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Connected Homes August 2015 Viewpoints

Technology Analyst: Kyle M. Whitman

Amazon Dash Button

Why is this topic significant?

Amazon.com now offers button devices that household members can press to order specific items. The buttons' narrow scope of use will likely limit their acceptance. But the device embodies some novel technology, business-model, and user-experience concepts that might evolve to affect future connected-home ecosystems.

Description

A Dash Button, which Amazon.com sells for some $5, is about the size of a business card and comes with a double-sided adhesive for mounting on an appliance or other household surface. An internal AAA-size lithium battery powers the device's Wi-Fi radio, microcontroller, and microphone, the last of which aids in configuring the device for first use. The device has a single button and a brand logo, which represents a specific product that a user orders by pressing the button.

A user needs to be a member of Amazon Prime, a $99/year service that confers benefits including free two-day shipping for many items (some markets have same-day delivery available). The member installs the button by launching a smartphone application that uses a series of high-pitch tones to communicate with the button to cause it to enter setup mode, whereupon the application connects to the button's Wi-Fi hardware directly and completes the configuration, associating the button with both the household's Wi-Fi network and the appropriate Amazon account.

Thereafter, pressing the button will initiate an order for the associated item (for example, laundry detergent or baby formula) for delivery to the home. Account holders can use a smartphone to configure the quantities of each item that a press of each button will order, can receive alerts when they place orders, and can modify a "cool-down" period that ignores additional triggers from a specific Dash Button until certain conditions are met. Apparently, some buttons let an account holder specify one of a range of products within a subbrand (such as sunscreen lotion or night cream).

Implications

Amazon's business model for its Dash Buttons involves subsidizing the devices and aiming to profit by boosting sales, memberships, and—possibly—promotional arrangements with brand partners. But enthusiasts have already begun repurposing Amazon Dash buttons as home-automation controllers. The hardware inside each Dash Button is more capable than that in many other, more costly dedicated home-automation controllers, as evidenced by a teardown published by independent researcher Matthew Petroff.

Impacts/Disruptions

In an ideal outcome for Amazon, Dash Buttons would become a preferred means to order many common items, thus strengthening Amazon's position in the connected home. But success appears unlikely at present. Dash Buttons offer a relatively limited value proposition because they currently work with only a narrow range of products. The price for the logo-emblazoned devices, though low, might appeal mainly to brand loyalists. And as is often the case with home-automation solutions, users must have some technical acumen to be able to set up Dash Buttons before using them. Amazon might have a better chance of success if it expands ability to configure devices online, distributes devices free of charge to Prime members, allows use by nonmembers, supports speech and bar-code inputs (the company has been testing devices with such capabilities), and sells advertising space on various other categories of discounted merchandise.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now

Opportunitites in the following industry areas:

Home automation, home networking, broadband connectivity, mobile integration, retail, logistics, wireless connectivity, embedded devices

Relevant to the following Explorer Technology Areas:

Connected-Home Retail

Why is this topic significant?

Several major North American retailers have recently begun featuring a variety of connected-home products in large in-store display spaces, some of which have dedicated staff. Such displays could help demonstrate the value proposition of home-automation, multiroom audio, and other solutions for the connected home.

Description

Perhaps the largest connected-home showroom to have emerged recently is the one in the San Bruno, California, Sears store, which features some 4,000 square feet of retail space dedicated to connected-home gear. Sears partitioned the space into a series of stylized "rooms" that resemble areas within an upscale US suburban single-family home. Each room has furnishings and other trappings that are appropriate to its function and integrates displays of connected-home solutions that are appropriate to the space. For example, a laundry-room display features a smart washer and dryer, and a nursery display has various network-connected baby monitors, smart outlets, and smart-lighting solutions distributed around the "room." Sears is reportedly staffing the connected-home display with knowledgeable people who can explain the various devices and help guide users in selecting and installing products that work together to meet their needs.

Other major North American retail chains that have been adding large dedicated connected-home displays include Target (which has recently opened an experimental home-automation boutique store in San Francisco, California), Walmart (which began adding home-automation displays to 1,700 of its more than 11,000 stores in 2014), Home Depot (which has prominently featured Wink home-automation gear since 2014), Lowes (which offers its own line of home-automation products), and Staples (which also offers its own product line).

Implications

It is not a new practice for retailers to dedicate space to connected-home equipment. Many ordinary appliances, televisions, audio systems, and other common devices now have network-connectivity features, and retailers have commonly highlighted such items and have trained sales staff to tout their benefits. But the recent North American development is nevertheless distinct. Instead of displaying disparate sets of home-automation peripherals, smart appliances, and networked entertainment electronics scattered about a store, retailers are showing how various devices can integrate within a home. Such integration is an important part of the value proposition for many connected-home applications (particularly home automation). The Sears approach to selling connected-home equipment is especially compelling—not just because of its integration but also because the retail space exists within the department store itself (instead of being in a dedicated boutique store, such as Target's experiment).

Impacts/Disruptions

Unfortunately, the Sears execution of its connected-home sales concept does not live up to the concept's potential. During a recent visit to the San Bruno store, I found that the various displays tended to be mostly noninteractive. Most "rooms" consisted mainly of appropriate furnishings and wallpaper accompanying static shelf displays of various products, many of which were the same from one room to another. I also found the sales staff to be not especially knowledgeable, and I sensed that little support would be available from Sears if I ran into difficulty in installing devices and making them work together (which is a virtual certainty with home-automation gear). One hopes that other retailers will emulate and improve on the Sears concept.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now

Opportunitites in the following industry areas:

Home automation, home networks, home entertainment, home health care, broadband connectivity

Relevant to the following Explorer Technology Areas: