Here Is What a Big Part of Amazon’s Endgame Looks Like

Amazon Basics Pets Dash Button

Have a good look at this.

Amazon’s Dash Buttons are a very good way of creating customer loyalty (through convenience) and creating unprecedented market data in the process. Hence, brands love them.

But Amazon itself is certainly no stranger to private labels.

So, why, indeed, not combine private labels for consumables and Dash Buttons?

Fast Company this summer:

If someone owns a Dash Button, there’s a chance they’ll use it as their only way to restock a given product. This, in turn, gives Amazon a better sense of how often people are consuming household goods, how much they buy at a time, and what other products they’re buying.

“In the near term, it will allow them to define the proper quantities,” [Richard Crone, a payment industry consultant] says. “It will allow them to adjust the packaging, and the bundling of other things. So you might see what other buttons are depressed nearly at the same time as another, and the cross-brand combinations that might come up.”

We thought this through to its logical end point in July:

The convenience of the Dash Button crowds out any other means of shopping for that particular item and in the process creates unmitigated shopping data on that item. Thus, the Dash Buttons create data you can’t get anywhere else in this kind of quality.

For brands, this spots a bright light on consumer behavior.

But this data becomes especially interesting when thinking about how far Amazon may go with the company’s private labels..

So, an AmazonBasics Dash Button is not that surprising, only the timing is. I didn’t expect this quite so early in the lifetime cycle of the Dash Buttons.

dashbuttons

The Dash buttons are a surprise hit to many. To others, like us here, they represent the variety of shapes online retail can take. They also represent the advantage Amazon has, both on the infrastructure side as well as the strategice side, over potential competitors in this space like Walmart.

Remember, Walmart is hard at work building out a logistics operation fit for e-commerce. (infrastructure needed to make something like the Dash button UX even feasable) Walmart also this year rolled out ShippingPass, its ‘answer’ to Amazon Prime. (also needed to make something like the Dash button feasable) The first part is still in its early stages, the second part reveals strategic shortcomings at Walmart.

Now, like PR clockwork (see June of this year), Amazon added another 60 brands to the program and took the opportunity to talk, once again, about relative growth and a shifting order mode distribution for included brands at Amazon towards Dash Buttons.

From the press release:

Amazon added more than 60 new brands to the program. New additions include Bai, Cheez-It, Folgers, Fresh Kitty, Meow Mix, Milk Bone, PoopBags, Pop-Tarts, Powerade, PURELL Hand Sanitizing Wipes, ZonePerfect, and many others.

The important new additions:

  • Amazon Basics Batteries
  • Amazon Basics Pets
  • Amazon Gift Card

​Amazon PR on the dominance of Dash Button orders at Amazon for included brands:

“We’re thrilled to see more and more Prime members experiencing the convenience of Dash Button and restocking their everyday essentials with a simple press of a button – from toilet paper to coffee and dish soap to snacks. As a result, we’re seeing exponential growth for the program and orders increased over 5x in the last year,” said Daniel Rausch, Director of Amazon Dash. […]

In fact, a majority of Amazon orders are made via Dash Button for popular items from brands such as Hefty, Peet’s Coffee, and ARM & HAMMER.

In August of this year, the Dash Button program also launched in several European markets: Austria, Germany, and the UK; and immediately run into regulatory hurdles.

Dash Buttons are sold to Prime subscribers for $4.99 with the first order receiving a $4.99 credit, making the Buttons themselves essentially free.

Now, with the first ones of likely many AmazonBasics Dash Buttons we see a new level of vertical integration that should frighten not just merchants but manufacturers of consumables as well.

​More on this topic:

5 comments

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