Well, this is sure to be an upset to the market. Amazon is going to allow developers the ability to offer in-app purchases to consumers for physical items that will be shipped to their homes. It's a little unclear yet if it will be limited to developers with products already on Amazon's website, or if Amazon will merely facilitate the transfer of shipping information. Could developers include in-app purchases of a physical product that they will handle distribution of themselves? That could be a huge boon for independent merchandise sellers, but obviously carries with it some inherent complications.
One of the first partners to offer products will be Activision, selling Skylanders characters. If you've never heard of Skylanders, here's how it works: if you're a parent, you spend money on plastic figurines for your kids to use on that new game that kind of has something to do with Spyro, I think? And if you're a child (or an adult collector), you explore a brand new world where DLC moves into the realm of physical products. From that perspective, Skylanders are the perfect product to introduce these new physical product in-app purchases.
It's also unclear just how this will affect app compatibility with the Play Store (and any other Android stores). Obviously, Amazon can't add low-level APIs to Android as a platform. This feature will only be available by within the Amazon Appstore. However, that means that developers will have to code for Amazon devices separately. It's not a huge problem just yet, but it does mean that Amazon apps can now have features that Play Store apps cannot. And on a key revenue-generating feature, no less. Obviously Amazon wants to differentiate its own products. How this will affect the consumer experience, though, is yet to be seen. Play Store users already face competition with other mobile platforms for developer attention. This could make that push even fiercer, for better or worse.