Tuesday, July 28, 2015

Amazon Dash - A specialized device for strategy business advantage

7/28/2015 11:48:00 PM

I was discussing technologies trends with a few friends. They see the trends going in two major directions:
  1. The Internet of Things Trend: Lots of connected and specialized devices.
  2. The Do-It-All Smartphone Trend: One device with lots of apps do everything and anything.
Of course, both directions are correct. The Do-It-All device trend is obvious. Nobody really reject a super do-it-all device, that is, if it is easy enough to be used. What's interesting is the Internet of Things trend. While my friends debate and try to win their argument, I think the case is just simple: there are tasks so repetitive and frequently performed that they demand specialized device.

From a entrepreneur viewpoint, the key question is about Investment Justification to develop such device. This is especially true because we are talking about hardware products with major cost in the initial prototype development and manufacturing and distribution cost. Success and Failure both get amplified when it comes to hardware devices.

For example, the Amazon Dash is such a device. It is specialized ordering device to be used at home for "Repeat Consumable Shopping". It scans the product's bar code and listen to the users' voice recording of the product. (I believe the voice recording is some form of proof for the order instead of used as voice recognition for order processing).

The device would be great tool for a housewife order glossary through the device. Since we are talking about repetitive purchase and long term relationship with the consumer, it means the revenue generated from such device overtime can accumulate to quite a bit of money for Amazon. To the consumer, the device means taking away the boring task of marking the shopping list. Since such order "planning" stage mostly happen in the kitchen, it would be easy to put the Amazon Dash on the kitchen table or somewhere easy to access. All these conditions make up a good case for a specialized device. At the end it justify for Amazon to take the risk to build this device.

As a digital marketer, I believe that the device has a highly strategic role: it builds a strong hardware based customer lock in. Customers get use to the device and probably don't want to switch as long as Amazon deliver good services, products and good price. And the experience of using the device is already a good start of a sophisticated services cycle. The ordering process efficiency gained will enable Amazon to cut cost and deliver competitive pricing to customers. The physical existence of the device also reminds customer the great Amazon brand and, hack, a great free advertising for the friends and visitors to see and get aspired!

I have never used Amazon Dash cause I live in Hong Kong so I cannot tell you from my own experience. However, the device is a good case study for entrepreneur business planning!