The Amazon announcement that they will be allowing developers to sell physical goods inside of their apps with one click is a clearly “firing one across the bow” of the good ship Apple by creating a point of differentiation on an issue that has frustrated Apple developers.
Late in 2011, Apple released a change to the Apple Developer Terms & Conditions which made the sale of physical goods from within an app an extremely difficult proposition. Where once Apple allowed apps the flexibility of selling physical goods or pushing users to a mobile website from within the app to undertake these actions, the T&C change in 2011 added some extreme limitations to this (which were mostly noticed by this writer when his Audible App for iPhone was hit by these limitations and they aren’t even selling physical goods).
Enough of the rant about Apple but it is great to see that Amazon is embracing one of their clear points of difference between Amazon and Apple, their physical warehouse, and also integrating proven web technology such as the 1-Click Purchasing.
The in-app physical goods purchasing is initially being rolled out within games with Activision’s Skylanders children’s game being the first. Skylanders Cloud Patrol which costs 99 cents to download then sells toys inside the game using Amazon’s 1-Click Purchasing. When players purchase the toy they will also unlock a digital version of the character that can be used immediately with the physical toy showing up in the mail a few days later.
This 3-way integration between physical toy, app and app characters is not only highlighting the Amazon in-app purchase functionality but the appearance of the same toy within the game is also adding an additional layer of functionality that further demonstrates the convergence between mobile and physical.
Activision is not the only app maker that has been able to expand their app business model into a line of physical merchandise. Rovio’s Angry Birds already has products available in major retail outlets and Zynga is working on a deal with Hasbro to develop a wide range of toy and gaming experiences based on FarmVille initially and possibly expanding to include CityVille or Words With Friends in the not too distant future which could see some action figures developed based on some of its in-game characters.
Merchandising around videogames is not new and there was an inevitable spread to mobile apps however while this might be the first step for Amazon, it would be expected that their 1-Click Purchasing and in-app purchases of physical goods should expand to other app categories in the future, thus further integrating Kindle Fire and Android Apps into the Amazon ecosystem.
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10 Comments
Ashley
I understand the frustration here with Apple and the control they are taking with such things as this but really is Google any different? And think of the things that Apple has done that are great like no viruses on the Mac etc. you have to take the bad with the good in these situations. You have done a great job on this post and I hope it helps.
Vernon
I had no idea that you couldn't purchase goods from your cell phone because I never tried it but that is very interesting to say the least. I am amazed at what these services can do these days and I want one but they are still so expensive. When the new Iphone comes out do you suppose that the Iphone 4S will be cheaper?
William
I guess I never tried to find something on my phone to actually buy I am mostly just shopping around when I do that but this is good to know. I will have to put this to the test with Amazon or something because I am curious now if this will work. Thank you so much for the tips you did a great job on this post, keep up the good work.
Marilee
I wonder why Apple would change their terms of use to a policy that limits their revenue. The only reason I can think of that would cause them to make such a change would have to be security issues. It makes sense to sell merchandise that is branded with an app. It can only help to promote the app in what is already a ultra competitive market.
Gussie
This development is very interesting. I think it is a brilliant strategy to use apps as a medium to promote merchandise. I think we are living in the days of commercialization and merchandizing and so this seems like a natural transition or I should say a natural merging of two promotional tools and mobile technology.
Alfred
Based on what I got from this report, one should be able to develop any kind of app and use an Amazon and maybe even other online transaction processors such as Google checkout or PayPal to promote the sale of merchandise as well as services. That sounds to me like a good reason to get into the app development game. I hadn't considered it before, but maybe now I shall.
William
I don't quite get the policy that Amazon had in place before this change towards allowing sellers to hawk merchandise through their mobile apps. I mean, the resellers on their website do it, so why is there even a different policy in place for mobile app resellers? Or am I not understanding this accurately? It doesn't make sense but then again, they must have had their reasons, and not very good ones, apparently.
Angela
Amazon is steadily giving traditional retailers a run for their money with this mobile strategy that puts consumer convenience at the core. Smart brands should look at what the Internet powerhouse is doing to continually take the shopping experience to the next level. Let us see how this new policy winds up in the annals of the next market statistics.
Ulysses
I heard about this and now this article sheds further light on this. Software developers are supposed to be able to create games, sports, weather and other apps that sell products from Amazon, either inside the app or by linking to Amazon's Web store. Unless I'm not imagining the details, I don't see it any different than all the scripts for amazon that you see in regular browsers, except that it's for mobile devices.
Dexter
So as I understand it, Android developers can leverage the Mobile Associates API to integrate Amazon's secure 1-Click purchase experience and Amazon Prime shipping to offer contextually relevant physical products, and they can earn up to 6 percent of revenues on qualifying in-app customer purchases. The piece I read also says developers can also offer a single item from within an app or game, showcase a category of goods, or bundle real - world items with virtual goods.