Can Walmart dash past Amazon with its own product replenishment system?

Discussion
Source: U.S. Patent and Trademark Office - Patent #: US20170124633
May 08, 2017
Tom Ryan

Moving a step beyond Amazon.com’s Dash button, Walmart is seeking to patent a delivery system that automatically reorders items when they run out.

Walmart’s system would place an internet-connected tag that makes use of RFID, Bluetooth, NFC or some other technology on products to monitor usage. Once an item is close to empty or worn out, a replenishment, replacement or upgrade would be automatically ordered.

“For example,” the patent states, “a user may pick up a toothbrush and place it back down, suggesting the use of the toothbrush, and from the servings of a tube of toothpaste, the system can deduce how much toothpaste is left and when it should be refilled. In another example, the system can monitor clothes entering a washing machine, and from this information the predicted durability of replacement needed on each article of clothing may be determined.”

Consumers would place readers in their homes to track the tags, such as one in a refrigerator for reading tags on food items or one on a washer or closet for reading tags on clothes.

Beyond auto-replenishment, the systems would gather usage data such as how frequently a product is used, what time of day it is used, and where it is located in the house. The data could be used to assist with personalized advertising, predictive demand management, and customer profiling for market segmentation needs, the patent states.

The data access might also provide cross-selling opportunities. In another example, Walmart notes that timely suggestions for cookies and chocolate syrup could be triggered by milk usage information.

The system appears to be an upgrade to Amazon’s Dash, which lets consumers press a button to replenish an order of a specific item. Launched two years ago, Dash has now partnered with well over 300 brands, including last week’s addition of Calvin Klein underwear.

DISCUSSION QUESTIONS: Do you see a big opportunity in merging IoT and home replenishment? Which aspects of Walmart’s patent do you think consumers will find appealing and/or concerning?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I prefer the opportunity to look for variety in products and brands that comes from the ability to do it myself."
"This is another step closer to our Star Trek future where we talk to a computer and automatically have just about whatever we want..."
"If I have to place “readers” around my home and have automatic charges debited from my account, there had better be a darn good incentive."

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35 Comments on "Can Walmart dash past Amazon with its own product replenishment system?"


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Mark Ryski
BrainTrust

While I do see certain applications for IoT replenishment, having my toothpaste monitored is a little too “George Jetson” for me and probably most people. The IoT juggernaut is in full motion, but I think home replenishment will be a slower build-up and likely not part of mainstream life for many years to come.

Phil Masiello
BrainTrust

In theory these are all great concepts. In actuality you have to get the customer to reach out and use the system. Technology and AI are great tools. But if the consumers don’t embrace them and value them, then they aren’t valuable.

It will be difficult for any company, no matter how big, to break the bond Amazon has built with its customers.

Keith Anderson
BrainTrust

This sounds similar to Amazon’s Dash Replenishment Service (DRS) which also directly integrates with appliances like water filters, washing machines and coffee makers.

It’s clear that competition has transcended individual items and transactions, establishing membership, replenishment and ecosystem integration as new frontiers for competition.

Amazon’s DRS, patent filings like these and even Whirlpool’s intent to acquire Yummly (a personalized recipe recommendation service) suggest that the supply side of the industry is ready to invest, but I expect at least a few years of experimentation and iteration before services like these become widely adopted.

Anne Howe
Guest

This is a bit too invasive for me. I prefer the opportunity to look for variety in products and brands that comes from the ability to do it myself. But then again, I’m no longer a time-starved, full-time working parent of three kids!

Tom Erskine
BrainTrust
3 years 5 months ago

The Chips Ahoy just show up because my 10 year old ate them all? A new pair of jeans just appears because I’ve worn my old ones too many days in a row? While IoT and home replenishment show promise, when consumers lose control of the “buy” signal and intent to purchase, things get weird.

Paula Rosenblum
BrainTrust

What could go wrong? I don’t like the Dash buttons (I find them vaguely insulting, actually — even I can remember from the laundry room to my computer that I need some laundry detergent) and I don’t like the idea of auto-replenishment either.

