I was thinking about the Amazon Dash product and trying to unpack what it says about the strategy unfolding in relation to fast delivery services like Amazon Fresh, Google Express, and Instacart.
What’s fascinating about the Amazon Dash product is that it is a test of the limits of convenience around the data entry flow provided by a smartphone vs custom hardware built ‘from the ground up’ around a specific software product. It’s an early data point to the question of whether the future will be a small number of smart thin pieces of glass pushing data to our software, or whether instead we’ll have smart glass for some things, a wand with a big button on it for other things, and other custom hardware for yet other things.
I can’t imagine we'll have splintered hardware for our different use cases of manual data entry because it feels intractably ugly and inconvenient to the consumer. I’m not convinced that what I gain from entering the data with a wand really ‘beats’ the convenience of entering it with my smartphone (especially if that phone has magic native support for it, e.g. Amazon Fire support, where press-button-and-talk-to-order could be supported without having to navigate to an app). Amazon wants to find a way to wrap themselves around the data entry process because it would be an enviable moat against others in the instant-order-at-home business. Convincing a consumer to order and use a new piece of hardware is expensive, and I don't see the value here. But we’ll find out.
An interesting move for Amazon might be to remove the manual part of the data entry. Maybe Amazon could figure out how much stuff I have and order new stuff for me (with some notification so I can cancel when it’s wrong). This would be possible in an ‘information perfect’ environment, so the technical challenges feel much bigger than asking the customer to do it themselves. You’d need a bunch of ‘internet of things’-esque sensors (on the products, in your fridge, in your cupboard) telling you in real time what you have and what you need, or you need very accurate algorithms that can predict, given what you have, what you are likely to consume and how quickly, along with a full understanding of new products entering the home. Or probably some combination of both. Amazon is interestingly positioned as a distributor of these products that they could start slapping RFID or BLE sensors on products going to homes, assuming they could get the costs low enough. This might sound nuts, but when you factor in things like potential optimizations of inventory stocking in localized warehouses to support greater same-day delivery fill rates and the falling cost of active RFID chips it might start to look less crazy. Then we can finally have that smart fridge from the movies, except the intelligence will be located in software instead of the appliance, and our phone would bridge the gap.
The fun part is that as long as these large-scale technology companies are competing I’m sure we’ll continue to see experimentations with new hardware strategies to capture data for new use cases. So far our phones and tablets and computers have done a good enough job of connecting us to our software, and as sensors get cheaper and more ubiquitous they'll get better before getting worse. But we'll see if someone can find the killer use case to buck the trend.