Has Amazon Found the SMB Supplies Sweet Spot?
November 27, 2019 | Contributed by: Mike Boland
This is the latest in LSA’s Skate To Where the Puck is Going series. Running semi-weekly, it examines the moves and motivations of tech giants as leading indicators for where markets are moving. Check out the entire series here, and its origin here.
Amazon likes to experiment. Its sometimes-wacky “throw against the wall to see if it sticks” rollouts include Alexa vessels like microwave ovens, and the recent line of wearables we wrote about. The jury is still out on those, but sometimes these experiments have a more decisive finality… such as its Dash buttons.
Meant for consumers and businesses to order and re-order products by pressing a button, these odd little devices didn’t “stick.” But part of this experimental approach is to gather demand signals and pivot accordingly. And that appears to be what Amazon has done with the latest iteration of supply reordering.
This manifests in the new Dash Smart Shelf. With a more enterprise/SMB focus than Dash buttons, these are small platforms that automatically reorder supplies based on weight. They come in three sizes, (7″x7″, 12″x10″ and 18″x13″) all of which are 1-inch tall, thereby creating a mostly unobtrusive footprint.
This also makes them broadly applicable and versatile to everything from disposable coffee cups to office stationery. The proposition is simple and involves minimal friction for SMB adopters. They simply put supplies they want to automatically reorder on top of the device, instead of directly on a fixed surface.
Setup seems simple as well, connecting via built-in WiFi and a small power cord (or four AAA batteries). Then sort of like setting up an Echo speaker, the device is activated using the web or Amazon App. Each shelf is connected to an Amazon Busines account to then set product and reorder preferences.
As intended with Dash buttons — but more automated and SMB friendly — the idea is to reduce friction in supply re-ordering. This could be more of a winning formula, at least when it comes to SMBs, given that time is their scarcest resource. It replaces a rote task with something that’s automated and intelligent.
This also represents an odd but fitting addition to our classification of SMB Saas. This defines the universe of tools that help SMBs operate. That’s everything from “front of the house” marketing and customer acquisition tools, to “back of the house,” operational management (think: payroll).
As its name implies, this usually involves software but can also be hardware-oriented if you consider things like Pitney Bowes postage meters, Square POS hardware or Open Table reservation terminals. The Dash Smart Shelf now joins this hardware genus of the SMB Saas animal kingdom.
This also makes it a bit of a double-edged sword. Hardware is a harder sell (say that 3 times fast), given that it requires implementing atoms rather than bits. But it also can have greater retention and switching costs for the same reasons: it can represent a more invested stake in a given technology.
Making it potentially easier to adopt, this is also Amazon we’re talking about. The whole point of its many hardware products (e.g. echo devices) are a sort of trojan horse to stimulate eCommerce. That vested interest translates to subsidized hardware costs and generally lowering barriers as much as it can.
It’s not clear how it will incentivize SMBs to adopt the Smart Shelf in this way, but it will likely invest in marketing and distribution. We’ll watch carefully for signs of such approaches, as well as the market reception to these odd little office fixtures. They check some of the boxes to potentially resonate with SMBs.
As for rollout, the Dash Smart Shelf isn’t openly available yet. Amazon says it will work with select SMBs in a trial period throughout November and December. The plan is to then roll it out widely at the beginning of the year to Amazon Business accounts with a registered U.S. business license.
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