Amazon’s Dash buttons are a cool idea. Amazon’s same-day delivery is convenient. We are on our way to never running out of everyday household items. Soon, the last-minute trips to the supermarket to get toilet paper, shampoo and beer may be a thing of the past. I am very much looking forward to this eventuality. Getting the reorder signal to Amazon still needs improvement. I have an idea for that.
When RFID was all the rage a decade ago, we were promised a world where all our items would be easily tracked. That has yet to happen, but RFID asset tags, with a price of 7 to 15 cents per tag, are nearing a price point where this can finally happen.
The cost of RFID readers are still pricey, with most costing hundreds of dollars or more, but a motivated champion of the technology could figure a way to subsidize the hardware costs to gain customer lock-in.
Amazon RFID reorder concept
Here’s how it might work.
- RFID IN. A house might have an RFID reader residing on a countertop space, and maybe a floor unit for heavier items. As the products are brought into the house, the customer would set the groceries and packages on the countertop or near the floor reader where the RFID tags would be inventoried.
2. The reader would communicate with Amazon over the home’s Wi-fi network. Amazon would build a favorites list based on the scanned items. For certain items that are reorder friendly, such as soap, shampoo, dish-washing liquid, paper towels, and napkins, Amazon may have these items toggled to auto-reorder status. The customer would be able to change a product’s “reorder” status to “auto”, “alert”, or “off”. In the “alert” status, the order would trigger a reorder request, but would require the customer to confirm the reorder. An “auto-reorder” would post with or without the customer’s explicit confirmation. The customer would get an alert allowing them to modify or cancel the reorder, but would place if a time-out expired first. See the screen shot in Figure 1 below.
3. RFID OUT. The same RFID scanners used to check in the home inventory could be used to check-out the used items. This would be similar to how you check in and check out materials at a library. As well, trash and recycling bins could be equipped with RFID readers to track the outgoing RFID tags. A possible setup would be to attach an RFID scanner to a trash can lid. Since RFID tags are uniquely serialized, more than one RFID scanner can work together without having to worry about duplicate data.
4. As the items are checked out, the reorder process “auto” or “alert” would be triggered if the home inventory on the item falls below the item’s “reorder threshold”. For example, if a 24-pack of toilet paper had 4 tags (1 per 6-pack), then the threshold might be set to 1. As the home’s inventory on the toilet paper reaches this threshold, the reorder process would trigger for the item.
5. An alert would be sent to the email and via the Amazon app to alert the customer that a reorder will take place unless they choose to cancel the item for reorder. If the order requires explicit customer approval (“alert” setting), the customer will be asked to approve the reorder. The item will be in pending status until the customer either rejects or approves the item for reorder.
How will product manufacturers affix RFID tags?
Let’s review how the reorder process might work for a few different products.
Paper towels, toilet paper, and AA batteries.
Let’s say that you have purchase a 12-pack of toilet paper. The manufacturer could wrap 6-rolls in a packaging wrapper with a RFID tag. This means that the 12-pack would have 2 RFID asset tags.
As Amazon realizes that the number of Cottenelle toilet paper has dropped from 2 to 1 asset tags, that would trigger an automated reorder event for this product. If the package had 24 rolls, there might be 4 asset tags.
The harder one is milk. RFID signals have technical issues with liquids, signal absorption, and metallic surfaces, signal reflection. In order for this to work correctly, the tag would have to take into account the water content of the carton. Also, the reorder for the milk would ideally be triggered as the contents reach a critically low level, not after the carton is discarded. The packaging could guide the customer with a note that “for RFID reorder, check-out this tag”. The item could be scanned as it runs low, or if the tag is removable, the customer could remove and scan the tag. As Amazon recognizes that the milk tag has been scanned by the RFID out scanner (in step 3 above), a reorder request for milk would be initiated. Unlike the non-perishable goods, milk and other such products would require customer approval, “alert” reorder setting, of the order, and the customer would need to set the delivery request time so the product is not left out to spoil.
Products must talk, and the network must listen…economically
Unlike other near-field communications, notably Blue-Tooth, RFID tags do not require power. This makes RFID tags affordable and reliable.
For real-time product inventory to become a reality for households, RFID tags will need to become as ubiquitous as UPC bar-codes. Manufacturers will be reluctant to add these tags unless prices drop further. The game changer could be Amazon. Amazon could come up with a subsidized method to get RFID scanners into a customer’s house. As enough customers begin to enjoy the convenience of automated reorders, the customer’s will expect leading product manufacturers to provide RFID tags for their products. The manufacturers can benefit from a faster reorder cycle and product lock-in, and will then have the appropriate incentive to add the tags to their most popular products.
Optimizing for delivery
In order to reduce the number of packages and deliveries, the system could batch orders together. Product reorders may be triggered and fulfilled on certain days of the week in order to achieve this batching function.
Subscription costs and order minimums
In order to subsidize the RFID scanner costs, Amazon might charge the user a “Prime Reorder” subscription fee of $9.99 a month. Amazon would send the customer a reorder kit with some basic setup instructions, including how to attach to the home’s wi-fi. Delivery fees and minimum orders could be set to make the service economically viable for Amazon, while still being attractive for the customer.
Amazon could also incentivize customers to push a high volume of reorders to Amazon. They could waive the monthly subscription fee if a customer were ordering enough volume through the service.
Walmart or Google Express can also deliver this experience. However, the adoption rates and economics would be more challenging for these players. Amazon has a tremendous lead in e-commerce. They have proven adept at leveraging their strength to quickly build audiences for many of their more innovative programs. No easy feat as those in the e-commerce business soon discover.
