, the dashboard will be hotter than reaction to Mylie Cyrus at Video Music Awards.” But this is about more than just collecting data. What does it mean? You cannot just provide SMBs with stats, you have to help the business make sense of them.

2. Amazon will Force Malls to Shutter. He shared a prediction from the Wall Street Journal that 10% of shopping malls will close in next 10 years, and Amazon will be the culprit.

3. Amazon Will Acquire UPS. This will enable the e-commerce giant to dominate local logistics and reduce its costs. The play is to get closer to consumers at the local level.

So, Amazon is looming over all things local. Got it. Fagel then offered “3 Ways to Win” in an Amazon-centric local ecosystem.

1. Study Amazon and Transform Your Business. The future of local, according to Fagel, is Amazon Fresh (now being tested in Seattle and LA). Amazon is targeting 20 markets, offering same day deliver of groceries and beyond. It is about dominating same day delivery. Whatever, whenever, wherever. Anything you want within 24 hours. This product has Walmart running scared. They are now doing same day, same with eBay, and Google. Amazon is on the mind of any retailer out there.

Fagel quoted one of the partners at Andreesen-Horowitz, who said, “We won’t invest in anyone unless they can tell us why they won’t get steamrolled by Amazon.” So you might as well ask yourself that question first, and if you don’t like the answer, change your business.

2. Right Place, Right Time, Right Audience Wins.

Fagel used his company to illustrate this point. Gannett has relationships with national retailers to manage and digitize their circular data. G/O Digital is working with national retailers to efficiently push local offers in a scalable way. Fagel showed examples of work Gannett has done for Walgreen’s and Home Depot where a single video ad is customized with offers at the local level.

3. Shift from What You Sell to How You Sell It.

To make his point, Fagel cited a few non-media examples of how companies are finding new ways to reach customers. Jamba Juice, for example, has fought its way out of sluggish sales in its stores by installing “Go Machines” in schools.

Kogi is a food truck business that has built a wildly successful enterprise using a truck and a twitter account. Like the good humor man’s bell, but with Twitter instead.

Audi has put the idea out there that the future car buying experience may be entirely virtual. No sales people or even cars at the dealership, just video screens and technology that enables the buyer to create a customized experience.

In the local media world that difference will be gaining trusted partner status with the small-business. And relationships are a key piece of the puzzle.

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Should we be mentioning AmazonLocal in the same list of erstwhile “Groupon killers” as Facebook Deals, Google Offers, AT&T offers and others?

As the online retail giant launches its 30th local site — starting in Boise in June and now heading into NYC — we’re certainly watching carefully. What we’ve seen is that Amazon has assembled the building blocks very carefully, buying Woot, the electronics deal provider; investing $175 million in LivingSocial, which presumably gives it some syndication advantages and international play; and building in some very interesting and valuable network effects.

For instance, we like that Amazon automatically IDs your user name (and location). Like Facebook.

Moreover, you get extra points toward an Amazon gift certificate — 5, instead of 3 — when the Amazon credit card is used for buying local offers. There is even some potential advertising on the new edition of the Kindle that requires you to accept advertising in return for a subsidized price

Out of the box, AmazonLocal is relying on syndicated deals from the likes of LivingSocial and 6pm — a strategy also deployed by Facebook and New York Magazine. And it is adding some deals directly from the Amazon site, for watches and other goods (per Mashable).

We are, of course, expecting Amazon to be much more than a marketing channel. The company is apparently planning to hire a wide range of personnel in coming months and has been advertising job positions.

Of course, when it comes to a local offering, Amazon has stumbled before. The A9 directory, was well-executed, with an early version of street view. But ultimately, it was not supported by Amazon. Something tells us, however, that Amazon is going to dig deep with AmazonLocal. It seems to have made a strategic decision that it has to be part of the deals space, as it watches previously unrelated companies such as Google, Facebook and Groupon go for a leadership position.

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