Why procurement can’t afford to ignore Amazon Dash
Introduced a year ago, the Amazon Dash Button is a small wireless-enabled device that is programmed to order one specific item through the buyer’s Amazon prime account. The idea behind Amazon Dash is to seamlessly connect the moment and location of a person’s demand with a conveniently executed purchase. The most common applications of the Dash button are to order household consumables such as laundry detergent, batteries, diapers, and pet food.
Just as important as what the Amazon Dash button does is what it doesn’t do. Dash is not for all items. Amazon is bringing brands and items into the program one at a time. Most of the items supported so far are highly consumable products that have regular demand with the sort of consumer that would be open to the idea of Dash. It is not a surprise that college students are a target market for this new ordering channel.
As innovative as the Amazon Dash buttons are, they have also been met with a fair share of skepticism. Forrester Analyst James McQuivey dubbed them ‘The Best Bad Idea of 2015.’ The Mashable team says they are an indication that we’ve achieved a whole new level of laziness and VentureBeat dismissed them altogether as a ‘gimmick.’
Regardless of how you feel about the buttons as a consumer, we can dismiss them as procurement professionals, right? After all, it seems unlikely that there will soon be buttons on the side of printers that can be used to instantly order new toner cartridges.
On the other hand, maybe that is taking too narrow a view of the Amazon Dash value proposition. Is it possible that there is an opportunity for corporate procurement to leverage this technology to manage spend? If nothing else, we owe it to ourselves to take a closer look at the philosophy behind Dash. Amazon didn’t become the top Internet retailer in the world by failing to understand how people want to shop. And now that they are investing in their B2B Amazon Business operation, you can be sure that what they learn in one channel will be explored in the others as well.
I’m not suggesting that procurement should attempt to mirror a model designed for consumers, but our approach to consumable spend could probably use a makeover. Amazon has a natural motive for supporting the Dash – increasing their sales – and that is exactly the opposite of what procurement typically wants. We work to minimize spend and control demand whenever possible. However, if procurement wants to reposition ourselves internally as a strategic resource, this mindset is one that we may need to be willing to change.
Under the right circumstances, procurement should actually encourage people to spend money. We should look at it as subsidizing strategic projects by building rapport with internal stakeholders through the facilitation of transactional buys. Why fight all demand? If people need something to get their job done, procurement shouldn’t make them jump through hoops to order it. As long as we appropriately limit the extent of their freedom, just as Amazon has done with the Dash buttons, encouraging people to spend in small categories just might position procurement as a grounded internal partner with a realistic perception of what is important to the people keeping the operation moving.
Amazon Dash is not going to lead to a significant increase in the company’s sales. But whether people call it a bad idea, a gimmick, or just plain laziness, there is no debating the fact that they brought something new to the market and people are talking about it. Procurement could use a little attention like that – and if we can simultaneously demonstrate that we have new ideas that put our stakeholders first and are willing to act on them – there can only be upside for everyone involved.