Amazon in mad Dash to add buttons in U.S. homes
For those who may have questioned whether Amazon.com was joking around when it introduced its Dash button exactly one year ago today, it’s become abundantly clear that was not the case. The e-tailing giant has announced the expansion of the Dash program to more than 100 additional buttons enabling customers to order thousands of popular brand items across a wide variety of CPG categories.
“Prime members are using Dash Buttons at an increasing rate — over the last three months, Dash Button orders have grown by more than 75 percent,” said Daniel Rausch, director of Amazon Dash, in a statement. “Customers are using Dash Buttons more than once a minute, helping ensure they never run out of their everyday essentials.”
In a RetailWire webinar earlier this week, “The Rise of Convenience Commerce,” Ken Cassar, VP, Analytic Solutions at Slice intelligence, told attendees that Amazon sold nearly 400,000 Dash buttons in 2015. Dash reorders occur roughly once every two months and the average order size is large. Two Procter & Gamble products, Tide and Bounty, have average Dash reorder sizes of $20.11 and $27.11 respectively.
Slice Intelligence has also found that the use of Dash buttons pretty much squeezes competitive brands out of Prime members’ purchases. Bounty, for example, accounts for 99 percent of a customer’s category spending after a Dash button purchase. P&G rival Kimberly-Clark’s Cottonelle brand has 82 percent of category spending with Dash users.
New brands available using Amazon Dash include Brawny, Charmin, Clorox, Doritos, Energizer, Gain, Honest Kids, L’Oreal Paris Revitalift, Lysol, Peet’s Coffee, Playtex, Purina, Red Bull, Seventh Generation, Slim Jim, Snuggle, Starbucks, Trojan and Vitamin Water.
Dash Buttons are available to Prime members for $4.99 each, with the amount of the purchase credited to their Amazon account. To reorder products, Prime members press the Dash button. Orders come with free two-day delivery.
- More Than 100 Amazon Dash Buttons Now Available, Giving Prime Members the Easiest Way to Order Thousands of Products – Amazon.com
- Is Amazon’s Dash the future of shopping? – RetailWire
- Retail Disruption! The Rise of Convenience Commerce – Slice Intelligence/RetailWire
- Year later, Amazon goes bigger on Dash order buttons – USA Today
Discussion Questions
DISCUSSION QUESTIONS:
What are your expectations for consumer adoption of the Amazon Dash button along with other IoT devices for retail purchases over the next few years? Is “squeezing out” competitors with a Dash button ultimately a good or bad thing for retailers?
Poll
BrainTrust
Matt Talbot
CEO & Co-Founder, GoSpotCheck
Kai Clarke
CEO, President- American Retail Consultants
The Dash button is a stepping stone on the pathway to more robust IoT commerce plays like Alexa and the Dash Replenishment Service, but it’s doing better than many expected. And it’s only the beginning.
The physical and digital shelves aren’t going extinct, but at one of the frontiers of growth for consumer products there is no shelf.
I published some brief thoughts on that scenario here.
Dash allows consumers to reorder with a push of the button. Echo takes voice orders. Little by little, Amazon is dominating the market for items ordered from the IoT. The company has the brands, the delivery systems, competitive pricing and great customer service. Why should consumers use their valuable time to shop elsewhere? It’s not a matter of squeezing out other brands — it’s all about consumer trust and convenience.
I highly doubt that the Dash button will totally squeeze out competition. The Dash concept is cute — not secure — and another way for a hacker to back door into a users account. Amazon will soon have to have a Dash Hack weekend and give a prize to the teen that backdoors into a Prime user’s account via the Dash button address.
Some shops run for IoT. Others have stuck with proven and secure IoT technology platforms. Dash along, Millennials. We will watch Amazon control more and more of your life.
Who would have thought this could happen? Another way to buy. It’s a perfect solution for an online company, be it Amazon.com or any other company, to create potential loyalty. Keep the price competitive and make it as easy as possible for the customer to buy, and the retailer may, at least for staples such as consumable supplies (soaps, detergents, etc.), create some customer loyalty.
Good or bad, it’s here. Don’t just deal with it. Embrace it. Is there a “Dash” type button in your business model? Should there be?