What if I want to change brands? Try something different? Check the current price?

I don’t know … maybe I’m just out of the demographic that thinks this is great. I am happy with various forms of subscription services I can use online and I can adjust them as needed. The rest seems like tech for tech’s sake and a bright shiny object rather than anything particularly useful.

David Dorf
BrainTrust

Home replenishment is absolutely a future direction and Walmart’s solution looks to be superior to Amazon’s, but the simplicity of Dash will likely win this battle. Consumption varies by household, so tuning to accurately predict when a replacement is needed gets complicated. Simply pressing the Dash seems more straightforward and less error-prone.

Home replenishment will be a big deal in the future and the retailers that establish the infrastructure now will benefit most.

Sterling Hawkins
BrainTrust

I give credit to Walmart for thinking ahead as it will be some time before IoT is this integrated into the world. It’s a process that more effectively starts with the manufacturers of more significant items (Brita water filters, etc.) and will work through the long tail of products to potentially include things like toothpaste down the line. Home replenishment is here and in the short term, it’s definitely Amazon that has the upper hand and stronger approach here.

Art Suriano
Guest

With each new technology comes the benefits and the risks. I can see the convenience and many customers loving that and I can also see the risk factor when the customer has an item or items reordered that they didn’t want. So for it to be successful, the customer would have to have the option of canceling an order before it is placed with perhaps a reminder and an easy option to change an item or items before the automatic renewal. Lastly, excessive advertising would be annoying so that too would have to be something the user could control.

Max Goldberg
Guest

Some consumers might enjoy the convenience of this Walmart system, others will be creeped out by its Big Brother-like data gathering. Then there is the accuracy factor. Can a tag really tell how much toothpaste I’m using each time I brush, or how many times underwear can be washed before it wears out? Personally, I think this patent crosses a privacy line that I don’t want to have crossed.

Lyle Bunn (Ph.D. Hon)
Guest

IoT for home replenishment based on deduction offers to leapfrog a scheduled delivery approach, which still has lots of potential market growth. IoT for replenishment has so much more value in other markets that I see home application as being a long way down the list behind office, manufacturing, health care, retail, B2B, utilities, etc. where the cost/benefit proposition is much higher.

Peter Charness
BrainTrust

Eliminating shopping entirely? Be careful what you wish for.

Gene Detroyer
BrainTrust
Do you remember Dick Tracy’s two-way wrist radio and how futuristic that sounded? Did you ever imagine you would be walking around with a computer in your pocket that was hundreds of times more powerful than the computer that took men to the moon? I have learned not to try to predict technology. It comes faster than I could have imagined. I will accept that part of it. So as to the future, I look for trends in consumer behavior. There is clearly a trend that emphasizes ease and convenience. Like I wrote just a few days ago in these discussions, “The real answer is coming in the future. Will consumers be able to purchase their needs without overtly interacting with any retailer or manufacturer? It is all about convenience. That is the trend and technology will only accelerate that trend.” We will reach a future where a consumer will never have to deal with a retailer/manufacturer/supplier to provide their needs. The IoT will provide not only for our needs but what we might want… Read more »
Ken Lonyai
BrainTrust

This is the dream scenario for retailers, solving their marketing, inventory and customer data acquisition problems. I said “dream,” right?

Sure for some people, for some situations and for some products this makes sense. It will not become a widely adopted scenario, it will not have much impact on Walmart’s bottom line and it won’t make much of a dent into Amazon, if any.

It feels kinda-sorta like a shot back at Amazon from Mark Lore saying, “see we can come up with technology too!”

Steve Montgomery
BrainTrust

This IoT application crosses the line and becomes IoP (Invasion of Privacy).

Ron Margulis
BrainTrust

This is another step closer to our Star Trek future where we talk to a computer and automatically have just about whatever we want — a prepared meal, a bicycle seat, etc. — appear in a portal nearby. So yes, I see a big opportunity with IoT in the home replenishment cycle. I see an even bigger and more immediate opportunity with IoT in the manufacturing, store and office replenishment cycles. All those consumable items in the workplace are ripe for a Dash-like button which could be very good or very bad for companies like Staples and Grainger, depending how they play it. It will certainly be interesting to watch.

