Technology of the week – Amazon Dash and HelloFresh
In our technology of the week project we took a look at two services that target the “modern day’s customer” who demands to get things done fast, with as little trouble as possible, in a convenient and as much as possible fun way.
When watching the commercials (below) of both HelloFresh and Amazon Dash it really stands out much they resonate with what bothers the customer. They build their messages on how they provide solutions to the pains of everyday busy people. Both services aim to make a task that is a regular and time consuming part of everyday life “easy” or “simple” (Their taglines are extremely similar: “Cooking made easy” and “Shopping made simple”)
HelloFresh, a three year old start-up, which currently operates in seven countries (the Netherlands being one of them) promises to give customer everything that they need for a delicious, healthy, home-made dinner except the chef. They create easy step-by-step receipt, select organic, seasonal ingredients from local providers, and send the exact amounts needed from those ingredients for a meal that can be ready in a maximum of 30 minutes. Apart from the convenience piece HelloFresh also builds on the very common desire of today’s customers to eat healthy and on the environmental friendly packaging and recycling trend. They use word of mouth in an extremely smart way by on one hand providing customers and their friends discounts if they start using the service based on recommendation and on the other hand encouraging the users to share their ready meals on social media. HelloFresh operates in a market where the bargaining power of the buyer is high and of the suppliers low, where – the threat of new entrants is high, given the low barriers to entry, and the lack of switching cost, and last, but not least, where the threat of substitutes is also high so the number of competitors is high and that is one of the reasons why they build a loyal community of customers. After certain amount of meals cooked with HelloFresh users get certificates, can attend breakfasts and dinners where they get to know the providers and share their opinion about the receipts and ingredients.
Amazon Dash is the newest innovation of Amazon, it is a wand with which customers can scan the barcode of anything that runs out in their household or simply just say the missing item “into” the device. These orders are automatically recorded in the user’s AmazonFresh account and once the customer clicks approve it is delivered within 24 hours. In very simple words the Dash ’s promise is that you will never run out of morning coffee or toilet paper ever again. When providing this service Amazon builds on it’s reliable brand, extremely streamline processes and more than 20 years experience in online shopping. On the long run Amazon’s goal with the Dash is to completely eliminate brick and mortar stores and moving shopping entirely online.
Despite being quite different at first look the Amazon Dash and HelloFresh target almost the same customer segment, and both the channels in which they reach their users (delivery and online platforms), their key activities (finding and managing suppliers, storing perishable goods, delivering) key resources (drivers, carriers, packaging, IT systems) and basic cost structure are comparable. Even in their value proposition they both aim to create a convenient experience and save time for their customers, their main difference lies in what exact problem they want to solve for their customer: making it possible to cook home healthy food without the hassles around cooking or never running out of the basic groceries and never forgetting anything during shopping again.
Both have a strong market presence but while HelloFresh has many similar competitors, the Dash has no direct competitor currently. Amazon Dash and HelloFresh work with a business to customer model currently and have the potential to expand to the business to business sector. Although the discussed business models are both innovative, have the potential to decrease or almost eliminate the importance of brick and mortar stores and change the relation we have to shopping, the Amazon Dash has potential to do even more than that and disrupt whole sectors in the future.
Authors: Group 15
Ekaterina Marinova – 436554
Anargyros Michaletos – 436750
László Nedeczky – 416837
Lina Nota – 440733
Gabriella Pimpão – 437021