Amazon takes the next step in CPG auto-replenishment
Since the debut of the Dash button, it’s been clear that Amazon is trying to find ways to make itself a necessary channel between wired consumers and CPG brands. Recently, however, Amazon may have found the way to pull customers into its replenishment ecosystem without requiring that they press a button. Some companies are rolling out connected devices that auto-replenish their necessary CPG components through Amazon when a customer runs out.
A Brother printer that automatically orders replacement ink or toner, a blood glucose meter that automatically orders test strips, and a GE washer that automatically orders detergent when low were slated for release by late January, according to Twice. In late February, Brita released a Wi-Fi-enabled filtering water pitcher that automatically replenishes filters through Amazon when 40 gallons of water have passed through it, according to The Verge.
Buttonless replenishment built into IoT devices may be a better bet for Amazon than the Dash button. Though Amazon has revealed no official numbers on consumer adoption, response to Dash buttons in the media have been mixed. Called a “gimmick” by outlets such as VentureBeat, a main criticism is that the buttons lock the customer into buying one brand. In the case of automated ordering for water filters, customers may be less concerned about brand and may be more content to have the ordering take place in the background.
Automation by device and by button are not the only two modes of CPG replenishment that Amazon has been exploring. A study by 1010data found that Amazon’s Subscribe and Save program, which allows users to set up regular recurring orders of CPG products, drove CPG e-commerce growth by more than 20 percent in 2015.
Other CPG manufacturers have been getting involved with Amazon to varying degrees to take advantage of the e-tailer’s growing presence in smart homes. In October 2015, for instance, Campbell created an Amazon Echo “skill” (the term for functions on Amazon Echo) that allows users to automatically receive recipes that include Campbell Soup as an ingredient, according to Ad Age. At the AWS re:Invent conference, Campbell showed off a version of the Echo featuring the company branding.
- Amazon Begins Auto Replenishment Via Dash-Connected Devices – TWICE
- Amazon and Brita team up for Wi-Fi water pitchers – The Verge
- Hands-on with the Dash Button, Amazon’s $5 gimmick that only knows how to buy one thing – VentureBeat
- Will an Amazon private label diaper prosper under a new name? – RetailWire
- Campbell’s Ready to Serve Recipe Ideas Through Amazon Echo – Advertising Age
DISCUSSION QUESTIONS: Will smart devices featuring automated ordering make Amazon more central to home and office CPG replenishment? What possible downsides are there to this automated replenishment model?