For CMOs, Amazon Dash Buttons “The Best Bad Idea”
By Sarah Mahoney
Amazon's Dash Buttons, introduced dangerously close to April Fool's Day this year, have been laughed off by plenty of pundits. But a new report from Forrester says the little gizmos represent a terrific learning opportunity for CMOs. In fact, lead author James L. McQuivey calls the buttons, which sell for $4.99 apiece and now include some 29 major national brands, "the best bad idea of 2015."
True, he concedes, they will do little to increase sales for any of these brands. Of the estimated 25% of the online shopping population with an Amazon Prime membership, fewer than 15% are even candidates for the Dash Button "due to the low number of people who buy fast-moving consumer goods online," he writes. And even those who use it are likely to abandon it after a brief trial period. But he also says that while they seem silly or indulgent, "they are right on target."
The buttons present a major opportunity for CMOs to experiment with "frictionless transactions," and gain brand exposure in a competitor-free environment. "Dash Button is a kind of sandbox for marketers eager to learn how to extend product opportunities and experiences directly into consumers' homes," he writes. "But the real opportunity will come as marketers think about other automatable behaviors that could be routinized for consumers, raising their satisfaction while locking preferred brands in place."
The key idea is hyperconvenience, and technology that reduces the time between when a consumer says, "Oops, almost out of laundry soap" and then actually makes her next detergent purchase. Calling it the "Uberification" of shopping, he says the idea that "you can order a product in the moment you realize that you need it is not an exaggerated retail case: It represents the future of retail in categories like grocery."
He points out that Amazon has already taken the button concept to the next level with Amazon Echo, a voice-activated device that can also make Amazon Prime purchases. "This is a big-data-meets-Internet-of-Things experiment. Amazon knows everything that it needs to about its Prime users to make Dash Buttons work. It knows how many of them order from these 29 brands. It knows how many of them place orders for single items. It knows how many of them shop for fast-moving consumer goods." Essentially, he adds, it gives brands an opportunity to stand out from competitors and "reap the tremendous rewards of higher lifetime value, greater customer retention, and more full-price sales."
More importantly, he points out that the Dash Button is simply the first in what is likely to be a long line of shopping-convenience technology. "Google, Apple, Facebook, and other startups all have their eye on commerce and have hooks with hardware and software in the home (e.g., Nest devices)." And unlike Amazon, "these companies aren't competitive with large retailers like Wal-Mart, so they are well positioned to partner with large branded merchants with national footprints."
Source
"For CMOs, Amazon Dash Buttons 'The Best Bad Idea.'" MediaPost, 9/16/15.