Sunday, April 5, 2015

Amazon Dash

Amazon introduced "Dash Button" last Tuesday (3/31, link), which is a magnetic button device that allows for Prime members to order everyday household products with a simple pressing of the button. The device connects to home Wi-Fi network and is set up via Amazon's smartphone app. When pressed, users will receive a notification on their phones and they can cancel if the order is misplaced.

So far, the magical button is by invitation only, availability to initial customers will be announced shortly. I found 265 items on Amazon under the search term "Dash Button Products". Amazon is likely to bring about over a dozen different buttons in its first launch, as those 265 results include different packaging size and flavors of the same products.

Separately, Amazon also launch a new Dash Button like device for its Amazon Fresh service. The device/service is called Amazon Dash (link). It can scan the bar-code of household items (that are available via Amazon Fresh). Then users can place orders by voice input (pressing a microphone button on the device). The setup is similar to Dash Buttons, via Wi-Fi and the Amazon app.
I think this is the Dash Button is the biggest news in IoT this year. It is an elegant, alternative answer to the question: "when will a smart fridge place orders for the owner?" The solution presents minimum friction, as it utilizes services that today's Amazon customers are well acquainted with: Wi-Fi, Amazon app, and Amazon Prime. There is no need for complex settings for payment, connectivity, and user profile. I believe it will have profound implications in the following areas:
  • Growing Prime Membership: The service is free for Amazon Prime members. I assume it will stay exclusive to Prime members. I believe it will help grow Prime membership base (especially in metro areas) as Amazon offers one more elegant solution to shopping everyday items.
    • For Amazon, the Dash Button is essentially a low cost way to secure (almost) life-time streams of household item consumptions. At this moment, I can hardly think of a competitor with easier setup and better logistical support. 
  • Changing Home Appliance Design: IoT is headache for home appliance makers, who are mostly at a loss to problems such as interface design, feature choice, and back-end service offerings. It is far easier for an appliance maker to ship a fridge with programmable Dash Buttons than building the whole chain from scratch. 
    • Amazon is already introducing "Amazon Dash Replenishment Service (DRS, link) for business partners. It seems that Whirlpool will integrate the service in the Fall '15 washing machines. So (at least one) home appliance maker is seeing the compelling benefit it will bring.
  • Inspiring New Consumer Electronics Designs: frictionless repeat orders, simple one-button design, integration into existing app/service ecosystem, utilizing the ubiquity of smartphone/tablet and Wi-Fi network. What will be the use case be for wearables? 
    • What if Dash Buttons turn virtual on one's smart watch? When users approach their fridges, washing machines, pantries, the proximity sensor at these locations detects and identify the users, then prompts the smart watch to bring about orders users can place. 
  • Pushing Out Alternatives (2-tier) Brands: once a brand or a product turns into a button, I think it is very unlikely that users will change (I am not getting two buttons for laundry detergent). The power of default will be similarly powerful in this case as well.
Overall, Amazon Dash Button is a very exciting products announcement. I believe it will leave profound impact on e-commerce. It sets a very high bar for home IoT market participants due to the (promised) elegance. I cannot wait to get my hands on those buttons. 




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