While many people at first thought Amazon dash was an April fool, the reality is that no, it’s real. Now shoppers, at the push of a button, can order their favorite brands and bypass the supermarket completely. Will it succeed, or is it just another technological gimmick which will be all hype and no substance? Will Amazon Dash change the way we shop forever?
Amazon Dash won’t meet the needs of enough shoppers
Amazon Dash plays primarily on absolute convenience, and also the idea (be it real or imagined) or running out of one of life’s essentials. So far, so good. Enabling a consumer, as they empty the last of their laundry detergent into the washer, to immediately place an order is pretty convenient. I’d like to know how many households do run out of laundry detergent before the idea of ‘avoiding running out’ is validated, but I can certainly see the value of pressing a button and knowing that laundry detergent is already on its way.
But how about the hordes of shoppers who proclaim to love coupons and discounts and checking for prices? They are unlikely to simply press the button for Tide, let’s say, without first checking the prices of competitors. Or checking the Amazon price versus Wal-Mart. Potentially Amazon Dash might act as a broad ‘reminder’ – to buy the category, but many shoppers may then use that reminder to go online, find that Wal-Mart is cheaper, and cancel the Amazon order.
Amazon Dash (with others) will help change the way we shop forever
Notwithstanding the above, and Kenan Nashat’s valid concerns over child-proofing, Amazon Dash does enable some shoppers to bypass the store and get what they need, when they need it. That, together with other phenomena such as and the rise of discounters, is leading to a significant shift in shopping behavior – what I call shopping basket fragmentation – the biggest change to shopping behavior in a geneeration. Even if Amazon Dash takes just a small share of a few significant categories, the implications are profound:
Amazon Dash will cause retailers will lose business
Even if shoppers still trek to the supermarket, the average basket will be less. Just a couple of categories slipping out of the basket brings down revenue per store. Retail margins are thin and there isn’t that much room for sales to dip before profits crash.
Amazon Dash will cause retailers to lose funding
It is this traffic to various categories that retailers use as bargaining power with suppliers. If a whole bundle of Huggies shoppers don’t go to Target, not only will Kimberley-Clark not be investing so much with Target, nor will competitors such as Pampers. With fewer shoppers in the aisle, then there is less value in investing in shelf space, or deals, to try and steal them.
Amazon Dash will cause many brands to lose
Clearly there are only so many Amazon Dash buttons a family will have. If a shopper is prepared to surrender the possibility of choice for the convenience of an order, then alternative brands will lose. Increasingly second and third tier brands will find it hard to get attention. As we have seen in the UK, Tesco are already recognizing that the listing of so many brands is unsustainable.
Amazon Dash – the big win for Amazon is not sales, but advertising
And of course Amazon win, because they (in theory at least) have shortcut the purchase journey and taken the needy consumer straight to the point of purchase. Not only does that drive sales, it also drives advertising revenue. When Olay’s competitors decide to stop spending at Target, how much might they invest in Amazon advertising, trying to intercept the shopper before they confirm the order?
The interplay between convenience and price will be the most interesting. How many shoppers will be prepared to sacrifice the possibility of a deal for the convenience of one press ordering? I’m not sure if I really want to have boards of brand buttons across my house – and a scan on my phone might be simpler. But whether Amazon Dash works or not, the reality is that the ‘big retail’ game is over. Shoppers have the power of choice firmly in their hands, and that genie won’t go back in the bottle.
What do you think? Will Amazon Dash have a significant impact? Are there other shopper technologies that you think will be more impactful? Let me know.
Image: Amazon
