April 2, 2015

Amazon Dash Button

Last April 1, Amazon announced the release of it's latest product called the Amazon Dash button. You can find more information about it here on Amazon's own website. Amazon has essentially taken a big step towards making the "Internet of Things" a reality for many households. It is going to be open to Amazon Prime members and the Dash button will link directly to the member's account via wifi. A simple push of the button will trigger a re-order of the said product.

Below are some of my initial thoughts:
  • Amazon continues to look for new ways to expand its business and continues to show that it is not afraid to try something new or innovative. Even the way the product was launched was innovative. I read a great article here by Ad Week talking about how the launch on April Fool's Day added to hype as people did not know whether to take it seriously or whether it was a joke.
  • This is likely to be unprofitable, at least at the start. I can imagine that shipping small quantities of household goods on demand cannot be very profitable in the short term. Likely, Amazon is going for a more long-term strategy here and looking to become the dominant online player in providing non-perishable household goods. Amazon has been known to operate parts of it's business at a loss to either prove a point or gain an advantage over competition. In this case, it appears to be the latter.
  • Limiting the service to Prime members is genius. It limits exposure of the service at the start to the most loyal customers only thereby helping to build the relationship with them even further. If the service lives up to the hype and promise, you can bet that many will look to become Prime members themselves. If the service bombs, loyal Prime users are likely to jump ship or drop their Amazon accounts. Win-win scenario.

As always, I look forward to this new innovation with much curiosity and amazement. We live in an exciting time where everyday something new is developed that makes our lives a little bit better. What do you think about this latest development? Are you excited to try it out?

Link here to the Amazon website