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CPG’s Dash for Consumers Cash

AcxiomApril 20, 2015

“I want it now! No, it can’t wait!” says Jack Simpson, a 37 year old man-child.  Yes, you read that correctly – so what’s Jack crying about?  He’s crying because he wants to get his laundry detergent without having to go to the store, or purchase it online, as even that has become an inconvenience.  Well Jack, cry no more, as Amazon has yet again come to the rescue with the solution to make life even more expedient.  After receiving Amazon’s new toy, Jack’s eyes lit up like they did when he got his first Tonka truck for Christmas.  And, as one of Amazon Prime’s 40-million fiercely loyal members, this is a God-send that will help strengthen Jack’s loyalty.

Amazon’s continual innovation to meet consumer’s needs has now opened the doors to capitalizing on the omni-channel, Internet-of-Things revolution that may give CPG brands the edge they have been seeking for years.   Amazon already has the industry’s highest percent of visitors who end up buying at over 60% compared to other e-commerce retailers at around 6%, and this turnover rate continues to break down the barriers between brick-and-mortar and online retail. Once again, Amazon is changing the retail game by creating the ultimate omni-channel tool – and CPG brands are salivating over it. The Amazon Dash, a push-button auto-replenishment service for Amazon’s Prime members was launched along-side it’s Dash Replenishment Service (“DRS”) API that allows any smart device to implement an ‘order more’ option.  Essentially, the Dash is a small magnet-sized device with a button that, when pushed, will transmit a Bluetooth message to your phone’s app to purchase the desired product.  One product per button.  Brands including Tide, Gillette, Bounty, L’Oreal, Clorox Wipes, Glad Trash Bags, Cottonelle and many more are already implementing the button.

Imagine this: as Jack walks into his home and flick on the lights, there is a GE button just below the light switch. In case his bulb burns out and Jack doesn’t want to be left in the dark, he can order bulbs with the mere press of a button.  Or, in his kitchen, there are SmartWater, Gatorade and Kraft Mac & Cheese buttons plastered on his fridge, just in case he should need to eat and drink something the next day.  Even better, on his bathroom mirror are Gillette and Cottonelle buttons. God forbid he can’t shave in the morning or needs that extra square of toilet paper in a hurry…  Yes, I am being a bit facetious, but you can start to see how this – although a solution – can become an ugly, blatant, branding festival in your home.  It’s enough that these companies market their products to us 24/7, but to have their branding plastered all over your home, obviously for your convenience, is another story.

Amazon’s intent has always been to break down the barriers of the consumer shopping experience, and now its clear focus on CPG as a massive area of growth has brands jumping all over it.  Consumer goods brands have always faced the challenge of knowing who is buying what and how frequently.  Retailers traditionally don’t share much transaction data with brands, or make them jump through hoops to get anything worthwhile.  CPG has also struggled with gaining traction in e-commerce, as sales numbers for large brands have been historically low.  Amazon is now striving to give brands the transparency they have been craving by offering sales numbers to companies who buy a certain amount of advertising from them per year.  This requirement may change as more brands jump on board the Dash.

Consumer brand marketers’ dreams are now coming true, having their brand logo directly in the consumers’ line-of-sight exactly when they need their product, making their brand positioning timely and relevant.  Not only that, the opportunity for recurring purchases and purchase frequency increases exponentially.  Think of how many times you have been in the detergent aisle standing in front of the Tide brand, only to purchase Downy or the store brand because of price.  This will no longer happen with Dash, as brand loyalty will be somewhat forced (at least initially with limited brand availability) and with the omission of a price display on the device.  Satisfying consumers’ increased need for immediate gratification, Dash will reduce purchase friction and begin to psychologically transform the mindset of consumer expectations, almost putting other brands who are not using Dash at a disadvantage.

As for Amazon, they are once again breaching new territory by converging omni-channel marketing and omni-channel commerce while leveraging big data to learn customer behavior in near real time, in the physical world with a direct call-to-action.  They will now have data on purchase intent, frequency, location and more, further developing their machine-learning and catering to the ever more discerning consumer.   Amazon is disrupting established distribution channels and transforming age-old business models at a pace that most retailers and brands cannot keep up with.  In the age of instant gratification, there will be winners and losers. The winners will be the companies that can remain agile enough to make swift decisions and deal with consequences later, those that don’t make the move will lose.

The Dash may be a win-win-win scenario between Amazon, brands and consumers like Jack and the beginning of an integrated in home smart-commerce consumer revolution.