When people think of the Internet of Things (IoT), their minds tend to focus on fancy applications like home control and remote security.
Some of us use things like smart thermostats or lightbulbs controlled by apps, but for many, the IoT seems like something from the future. In reality, the future is now and Amazon.com (NASDAQ:AMZN) has quietly brought the IoT into people's homes with its unassuming Dash buttons.
These simple Wi-Fi devices carry the logo of the product they are tied to. It's a one-button ordering system that seems a bit like magic when you actually use it. The Dash program may not be as flashy as other IoT efforts, but it's practical, easy to use, and it's working. Because of that, Amazon intends to widely expand Dash, adding more products and rolling it out in more countries.
What is Amazon doing with Dash?
Dash is a small button that consumers program to perform a simple action related to ordering a product. For example, you can hang a Dash button next to your washing machine for Tide pods, which you set to order a specific quantity when you push the button. The Amazon system prevents a second order from being placed before the first is filled so consumers won't end up with more product than they need.
It's a simple proposition and Amazon said in a press release that use is increasing among Amazon Prime members. Because of the popularity, the company has added more than 60 new brands to the program including Bai, Cheez-It, Folgers, Fresh Kitty, Meow Mix, Milk Bone, PoopBags, Pop-Tarts, Powerade, Purell Hand Sanitizing Wipes, ZonePerfect, and many more, bringing the total to over 200.
"We're thrilled to see more and more Prime members experiencing the convenience of Dash Button and restocking their everyday essentials with a simple press of a button -- from toilet paper to coffee and dish soap to snacks. As a result, we're seeing exponential growth for the program and orders increased over 5x in the last year," said Dash Director Daniel Rausch.
The Dash program has also been expanded internationally. In August, it launched in Austria, Germany, and the United Kingdom, with Amazon saying most buttons sold out immediately. Buttons cost $4.99, but come with a $4.99 coupon for the first order. It's an idea that has worked partly because it solves a need while requiring very little effort, benefitting consumers and vendors equally.
"Customers never want to reach for a new trash bag and find out the box is empty -- with Dash Button, we're helping ensure our customers never go through that dreaded moment," said Brandi Pitts, head of e-commerce at Reynolds Consumer Products, in the Amazon press release. "And the program has been so successful that for some of our products, orders via Dash Button for Hefty now occur more often than orders on the Amazon.com website."
Amazon is very clever
While Dash serves a consumer need via IoT, it also serves Amazon by bringing it orders for items that consumers may have previously purchased from grocery stores. Whether it's dishwashing liquid or toilet paper, the online retailer has made it easier to use its button than go to the store and has cut out any price comparisons.
The company has made it possible to replenish staples before you run out. That should shift some business to Amazon that it used to lose out on while also delivering a positive consumer experience. Dash buttons equal recurring sales for Amazon and convenience for consumers. That may not be a flashy use of IoT, but it's a very practical and smart implementation of the technology.
Daniel Kline has no position in any stocks mentioned. He will not be dressing up as a clown this Halloween. The Motley Fool owns shares of and recommends Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.