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Amazon Dash inflating grocery prices – or is that the price of convenience?

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Amazon Dash, Amazon’s smart button for ordering selected branded groceries, was launched in the UK last week claiming to bring convenience to consumers by enabling them to replenish products at the touch of a button. But is it making things more expensive for consumers?

Comparing prices on Dash with a smartphone running the app finds that Amazon Dash products are more expensive.

This is backed up by an article by the Wall Street Journal, that finds that to use Dash “companies pay Amazon $15 for each button sold and 15% of each Dash product sale, atop the normal commission, which typically ranges from 8% to 15%”.

It has also been noticed by users of HotUKDeals, the UK’s biggest social commerce platform and founding member of Pepper.com, a global social commerce group.

Danny Munday, general manager of HotUKDeals, explains: “It’s exciting to see technological advances and products becoming available for the smart home that are designed to help make our lives easier, but it seems, with Amazon Dash, that this comes at the expense of the consumer who are blind ordering without knowing the price of convenience. Our members often comment on Amazon’s price fluctuations in a bid to help other users of our community know whether a deal price is good or not and it’s these price changes that raise concerns about Amazon Dash.”

According to one of HotDeals users, who likes the concept of Amazon Dash, they found that Amazon was more expensive on some items when they checked pricing, so when consumers click their Dash button they’re automatically accepting the price on Amazon, says Munday.

“Their smartphone app allows you to check the price as well as set the amount and size of the ordered product, however this negates the benefit of Dash,” he says.

In April 2016, consumer analysts Mintel produced findings of a report, which showed that 29% of UK online grocery shoppers are shopping for groceries more online now than a year ago. According to the report, 33% of Brits who are shopping more online are doing so as it allows them to keep better track of how much they’re spending, showing how important the process of price checking is to consumers.

With this additional payment will we see these brands negotiating higher prices with Amazon and, as a result, other online retailers? Depending on how successful the service is these brands could potentially take a hit on their margins – something that only time will tell, warns Munday.

And expect more criticism and soul searching to come: Amazon is also taking on the take away food business, pledging to add take out to its Prime Now service in London.

“The same way its Pantry and Fresh offerings spooked Ocado, this news is likely going to put the fear of god in Deliveroo and UberEATS, especially since those two companies find themselves bombarded with criticism over the way they employ their workers (to be fair, so is Amazon).” says Connor Campbell, a senior market analyst atwww.spreadex.com. “Despite the dystopian overtones of going to one site for every single need, the move somewhat makes sense for Amazon given its expansion into the food market in recent years.”

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