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Amazon's Flow ups its game in price-matching wars

Amazon is taking another swing at brick-and-mortar retailers with an upgrade to its mobile app that makes it easier for consumers to shop in-store, but buy online.

The new feature—called Flow—identifies products by simply waving the phone's camera over multiple items in succession.

Screens of Amazon's Flow app for iOS
Source: iTunes
Screens of Amazon's Flow app for iOS

The products are instantly captured and the app compares prices for the items on Amazon.com and saves the products to a user's shopping list. Users can then also opt to purchase their saved items. For now, Flow is available only on Amazon's iPhone app.

(Read more: Amazon may hike Prime cost, earnings disappoint)

Because Flow makes the shopping experience on Amazon's mobile app much easier, it could help the company gain even more traction in the mobile shopping space, said Carolina Milanesi, strategic insight director for Kantar Worldpanel.

"At the end of the day convenience is going to win for the consumer. If it's easy, a consumer will do it without even thinking about it," Milanesi said. "And the ease that Flow brings to the whole shopping experience will make a difference."

The augmented reality technology isn't entirely new, as the company released a version of Flow in 2011. At the time, users had to snap a picture of individual products to compare prices, but they didn't have the ability to make purchases with the standalone app.

The integration of the technology into Amazon's main mobile app and Flow's upgrade in how it captures product images will likely spur more people to use the company's mobile app and that could translate into more sales, Milanesi said.

Amazon has tinkered with various ways of using mobile to expand its business for sometime.

The company, which already makes e-readers and tablets, has been rumored to be developing a smartphone. The company would likely use a smartphone to drive more customers to its commerce business, Milanesi said.

But getting into the smartphone space isn't the best way for Amazon to tackle growth, she said.

(Read more: Amazon doesn't plan to launch a free smartphone...yet)

"They don't need the phone. The hardware space is a complex and ruthless business, and they can achieve the same thing with an application to engage users that way," Milanesi said.

"If the goal is to sell more, then they are better off coming up with an app that makes shopping easier, which is what they have done with Flow."

By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson.

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