In the meantime, I’m waiting for Amazon or Walmart to announce that their efforts at teleportation are seeing positive results.

Doug Garnett
BrainTrust
Doug Garnett
President, Protonik
3 years 5 months ago

From everything I can see and read this is a niche service — important to a tiny corner of the market. So answering this question includes pondering whether it’s important that Walmart compete here.

Amazon has used their replenishment service for some brilliant PR (they love programs they can brag about while losing money). But has it mattered in their numbers? Certainly it hasn’t made it possible for them to make money on e-retail. And there’s a weakness in replenishment — it eliminates or reduces the opportunity for shoppers to increase their cart size by shopping.

Maybe Walmart can create more value than Amazon. And perhaps matching capabilities may have a tiny advantage in the tit-for-tat game that is competition. But neither Walmart nor Amazon will be able to make this feature into a significant part of their business.

Susan O'Neal
BrainTrust
3 years 5 months ago

Amazon has changed the game from purchase power (which Walmart dominated with EDLP), to how quickly one can collapse the time between purchase intent and purchase. I think it’s the right context to think about, but the real question is how do consumers want to manage their purchase intent? A variety of factors play into why a consumer may prefer one retailer over another, as evidenced by the fact that 85 percent of consumers still cite supermarkets as the store they shop first and most frequently. Whoever best empowers the consumer to get the best of everything from the retailer they prefer will win — companies like Instacart and Adjoy fit into that category.

Tom Redd
Guest

I think that some of the key items in the kitchen and in home operations fit the IoT model. For instance, soy milk or furnace filters. These are a few areas that are required and solve kitchen screaming and lots of dusting. Walmart — if anyone — is a pro at service-level maintenance. Coop in EMEA/MEE is another shop totally zeroed-in on replenishing and maintaining high service levels. I would put the money on Walmart. This is a normal model and not a brand promotion. It’s not just a toy for adults like Dash or Dud or whatever it is called.

Ryan Mathews
BrainTrust

There is a huge POTENTIAL opportunity in merging their IoT and home replenishment but it is totally dependent on whether or not consumers find value — to themselves — in the service. Nobody really wants to think about buying toothpaste or laundry soap or paper towels or dozens and dozens of other products, so — if a replenishment system really worked — it might be welcomed. However if I move my toothbrush several times a day when I wipe down my bathroom and Walmart ends up sending me dozens of toothbrushes a month as a result, I’m not sure it’s going to work out so well. As to concerns, the temptation is to say privacy but, remember, consumers who are concerned about privacy aren’t going to opt into such a system in the first place, so it’s sort of a moot point.

Shep Hyken
BrainTrust

This is a big opportunity. It is essentially a subscription model based on consumption versus weekly, monthly, etc. I’ve always touted this as an excellent business model. Walmart’s solution (as Amazon’s) makes sense and is easy for the customer to use.

What may concern consumers is how much data on their habits are being picked up by Walmart (and others). The offer is that if you give me your data, we’ll give you a better experience. There are people who will embrace the concept of more personalization and others who will run from it.

Brandon Rael
BrainTrust

It’s very apparent that the IoT revolution is in a parallel race with the progression of artificial intelligence becoming a part of our daily lives. While it’s very welcoming to enjoy all the personalization and curated assortments that surface out of Amazon’s and other e-commerce brands’ use of machine learning and AI, perhaps it is a bit premature in the innovation cycle for IoT to assume complete control of our home goods and hygiene needs.

Theoretically the IoT integration into home replenishment appears to be adding to a far more seamless customer experience. However it will be quite some time before its becomes an intuitive component of how we shop.

Vahe Katros
Guest
Vahe Katros
3 years 5 months ago

“Sure Walmart, you own the technology that makes the product smart and track everything so we can continue to ship soap powder like we did in the 1800s and you can manage and own all the data,” said no CPG company or manufacturer.