Amazon's new Dash button could have a huge impact on the retail order fulfillment process, with potential rippling effects up the supply chain.
I was driving up to Lehigh University the other day to teach and heard on the radio that Amazon had come up with a “Jetsons-like” Dash button that allows the consumer to order products automatically, not at a store or website, but at the actual point of use in the home (e.g., a laundry detergent “dash” button by the clothes washer). Kind of a “kanban” for the home (where, as we know, most household forecasting and re-ordering is done either via a grocery list or memory, as in my case!).
Most of us know that Amazon is always thinking out-of-the-box for ways to offer faster and more efficient service to its customers using everything from its “flow meister” warehouse management software to the use of drones for product delivery. But this idea (and it is more than an idea) may eventually have a huge impact on the retail order fulfillment process with potential rippling effects up the supply chain.
For example, think about the potential for improved forecast accuracy for not only retailers but manufacturers and distributors as now, in addition to having individual store data such as point-of-sale (POS) and inventory-level information, they would have visibility into what is going on in the actual customer household, demand- and inventory-wise.
So what is the Dash button? According to the article:
“Dash is a small oval electronic device about the size of a pack of gum. Each one comes emblazoned with the name of a different, frequently used-up, product.
Press the button and the device uses Wi-Fi to send a message to your Amazon account, automatically ordering a new stock of whatever you’re about to run out of.
The buttons mount using an adhesive strip on the back or a plastic clip.
You can set the buttons via Amazon’s mobile shopping app and assign the specific products and amounts you want from each click.
That click also sends a message to your phone, giving you a 30-minute window to cancel.”
This puts added pressure on retailers, especially grocers who have very small profit margins (1-2%), forcing them to concentrate not only their own internal efficiencies using tools such as lean techniques, omni-channel distribution, etc., but also brings new reach to the concept of focusing on value to the customer and eliminating waste, not only in the business environment, but now at the actual home of the consumer.