Differentiate with digital

Amazon’s Dash Buttons: Smarter Than They Seem

Sucharita Kodali
Vice President, Principal Analyst
September 17, 2015

In late March, Amazon cracked up the Twittosphere with an  announcement that it would release a Dash button (not to be confused with the Amazon Dash device which is a wand for your kitchen).  It is a button that you put in your home (like your laundry room) and program to order a single packaged good (say a specific SKU of Tide detergent).  You press the button and that item gets ordered through your Amazon Prime account.  On September 2,  Amazon made the buttons available to the general public (Amazon Prime members specifically) for $5 each. 

My esteemed colleague James McQuivey just published a piece calling the Dash Buttons the Best Bad Idea of 2015 in which he outlines the reasons why this device, while widely  mocked, is actually a super interesting idea whose most fascinating applications won’t even be with Amazon.

For starters, it shows the possibility of the Internet of Things in commerce.  The ability to connect a user’s needs or wants at the moment of that need is something we’ve been talking about for a long time.  Remember the fridge that could sense when your milk is low?  Unfortunately none of these ideas have actually come to fruition and many are outright silly or impractical.  The Dash Button though represents the ability to think beyond desktops or mobile devices to introduce a completely new way of imagining consumer demand.  (And it’s arguably more useful than Subscribe and Save where you could end up with a dozen tubes of toothpaste you don’t need.)  Wouldn’t this kind of replenishment ordering make sense for a watch or other wearable?   Why not just say aloud in your home or car that you need something ordered and it gets sent to you (just like what you can already do with the Amazon Echo device incidentally)?   And best of all for most retailers and brands out there, there’s no reason that Amazon needs to own this at all (though Amazon has smartly enabled anyone from Brita to Whirlpool to hook into the Dash Replenishment System).  Why not your local grocer, or a pizza place?  Could Pampers create its own button attached to its packages that funnels an order to whichever merchant is willing to fill it?  

It's utility extends far beyond commerce.  One of the most interesting things about the Dash button is that it’s hackable.  One new dad changed the programming from an item in Prime to tracking his baby’s diaper changes.  The good news is that you too can buy Dash buttons and experiment away with them.  At $5 a pop, the hardware is unbelievably inexpensive.  So go experiment!  Even if your company doesn’t sell grocery products, have your innovation teams buy a bunch of them.  Can you record activity, monitor performance, or send signals that could be of value? 

As for the brands involved with the Dash Button program now, we believe they’re merely experimenting.  Companies are always wary of working with Amazon, as they should be because the company has a reputation of not playing well with partners and not making money, but we say not to worry in this case. We’re not bullish on anyone driving very much revenue from these devices.  We estimate that approximately one-quarter of US online shoppers are members of Amazon Prime and fewer than 15% of them are candidates for the Dash Button, due to the low number of people who buy fast-moving consumer goods online.

But it’s not what Amazon will do with Dash Buttons that is interesting. We like these devices because they help us imagine what comes next.  

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