Amazon’s recent, controversial retail innovation: the “Dash button”

IllyDashButton1

Amazon is a Data/Cloud Service company (think of Google), is a technology company (like Apple) and is a business process innovator and platform (similar to Uber)…

…and, by the way, it is also a Retailer…

Talking about Retail, one of Amazon’s recent, controversial innovations – the “Dash button” (www.amazon.com/dashbutton) – is quite remarkable.

It’s remarkable because it is the result of mixing Data/Cloud Services, digital technologies and business process innovations – by the way, it’s a platform too…!

What is a “Dash button”?

According to Daniel Rausch, Amazon’s Dash boss, “[you do not] have to worry about running out of everyday household essentials; when [you] see supplies running low, simply press a Dash Button to order”.

Daniel Rausch1

‘Essentials’ are commodities; many different products (Doritos, Red Bull, …) belonging to several different categories (snacks, pet supplies, beverages, office supplies, …) are available – up to 106 brands right now (I’m writing this Post at the beginning of April 2016).

DashButtons1

How does it work?

The “Dash button” is a Wi-Fi-enabled, battery-operated, compact device that allows customers to replenish goods by simply pushing a button; each device shows a brand logo and can be hung/stuck to your fridge, pantry, dish-washer, bathroom cabinet or wherever you store your every-day household products.

Push the button and the chosen item is automatically purchased from Amazon at the same (low) price it is sold online – the shipping is free (“Prime” shipping).

Setup is straight-forward, it just involves pairing your “Dash button” with your Amazon Account and with your Wi-Fi network; it is performed using the Amazon app installed on your iPhone or Android smartphone.

Speaking of money, “Dash buttons” are virtually free: Amazon’s “Prime” members buy them for $4.99 each, but receive a $4.99 credit to their Amazon account.

A significant retail innovation

I strongly believe that the “Dash button” is a significant retail innovation: it’s an awesome “Push-to-order” business – in other words it’s as if Amazon installed a sort of micro-Costco (…!?) inside the consumer’s home.

The significant innovation: Amazon is offering customers the opportunity to stock household items without going to a brick-and-mortar store or online; the “Dash button” is the evolution of online retail, it’s e-commerce with no computer, no smartphone/tablet.

My two cents:

  1. I can’t think of a more frictionless purchase process
  2. “Dash button” is an absolutely NEW sale-channel

By the way, “Dash buttons” generate an exceptional, additional data stream of consumer analytics that Amazon will enjoy very much…!

Buying-and-selling paradigm distortion

The “Dash button” radically distorts the traditional buying-and-selling paradigm: the purchase is so “instinctive” that all customary influencing factors (promos, coupons, packaging, advertising, …) suddenly disappear; the “Dash button” is perfect for the shopper that wants to save time and has no interest (and time) in shopping around; since we’re talking of commodities, the consumer is more than happy to trade her power-to-choose for ease and convenience – there is no “instant gratification” in purchasing Tide detergent…

It’s a platform too…!

Attracted by the “Dash button” business value proposal…?

…you’re seeing just the tip of the iceberg: the “Dash button” is a device, and is a platform too!

Amazon is offering the Dash service to product manufacturers, allowing them to include automatic ordering into product design; for instance, a “Dash-enabled” printer will be able to (automatically?) purchase a new ink cartridge when the one installed is running low.

When an automatic re-ordering platform directly integrated into (your) products is readily available, the sky is the limit…

Final (thought-provoking) question

Is a network of devices that automatically generate orders the FUTURE OF RETAIL?

Talking of commodities, why not…?

Andy Cavallini

 

 

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