Is Amazon Dash, an early example of Internet of Things technology, set to revolutionise online and mobile retail? Paul Skeldon reports
The launch in the UK of Amazon Dash buttons could herald a new era in online shopping, making ordering things a matter of ‘fire-and-forget’ convenience for the shopper, and building product and brand loyalty for both Amazon and the retailer attributed to each button.
The device, available only to Prime members in the US and UK at the time of writing, enables shoppers to reorder items at the push of a branded button that can be conveniently placed around the home or office. So you may have one for your favourite detergent by the washing machine or one for toilet rolls in the bathroom.
Each costs £4.99, with the price discounted from the first order, and the shopper simply links the button to a wifi network before each press orders a replacement. Orders are confirmed by email and another order can’t be placed until the first has arrived, preventing accidental overuse.
The service is managed through the user’s Amazon app, which allows the product barcode to be scanned by the smartphone in order to attribute a product to each button.
The technology can be seen as a middle step between traditional online ordering and a world where, say, the washing machine orders its own supplies without your intervention. This type of automated replenishment – currently being worked on by Bosch, Siemens, Whirlpool and Samsung – is a consumer-facing facet of the Internet of Things (IoT) and will come to pass at some point. Buttons get shoppers used to this.
“We’ve all experienced the frustration of running out of something we need,” notes Amazon Dash director Daniel Rausch. “Dash Button and Dash Replenishment Service are designed to make that moment a thing of the past by offering offer the convenience of one-click shopping from anywhere in the home. The buttons can be placed near those frequently used items you don’t want to run out of and when you see supplies running low, the Dash Button makes it easier than ever to order more. Just press the button and your item is on its way.”
The Dash Button has been available in the US since last year. There, according to Taryn Mitchell, global VP digital sales with consumer goods company Reckitt Benckiser, the technology accounts for a “significant number of the orders we see through Amazon today”. She adds, “It’s a remarkably convenient way for customers to reorder everyday items and even adds a bit of fun to the process.”
In the last two months, Amazon say that Dash button orders have increased threefold, with orders placed at a rate of more than two a minute. Four times as many Dash Button brands are available this year compared to last year. This marks a distinct evolution of mobile and cross-channel retail as it uses the mobile to manage the shopping process rather than actually undertaking it and almost totally cuts out the use of desktop. This could be ‘pure m-retailing’ and IoT combined: a wholly new form of cross-channel.
From a retailer point of view, Dash usage builds loyalty to a product. Each button is, in effect, an advert placed right by the point of use by the consumer themselves. It facilitates and encourages reordering of the same product, which as we have seen, could eventually be automated.
But while we will see growing use of this technology across Europe in the coming year, there are drawbacks. For starters, it only works with certain, frequently replenished items. No one is going to want a button for every item. There is also evidence that these buttons could make things more expensive for consumers. Comparing prices on Dash with a wider search for the same branded item shows that Dash products are more expensive – and that’s before you start looking at the generic alternatives Dash cuts out of the loop.
This is backed up by an article by the Wall Street Journal, which reported 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%”.
These pricing issues have 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, 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, Amazon was more expensive on some items. The problem here from a consumer point of view is that clicking on the Dash button means automatically accepting the price on Amazon.
But overall, the move towards IoT technology – albeit in a baby step – is an interesting one that all retailers should be aware of. It changes how people shop online and in-store and it changes how mobile is used, how click and collect and delivery are managed, and it’s the start of a new era in how retail operates. Certainly, one to watch.