E-Commerce: Lifeline or Flatline?
THE PLAYER: AMAZON PRIME, DASH AND OTHER NICHE PLATFORMS
THE GAME: THE ‘MAN’ BEHIND THE CURTAIN
Undoubtedly, Amazon and the overall e-commerce environment has been a game changer for both large and small CPG companies. What lies ahead for the evolving user experience as Amazon and other players recruit new consumers? It might not be far-fetched to one day envision virtual online stores replicating the in-store experience.
Amazon was not available to comment on the so-called “secret sauce” behind its model, interrelationships forged with CPG partners and CPG cost benefits. “Amazon won’t say much: They are pretty opaque about the way they operate,” Bishop says.
But we know CPG companies continue to be motivated by Amazon’s innovation with niche portals, starting with the Amazon Dash Button program, which allows consumers to buy products simply by activating a small button from their home.
Capitalizing on Dash, Hershey’s sales of Ice Breakers on Amazon.com are up 70% year over year, which is growing twice as fast as the U.S. candy, mint and gum category, says Bridget Binning, senior manager, insights driven performance, for Hershey, Pa.-based
Hershey’s. Since 2015, the company has expanded to two more Dash Buttons for Hershey’s Variety Pack and Brookside bars.
“The technology provides an exciting runway for in-home goods replenishment, and we recently announced we have signed on to Amazon’s DRS (Direct Replenishment Service, a program that enables people to select connected devices and automatically reorder consumables when supplies run low—no button activation required). We decided to scale the program based on positive results,” Binning says.
In the meantime, Amazon has branched out in other ways that both retailers and suppliers should watch carefully, from its private-label food brand Wickedly Prime (gourmet popcorn, tortilla chips and almonds) to Amazon Go, a Seattle-based store where customers choose the products they want and walk out the door, no cashier required. Their accounts are billed upon exit thanks to Amazon technology likened to the kind used to pilot self-driving vehicles.
“Amazon Go should be studied by every c-store exec in the industry the moment it opens to the public,” says Anderson of Profitero. “Amazon’s history of pioneering customer-centric shopping experiences is unparalleled: One-click ordering (both online and with physical buy buttons), free shipping, two-day shipping, voice ordering and more.”
Continued: Retailers: Two Can Play At This Game