Amazon Dash Button Leapfrogs the Shopping List

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The shopper path-to-purchase just got shorter—a lot shorter. In a move that may smack of being an early April Fool’s prank (it’s not), Amazon today announced theDash Button as a product replenishment system to Prime Members, which enables instant re-ordering of many of life’s simple needs.

The branded widgets work with 255 products from 18 brands, including Tide detergent, Keurig cups, Olay face cream, Huggies diapers, Bounty paper towels, Gillette Fusion shaving products and anything else that can typically trigger a trip to the store and now can be ordered with the push of a button.

Place the gadget close to the shelf where you keep the items, push the button when you feel you are running low, and Amazon sends your phone an alert to place the order with your Amazon app.

While still invite-only, device-makers are already developing with the Dash-based Internet of Things ecosystem in mind, including Whirlpool’s smart washing machine and a coffee pot by Quirky.

Disruptive Implications

The implications of the Dash Button—an extension of its Dash scanner announced last year—are huge for retailers and CPG companies. It will disrupt the path-to-purchase model that has been effective for marketers of consumer packaged goods for years. The model focused efforts and investment on creating preference for their brands and consistently getting them into the shopping basket- bridging the in-home and in-store experience. The model has been a basis for influencing shoppers by managing the predictable path of identifying a need (replenishment), to getting a brand name onto the shopping list, to influencing the shopper to trade up or add on a sale in-store.

P&G’s classic “first and second moments of truth” approach to branding and marketing has been the Gold Standard of this path-to-purchase discipline. In their influential approach, P&G divides efforts to create preference into the shelf (first moment of truth where packaging and product claims rule) and the home (second moment of truth where the product performs). Retailers also jump onboard the path-to-purchase model by driving shoppers to their store for convenience, price and promotion, private-label brands, and their own apps with shopping lists.

But the Dash Button’s Internet of Things bolt-on ease threatens to destroy the first moment of truth and the path-to-purchase as we know it, merging the home and the store shelf and switching more power to the CPG brands. It makes the shopping list and the store irrelevant for consumables purchases.

Incumbent Brands, Incumbent Retailers

Amazon’s innovation leapfrogs the shopping list by creating an immediate means to reorder an incumbent brand at the point-of-use. The Dash button replaces the idea of preferred brand (a cognitive bias) with incumbent brand (an enduring decision). It eliminates the store and channel decision, obsoletes in-store marketing, and further elevates the smartphone as a primary means of engaging the shopper with new items, deals, and brand-switching messaging. It redefines convenience, and perhaps most importantly, it gives brands a new permanence in the home versus an ephemeral and fickle “preference”.

Because the products that lend themselves to the Dash Button are in traffic driving categories, fewer trips to brick-and-mortar retailers will result. Target, for instance, is relying on increasing their relevance to shoppers by emphasizing consumables. They will have new challenges to their strategies to drive traffic if and when the Dash Button and similar frictionless replenishment technologies become mainstream. Amazon will become the incumbent retailer. This development will likely cause tension between traditional bricks and mortar retailers and CPG companies.

Amazon Dash Button app

Unintended Consequences

Many questions will need to be answered as the Dash Button rolls out. Will there be a third party that starts to play, where shoppers can chose the retailer? Will CPG companies take cost out of their packaging and in-store marketing as the shopper switches away from making purchase decisions in-store and their products get delivered directly to the home? Being a premium service, will technologies like the Dash Button create further social polarization between the haves and have-nots, relegating shopping for consumables a chore only the lower income shopper must endure? Could the Dash Button potentially mean that affluent shoppers will be harder to get into Walmart, Target, and the Dollar retail channel?

Like the Operant Conditioning experiments in the 1930’s, Amazon has now created a way to turn our homes into a virtual “Skinner Box” that fulfills our needs for nearly immediate gratification. The implications for retail cannot be overstated, and retailers will need to match the innovation with their own innovation to stay relevant and give shoppers reasons to shop beyond price and convenience

Bill Chidley is a Partner and Co-Founder at ChangeUp. Creating Innovating Experiences that Drive Growth. http://www.changeupinc.com

Tweet the author at @chillbidley

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Connected Objects: The New Frontier for Brand Building

 

Mother sensors from Sen.se

Mother sensors from Sen.se

 

Did your elderly parents take their medications? Did you remember to feed the cat? Did the kids get picked up by the bus after school? Is your car getting the best gas mileage it can achieve? These and thousands of similar questions migrate in and out of our conscious thoughts all the time.  Now welcome to a new world where common anxiety is first heightened, and then overcome by constant connectivity to smart objects and sensors embedded in our lives. Get ready to have the words “monitor” and “notification” be two of the most common terms in our lexicon as smart objects become increasingly part of our daily experiences. The smartphones we now can’t live without are at the cusp of being extensions of our consciousness and tools for coping with our complex personal lives. Interpersonal communication and access to information was just the tip of the mobile-digital iceberg.

Our phones are fast becoming remote controls for our lives with objects as ordinary as our lamps at home already becoming controllable from anywhere. But according to Trendwatching.com http://trendwatching.com/trends/internet-of-caring-things/ , the internet is evolving to be about connected objects, or caring things, that we interact with via our iPhones and Android phones that will monitor and alert us to everything from the mundane to life threatening. Today’s breaking headlines and weather alerts will be augmented with notifications that we aren’t drinking enough water or that our floor needs to be vacuumed. How we consume, what we consume, and what triggers our actions will be transformed from passive to active. How should Brands think about this imminent reality? They certainly should not watch from the sidelines as connecting technologies like Nest https://nest.com/ and Mother https://sen.se/ potentially become trusted advisors in consumers’ lives regarding prioritizing their needs and suggesting their behaviors.

The imminent invasion of connected devices will give our homes, cars, and workplaces their own kind of consciousness that will further dilute our involvement with traditional media and change the way consumers will want to learn about and engage with brands. Retail and consumer brands who integrate into this consciousness will build strong relationships with their customers. The omni-channel centric fixation we need today is just the foundation for this future. Digital strategy will need to evolve to truly integrate seamlessly into the consumer’s world of notifications, indications, “settings” and required solutions that will be manifest in this new virtual “third hemisphere” of our brain that extends our awareness via our mobile devices.

How might this look? First think how your brand can be relevant to this expanded consciousness of connected devices. This may be easier to achieve for retailers and consumer products brands that provide life’s needs versus wants, but social anxiety is real and can also be an aperture in which to engage. What notifications can a brand provide that are not immediately linked to replenishment but seek to forge a necessary relationship? Next think of digital innovation differently, evolving from addressing need states to overcoming anxiety states. How can your brand intervene in a moment of potential distress or, better yet, be a proactive partner and get credit for avoiding distress? What products or services could you provide that uniquely support your brand’s purpose and mission and can be monetized and delivered via notifications? What potential partnerships exist between your Brand and the emerging world of smart, connected objects?

The need for brand strategies to maximize the potential of connected objects and the apps that enable them will be new territory and require experimentation with new roles for retailers and consumer brands alike.  The potential is a completely new medium with which to engage and create value. It will be fascinating to see how we expand the notion of relevance and innovation in the future as the boundary between us and our “things” blurs, and our values shift from consuming to connecting with Brands as extensions of our senses.

 

Bill Chidley is a Branding and Experience Design Consultant with over 29 years of experience at Interbrand.