This may represent a new normal and traditional retail may need to align. The Dash button can be a good thing for retailers if they embrace IoT devices and do not dismiss them too quickly.
I have a hard time seeing Dash buttons in my three to five year crystal ball. They are certainly an opportunistic way to capture some share and loyalty in replenishment categories and, if I marketed one of those, I would certainly participate. But they seem like a very inefficient solution from both the consumer and supply chain perspectives. How many Dash buttons do I want to keep track of? And how many single item shipments can we efficiently distribute? High value, bulky, heavy, frequently-purchased items, sure. But how long will it take to have IoT solutions (or just another Amazon app) that bundle those items together more efficiently once a month or so?
I must be on some other planet. Here I am with a legendary bad memory, and even I can remember to order laundry detergent for the time it takes to go from the laundry room to the computer.
I confess, I don’t get the Dash buttons in the slightest. I simply don’t get it.
I can see it as clear as a … button. Convenient, handy, efficient, a bonanza for the provider of the product — the manufacturer … or a retailer? Definitely will squeeze out competitors who aren’t on the ball, er, the button.
It is certainly a step in the direction for IoT driven retail. I am wondering if the next step is to drive the cost down enough and also get the volume high enough for CPG companies to start packaging Dash like capabilities into product packaging? Would make for intriguing scenarios for retail dis-mediation for manufacturers.
I deal with a lot of companies in the home health care market. When I read this, I thought this will keep growing. Just think of our aging population and what this will do to make their life just a little easier, as the dash program or something like it continues to expand in the number of items available.
Consumer adoption of Amazon Dash and other IoT devices will steeply increase over the next several years. While consumers claim to desire variety, they also conversely demand convenience, which typically don’t come hand in hand. Historically the biggest market players (think Walmart, Johnson & Johnson, etc.) have dominated their industry, resulting in increased convenience and decreased variety for consumers.
“Squeezing out” can be a good or a bad thing for retailers, depending on how suppliers handle the situation. Retailers can take advantage of the circumstances by buying in bulk from a few, select brands. However, if suppliers get wise there is the possibility that they will increase their prices, putting pressure on smaller, non-chain retailers and potentially edging them out of the market.
Conversely retailers can use “squeezing out” as an opportunity to offer smaller name brands not offered by the big box stores. But these price points will likely be higher and the quantities smaller, forcing the retailer to make a decision about what’s best for his or her business in the long run.
This is a limited use concept. Only products that are regularly depleted can be applied to a Dash button, and the fact that only select manufacturers are available on the Dash list only limits Dash even more. Amazon needs to create a Dash button that is limitless (i.e. can order any product from the website) and can be programmed for each household.
AMZN continues its effort to remove friction through the use of the patented Amazon Dash button. So what? Some thoughts:
Technology helps us forget (how many phone numbers do you know?). In the future, WiFi connected everything (appliances, printers, water filters, etc) will offer us the ability to order when the thought occurs, or perhaps automatically when the toner is low, or when the light bulb burns out. If you are an Amazon prime subscriber and you don’t mind committing to a brand and you don’t want to remember anything, then sure. The question to retailers is: how much of your audience is this type of shopper now and in the immediate future.
While the Dash is patented, I can see other IoT implementation options for ordering but as far as who gets the order and who can fulfill it at a profit, I guess that leaves only a few options. If I were in a business that has a center aisle and the revenue I earn in that aisle is relevant, I guess I’m watching this.
My guess is that enterprise software firms with CPG customers can provide this functionality in a second, but the back end is the issue — who gets the order? That brings up Kenneth’s scenario.
But for real and not an April fools joke, the Dash button has been hacked for many different alternative uses — such as a hack to order beer from alcohol delivery startup Drizly. You can find the code here.
I haven’t started using Dash buttons, so I can’t speak for whether it’s going to become a part of my (or others’) lifestyle, but let’s put the reported customer usage in perspective:
Consumers use Dash buttons once per minute? That’s about 1500 single item orders per 24 hour day.
400,000 dash buttons were sold in 2015? That means the average button sold is pressed once every 266 days.
That tells me that people who buy Dash buttons are generally ignoring them — who orders detergent, toilet paper or other household necessities that infrequently?
Amazon sells over 5 billion items per year — dash button orders account for 0.01% of those orders. I think this is still in the experimental phase.