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August 27th, 2013 
Peter Nolan 
Amazon’s Kindle Fire.
(Credit:
Josh Miller/CNET)
Your favorite dessert app just surfaced a sure-fire cronut recipe, but your in-laws never returned your trusty mixer. But if you got that app via Amazon, you may be able to quickly purchase a new mixer within the app before you start cooking.
Sorry, it probably can’t help you with your in-laws.
Amazon Appstore Director Aaron Rubenson.
(Credit:
Amazon)
Amazon announced Tuesday that users can now buy physical products through
Android apps with the retail giant’s 1-click purchase feature. And the e-commerce kingpin is hoping it will encourage you to buy more and buy often.
“If it’s an app that reviews new books, new reading materials, and you think, ‘OK, great, I was looking for something for my vacation,’ you might just pull the trigger without thinking about it too much,” Appstore Director Aaron Rubenson told CNET.
But first, the big push will be in the developer community. Amazon wants app makers to incorporate the new feature, using the new Amazon Mobile Associates program to offer real world items to users, and earn between 4 percent and 6 percent per sale.
In the last year, Amazon has ramped up its efforts to attract more developers to its Appstore ecosystem, which currently has 100,000 apps. With competitors like Google and Apple boasting at least 1 million and 900,000 apps in their respective stores, Amazon wants to give developers incentives — including HTML5 Web app support and an Amazon Coins giveaway — to develop for it as well.
But Amazon isn’t afraid of its competition as long as shoppers continue to spend money on its site. The new in-app purchasing feature is available for any type of app in the Amazon Appstore or Google Play.
This is a good deal for app creators, especially since many apps are free and rely on in-app purchases and advertising to make money. Developers typically earn 70 percent of in-app purchases on digital goods, which obviously cost much less than physical products. With the new mobile associations program, a developer would need to sell goods that cost $12 or more to make more money than they normally would, according to Amazon, which has 200 million active customer accounts.
It’s a form of cross promotion, when a company advertises a product within another product, but with an arsenal of real life goods behind it. Apps are suppose to offer only relevant products.
For example, those looking at a recipe app may see offers for cooking utensils. Developers can also showcase a category of items or bundle a physical purchase with a digital one. One of the companies Amazon partnered with to test this new feature is Days of Wonder, a creator of board games. The company can advertise the board game Ticket to Ride from the within the Ticket to Ride app. On the flip side, if people buy the physical board game on Amazon.com, Amazon will prompt them to purchase the app as well.
Rubenson said that the company is “uniquely positioned” to offer this service because of the services it already provides globally through Amazon.com and through the app store and
Kindle Fire.
He spoke more with CNET about why Amazon thinks users will use apps more as a result of this new feature, and why it doesn’t matter that Amazon has less apps than as its competitors.
Q: How will the in-app purchase of physical goods work for the consumer?
It’s going to be very simple, very convenient, very straightforward for consumers. They’ll be inside an app or a game looking at at some contextually relevant information. For example, one of these apps that we have this integrated in is called Baby Bump by Alt12. It’s an app that has information about pregnancy, and can track your pregnancy. And inside the app, the developer has chosen to merchandise products that are helpful both during the pregnancy period and after the baby is born. In another example, in a recipe app, you might see pots or pans, spatulas or woks that are right for the recipe. If the customer decides to purchase one of these things from the app, they get a pop up that starts up inside the app and complete the purchase using regular Amazon 1-click. From that point, it becomes a regular Amazon.com order.
Q: Why would consumers want to do this? How does it make them want to use an app more?
The notion is that by being able to offer both digital and physical items in our catalog, that should create a more compelling experience. As a consumer, you might be able to say, “Wow, not only did I learn about the recipe, but I was able to browse the utensils, aids I was going to need, to make the product and overall that was a more satisfying experience for the consumer — I’m going to use that app again.”
Q: Are they going to want to buy something physical that will probably cost more than the digital in-app purchases they are used to making?
Frankly, its going to vary quite dramatically depending on the type of product.
If it’s a book or MP3 track, I actually think it could be a fairly low-consideration purchase [meaning shoppers won’t spend as much time thinking about whether or not they want to buy it] … If it’s an app — and I don’t know if one exists like this — that reviews flat-panel televisions over 45 inches, that’s a much higher-consideration purchase. I think that’s part of what’s exciting here is that this is a new paradigm and it’s opening up the ability for developers to see what is going to delight their customers. And they, and we, are going to learn as we move forward here.
Q: It may be an easy transition for customers to buy physical goods that are more in line with digital products, like media, but what about other items? Is out going to overwhelm customers to have these other choices?
Just like the in-app digital purchases technology, developers are going to have to exercise good judgement in how and when they choose to present offers to consumers. Just as with in-app purchases for digital goods, which has been around long time, if an app or a game bombards consumers with purchases advertisements and the game feels more like a vending machine versus a game, consumers aren’t going to like it. There definitely are developers who have made that mistake in the past. I think as a community, developers have gotten fairly sophisticated now about how to target consumers so they’re putting the right offer in front of the right customer, and when to make the offer and when they need to remind them about purchasing. Developers are going to need to take that same judgement and sophistication over into this space to make sure that customers aren’t annoyed.
Q: The Appstore is playing catc- up with companies like Google and Apple in terms of the number of apps available for download. Why are you not concerned about this?
We’re making tremendous progress in selection — we’re up over 100,000 apps in the Appstore, so compared to the figures we’ve shared in the past, the growth has been tremendous. If you look at the top 100 apps in Google Play, we have about 70 of them — the games that are really important to consumers. We’ve taken a slightly different path with a store, in that we test our apps before they go in the stores. We want to make sure they’re safe. Increasingly, we have this rich array of services that helps developers make the in-app purchases in our store better. That’s exciting.
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