Alexa Takes a Step into Consumers Wallets

Amazon took an important step this week in the product lifecycle of its Alexa services by introducing a few new monetization opportunities for developers. Previously, the only way a developer or brand could make money off of an Alexa skill was through Amazon’s Developer Rewards program or by account linking a skill to an existing business model.

The new offerings fall into two categories, In-Skill purchasing and Amazon Pay for Alexa Skills.  In-Skill purchasing is comprised of either a one time purchase or a subscription based purchase, allowing users to acquire premium content or digital subscriptions within various skills.  The Jeopardy! skill is one of the first to be able to test this functionality out, and will offer a subscription service that will double the amount of playable content for users. As a plus for Prime members, Amazon has hinted that many of these services may be free or discounted for that group, with the company making up the difference to developers.

The second offering is the ability for users to pay for goods and services using Amazon Pay in Alexa skills. Previously, these types of purchases required account linking and in most cases, users would have had to make the final purchase on a physical device. Using Amazon Pay, developers will now be able to seamlessly offer options for consumers that could be completed with their previously saved Amazon Pay credentials. One of the first brands to be able to test this out is TGI Fridays, allowing customers to order ahead using only their voice.

Implications

Moving forward, Amazon has laid out four foundational principles that will guide its approach to monetization. The experiences needs to be voice fist, they need to encourage and reward high-quality, engaging skills, the purchasing process needs to familiar and relevant to both parties, and customer trust will remain their top priority.

For brands, these monetization guidelines offer a new way to justify the upfront cost of a skill, as well as increase the importance of having one in the first place. As consumers become accustomed to new purchasing behavior, we’ll begin to see an increase in trust and willingness to convert through these devices. Brands should still look first to offer a form of utility through these services, with monetary incentives being complimentary.

However, the fact that purchasable products and services have now moved beyond the realm of Prime products, will mean that more third parties can now get in on the action – paving the way for entirely new use cases within the Alexa ecosystem.

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