Amazon Dash buttons, released in 2015 in the US and 2016 in the UK, were initially considered an April Fools joke. However, they have quickly been adopted throughout the US and UK with sales in the thousands.
Many cite convenience and novelty as their reasons for buying the buttons. Some have predicted that this way of shopping will change retail shopper behaviour forever, but are they right?
Amazon Already Dominates Several Areas of the Online Shopping Market
Amazon is indisputably one of the online shopping giants, with hundreds of warehouses around the world and up to 306 items being sold per second worldwide. It burst onto the scene in 1994 and has steadily expanded its customer base and product range.
Amazon’s main selling point has always been that it is cheaper than its competitors, whether its competitors are real-world stores or other online shops. While eBay has now slipped into that sector as well, offering extremely cheap imported goods, Amazon still has a major hold on the market. Over the past few years, it has gradually expanded into another sector: grocery delivery, aimed at taking custom from supermarkets. With extra features such as one-hour delivery in some areas, it is hard for many supermarkets to keep up, although many are trying.
The emergence of Amazon Prime has changed shopper behaviour. Whereas normal retail shopper behaviour causes shoppers to spend less when shopping online, Prime encourages a dramatic increase in impulse spending. Shoppers tend to use Prime to buy products on impulse more — and with one-day delivery they have little time to regret purchases prior to delivery.
Dash Buttons Help Amazon Expand into a New, Ultra-Convenience Market
Amazon Dash buttons put in pre-selected orders for next-day delivery automatically when pressed. Shoppers can only order one of the product at the time, stopping accidental multiple orders, and orders can be approved before shipping. The product type and quantity are pre-specified by the buyer, ranging from single products to multipacks.
Ostensibly, this means that when you notice a product is running low — laundry powder or dishwasher tablets, for example — you can order more automatically. While this makes sense for some products, others are a little less practical. How many families go through enough Play-Doh to warrant a designated Amazon Dash button?
Amazon Dash is likely to be successful in some areas, particularly with customers who want ultra-convenience over value for money. If it links in with Amazon’s one-hour delivery service, it could have an even wider customer base.
It does have its downsides, though, and these downsides make the Dash Button unlikely to become a standard product in every home. Automatic purchasing makes it hard to keep a tight eye on shopper’s budgets. As product prices can change without warning, it also means that shoppers may not be getting value for money on their purchases.
Does Amazon Dash Offer Something New and Novel — or Just Repackage an Old Service?
While it is possible to get Dash buttons for almost anything — the range of products includes cat litter, protein powder, and lever arch files — the question is whether they offer a real choice. Although the ultra-convenience of ordering with a single button press is obvious, many early adopters are beginning to regret their decision.
Although on the surface, Amazon Dash offers a wide range of products, the actual choices that shoppers can make is quite narrow. They may offer different kinds of laundry powder, but they don’t give users the chance to browse or take advantage of special offers. Prices are also liable to change without warning, meaning shoppers need to check their order on their phone before approving it — which is often more hassle than just ordering the product outright on their phone.
Uncontrolled purchasing also means that shoppers have a reduced ability to budget and, at times when money is tight, ordering an expensive product at the wrong time could tip shoppers into the red.
Is It the First Step Towards Amazon Fully Integrating with the Internet of Things?
While Amazon Dash buttons may not be universal — yet — they are a signifier of things to come, both for Amazon and in the wider retail sphere. As shoppers become more and more reliant on the Internet of Things, the desire for ultra-convenience will spread. With washing machines automatically ordering laundry powder and fridges automatically ordering milk, the consumer’s reliance on technology in day-to-day life is likely to just keep increasing.
There is also another area which customers may be less aware of: Amazon’s use of data as a resource. Through monitoring of Prime accounts and the way in which their customers are making use of Amazon Dash buttons, Amazon can gather valuable data about its customers, giving them the opportunity to target their marketing strategies more specifically and therefore have the chance to increase their customers’ purchase frequency.
Are Amazon Dash and Amazon Prime Habit-Forming in Their Users?
Amazon Dash is based around the Amazon Prime service. While many have Amazon Prime (millions in the UK alone), at £79 per year, it isn’t an affordable option for all, especially as many supermarkets offer delivery passes for far less. [Amazon Prime costs $99 per year in the United States where it’s estimated more than 50 million households are members.]
However, once people have Amazon Prime they often switch most of their shopping to it, especially as Amazon expands into the grocery market. This means that products that Prime customers would have bought elsewhere are sourced from Amazon, increasing their reliance on the company. For simplicity’s sake, many trade their ability to search for bargains for the ability to carry out all of their purchases in one place.
Dash as a Product May Not Be Good Value at the Moment, but Where Is It Going?
Although Amazon Dash may trigger some changes in the way that customers shop, it isn’t the end of business for all other online stores. While ordering products automatically via the Internet of Things may well become the new big thing, Amazon Dash buttons won’t have that big an impact on wider shopper behaviour, because it just doesn’t offer value for money.
Amazon is also expanding into other aspects of futuristic retail, and the most newsworthy of these is Amazon Prime Air, using drones to deliver light packages to prime users within a half hour window. While they could potentially lessen the number of deliveries on the road, reducing pollution and traffic, there are other obstacles to overcome — their impact on wildlife (although so far drones have caused no recorded damage to birds) and potential intrusion onto commercial or military flight paths. There is also a higher potential for theft.
Another area in which Amazon is competing with supermarkets is through Amazon Go, a supermarket that uses retail technology, rather than checkouts, to charge customers via their Amazon accounts for the products bought. As of yet there is only one store open. But it’s been reported Amazon has plans for around 2000 in the US. Amazon has denied that.
Rather than being a long-term product, Amazon Dash buttons are a signifier of things to come. Through their popularity, it is clear that other companies, both brick and mortar and online, will need to expand their range of ultra-convenient options to stay relevant to a customer base that demands convenience above all else.
Based in the United Kingdom, Shopping Behaviour Xplained Ltd is a shopper research agency that operates in seventeen countries.