May 18, 2018
Is the food and beverage sector ready for an automated reordering model?
In 2012, Dollar Shave Club disrupted the shaving market with an innovative distribution model: shipping high-quality razorblades automatically, for the same price as the cheap ones at a brick-and-mortar store.
Thousands of customers have loved Dollar Shave’s model since Day 1 – and Dollar is now the world’s number one online razor company, outstripping titans like Gillette.
But will Dollar’s model work in other fast moving consumer goods (FMCG) industries?
Retailers will put that concept to the test in 2018.
The rise of friction-free shopping
If you haven’t heard the buzzwords “friction-free shopping” and “extreme convenience” yet, take note of them now, because you’ll be seeing a lot of them in 2018.
As Dollar Shave’s success demonstrates, today’s customers gravitate toward the most convenient, automatic – and, yes, even human-interaction-free – shopping experiences they can find:
Millennial shoppers already make a full 54 percent of their purchases online. Cashier-less stores like Amazon Go, which replace checkout lines with automated app-based billing, transfer this frictionless shopping experience into physical stores – with significant success so far.
@DollarShaveClub disrupted the shaving market with an innovative #distribution model: shipping high-quality razorblades as needed. But will Dollar’s #inventory model work in other industries? Tweet This
Meanwhile, voice assistants like Amazon Alexa are shaping new purchase behavior patterns. Instead of running down to the store for goods like toothpaste or paper towels, many consumers are more likely to ask Alexa to order those goods for home delivery.
Now some retailers are taking the next logical step, and letting customers set up “standing orders” for their most-used products. The question is, are consumers ready to take that step?
From online shopping to automated reordering
In light of the initial successes of Alexa and Amazon Go, it’s no surprise that retailers and tech companies are lining up to partner with Amazon on frictionless shopping experiences.
One of the first potential game changers is GE Appliances’ new “connected dryers,” which integrate with Amazon Dash Replenishment to automatically reorder dryer sheets when they’re about to run out.
The food and beverage industry is next. Connected refrigerators like the LG Smart InstaView include touchscreens for reordering groceries from Amazon – and since 2017, Samsung has been hinting at a new fridge that reorders food and drinks automatically.
In short, all the components are there – but one key problem remains:
Smart fridges are not cheap.
With price tags starting at $2,500 minimum, these toys remain far out-of-budget for the average family – and for early adopters in their 20s and 30s.
Without this core support, any aspiring purchase model is dead in the water.
Remember, Dollar Shave didn’t succeed just because it’s convenient, but also because it’s more affordable than buying razors from a brick-and-mortar store.
Millennial consumers don’t shop online just because it’s frictionless, but because Amazon is often much cheaper than a big-box retailer.
Shoppers are investing in voice assistants like Alexa not just because they’re helpful, but also because their prices start at a very reasonable $50.
In other words, convenience is a preference – but affordability is a necessity.
Many consumers dream of fridges that reorders their groceries automatically – there’s no question about that.
But until those fridges become as affordable as Alexa’s speakers and Dollar’s razor packages, they’re going to have a very tough time replicating those companies’ successes.
About the author
Ben Thomas is the Chief Writer and Brand Strategist at Evo, with a core focus on emerging technologies, Big Data, and the Internet of Things (IoT).
He loves to engage audiences about the frontiers of science, culture and technology — and the ways these all come together.