It seems almost like an April Fool’s Day gag that arrived a day early, but it makes too much sense to be a joke.
Amazon (NASDAQ: AMZN) has announced a service called Dash Button. It’s a real-life plastic button that you can press to place an order for a replacement of a single product through Amazon.
It’s supposed to be a companion to products we use frequently and often run out of. In Amazon’s example material, it shows coffee, toilet paper, cosmetic products, paper towels, water, and laundry detergent.
If you’re running low on something, just click the Dash Button, and Amazon will send a replacement right away.
It’s “A simple way to re-order the things you always run low on so you’ll never run out.”
The stick-on button can be programmed to refill any of 255 different products from 18 brands participating in Amazon’s Dash program.
When the button is clicked, Amazon sends an order alert to the phone for confirmation, and then the replacement product is ordered.
This idea is not new, but Amazon could use it to completely disrupt warehouse stores that rely on customers overbuying to stay in business. What’s more, the system itself — called the Dash Replenishment Service (DRS) — is being integrated directly into consumer machines like printers, washing machines, and coffeemakers. With this service, these machines can automatically track resources and re-order supplies that are running low.
It’s the next step toward a future of fully automated, small-scale resource management.
Early Attempts
Dubai, the shining oasis in the Arabian Desert, is famous for… well, insanely expensive crap.
The ATM that dispenses gold bars… the Lamborghini cop cars… the world’s highest tennis court built 700 feet above the Persian Gulf.
Things exist in Dubai that are so luxurious that they have no other point.
Even their pizza delivery joints have push-button delivery technology.
Three years ago, a Dubai pizza place called Red Tomato Pizza debuted a refrigerator magnet with a red button on it. One click of the button would place an order for a pizza and send a confirmation text to the owner of the button. It was basically Amazon Dash Button two years before it even existed.
Dash has been in testing for approximately a year, and it originally used a different device to keep track of goods in the home. The wand-like device could scan barcodes or respond to voice commands to order products from Amazon’s grocery delivery service.
Even that idea wasn’t exactly original.
In 2012, I got my hands on a device called Hiku that did exactly the same thing.
That device, conceived by a product manager from defunct mobile computing giant Palm, never reached its Kickstarter funding goal and fell back on angel investments. It’s still deeply under the radar.
Here we are just a couple of years down the road, and these innovations are becoming reality elsewhere.
Their impact on retail is going to be profound, and Amazon Dash Buttons are going to have the strongest impact on warehouse retail.
We have you covered! Sign up for Tech Investing Daily’s FREE newsletter, Wealth Daily, today and gain first access to actionable stock market commentary, regular IPO updates, and weekly technical analysis. Plus, if you sign up right now, we’ll immediately send you our free report: “The Five Most Disruptive Trends In Tech.”
The Club Store
The economic downturn turned America on to stores like Costco (NASDAQ: COST), BJ’s, and Sam’s Club (NYSE: WMT). However, after a few years of growth, consumers are moving on.
These stores rely on economics of scale and sell customers large volumes of product in exchange for a membership fee based on the expectation that they’ll visit the store less frequently. For an annual fee, members have access to bulk goods.
Unfortunately, buying in bulk is not always cost effective for the consumer, and it’s difficult to sustain such scale if memberships are not renewed.
Wal-Mart’s warehouse stores Sam’s Club saw a half-percent decline in same-store sales in the first quarter of 2015. Sam’s Club competitor Costco reported a slightly better quarter, with same-store sales rising 4.4% but revenue that missed Wall Street targets.
Amazon Prime is essentially Amazon’s version of the warehouse membership club, but rather than offering bulk goods at reduced prices, it offers ALL products at reduced shipping prices… which effectively flips the club idea on its head. Instead of offering consumers huge volumes of stuff for cheap, it’s offering a huge variety of stuff at no additional cost.
Amazon has been cutting its way to the top of the Consumer Packaged Goods (CPG) business by offering prices comparable to its brick-and-mortar retail competitors and fast — often free — shipping with Amazon Prime.
When consumers can push a button to refill an order, they aren’t exposed to the price of the item. They are simply looking at demand, and the button provides an instant supply.
This is brilliant for so many reasons. It’s a retail game changer.
Good Investing,
Tim Conneally
For the last seven years, Tim Conneally has covered the world of mobile and wireless technology, enterprise software, network hardware, and next generation consumer technology. Tim has previously written for long-running software news outlet Betanews and for financial media powerhouse Forbes.
