So long, Amazon Dash button: An experiment that delivered intangible value to Amazon on many fronts
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So long, Amazon's Dash button. Thanks for the memories and experiment that likely provided more than a few intangible benefits for the e-commerce giant.
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CNET's Ben Fox Rubin reported that Amazon will stop selling its Dash buttons globally. He writes:
One of the concepts that best captures the quirky imagination of the world's largest online retailer is the Dash button, a handy (and kind of ridiculous) device you press to reorder stuff like dog food, bottled water or septic treatment powder.
Quirky, yes. Ridiculous? Not really.
When Amazon launched Dash in 2015 it was a precursor to the connected home and Internet of things and an AWS developer tool. It was also an experiment that may have even been a precursor to Amazon's ad business. As Amazon built out the Dash ecosystem, I recapped the possible intangible benefits but noted that the effort was a break-even venture at best.
Here were the business takeaways from 2016.
- Returns to CPG (consumer product goods) companies are mostly intangible.
- Marketing is another intangible.
- Companies pay Amazon $15 for each button sold and 15 percent of each Dash product sale.
- Consumers pay $5 per button, but Amazon makes them free with a rebate. Prime members can buy the buttons.
The model didn't quite hold up, but probably gave Amazon more heft with CPG giants to better compete with the likes of Walmart.
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Slice Intelligence found that folks bought the Dash button, but didn't really use them for reordering. After all, Dash was really about the software and services. I'd argue that the actual ordering via Dash didn't matter. Dash was more of a reminder that you could easily replenish supplies via Amazon. Through that lens, Dash was more of a trinket to signify the following:
- Amazon is everywhere in your home.
- Amazon is a CPG player and subscriptions to supplies make sense.
- Software can make domestic life a bit more automated.
- And Amazon can market within your home in a way that other tech giants can't. The Dash button was basically turning your appliances into Nascar sponsorships.
Back in 2016, few of us thought of Amazon as a place where we'd order laundry detergent and toilet paper. Now Amazon is a place where we subscribe to those consumables. Dash functionality is basically built into appliances via software developer kits. Dash was like training wheels for simply telling Alexa to replenish supplies.
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Those Internet of things replenishment connections to Amazon will ultimately pay off. Cowen & Co. recently looked at the e-commerce penetration by vertical and consumables and food and beverage penetration was low.
Think of Dash as an early effort to prime the consumable e-commerce pump.