How Retail APIs Can Accelerate Business Innovation
Businesses need to both build and unleash retail APIs to connect with customers, streamline businesses processes, forge partnerships, and create new revenue channels.
The API economy is growing rapidly. ProgrammableWeb – which provides news and information on the API economy – reports that there are over 17,000 APIs available to-date. This booming API marketplace is especially marked by the increasing rate of retail APIs. In 2013 ProgrammableWeb reported 116 retail APIs in their database. In 2017, this database includes close to 1,000 retail APIs.
The exponential rise of retail or open commerce APIs is a reflection that the retail industry is looking for new ways to make use of their data and connect their systems together to create great experiences for their customers and employees, drive new revenue channels, and gain a competitive advantage. Most retailers have vast amounts of invaluable data at their fingertips; yet, they still fail to unlock its value in a creative and innovative manner that furthers their retail strategies.
A Deloitte study revealed that 60% of purchases are impacted by digital interactions. Retailers must tap into revenue from digital touchpoints by ensuring that they establish a distinct IT architecture that exposes hidden data stored in various systems and applications––whether it is mobile applications, inventory platforms, Electronic Data Interchange (EDI), or other systems.
This IT architecture is primarily based on adopting an effective API strategy. Retail APIs in particular can be valuable because they enable businesses to better compete by allowing them to increase engagement with customers, streamline business processes, forge new partnerships, and create new revenue channels .
To illustrate, imagine a scenario in which a clothing retailer wants to further their strategy by improving the customer experience, increasing employee productivity, and onboarding new partners. They decide to release an API to unlock store inventory data; then, they expose that data through self-serve kiosks in the store, internal departments, as well as to partners and other businesses.
In this scenario, the retail API is integral to increasing customer engagement and improving the overall customer journey. Take Jackie, a devoted customer. She enters the apparel retailer’s store to buy a new sweater. She tries a few styles and decides on a turtleneck. Unfortunately, the color that she wants – blue – is out-of-stock in the size she wants. Jackie then walks over to one of the self-serve kiosks and, through the API, she engages with the retailer’s digital touchpoints, and also receives real-time inventory data. Jackie sees that although the item is out-of-stock at this store, it is available at another location only two miles away. She has the option to ship the sweater directly to her home, but since she wanted to wear it out for her dinner date that night, she makes her way to the other store.
Beyond Jackie, this same API can be repackaged and reused by the retailer’s own internal team in order to optimize inventory management as well as streamline internal and external business operations. This helps improve employee productivity and engagement. For example, in the event that a kiosk is not available, the internal API can be used in POS systems in the store in order to allow employees to assist customers with inventory questions. Thus, Jackie can go up to a customer representative, ask about the desired turtleneck, and receive the same inventory information. This entire process leads to better engagement with customers and improves their overall shopping experience by ensuring that they can buy what they want, when they want it, and where they want it.
In addition to increasing customer engagement and streamlining business processes, retail APIs can be repackaged as affiliate or B2B APIs to help retailers create new channels and forge new and interesting partnerships. For example, the retailer can use this same API to forge business partnerships with eCommerce companies and sell on their respective platforms. The partners can then use the API to cross-reference inventory information on their own websites or mobile applications. In this case, APIs successfully can help the retailer develop a mutually-beneficial relationship with another partner. The retailer can also position themselves across various purchasing channels––thereby increasing visibility and revenue through online and mobile shopping.
As illustrated, retail APIs can help retailers unlock valuable data which, in turn, allows them to increase customer engagement, streamline business operations, and forge beneficial partnerships. But beyond this, APIs represent an endless revenue opportunity for retailers. This is because they enable the real-time flow of information to customers, partners, as well as other businesses. This not only allows retailers to reach new customers and build beneficial partnerships, but also provides retailers with the opportunity to sell APIs and profit from usage fees or referrals.
Take, for example, the experience of one of our customers. Dixons Carphone – a leading electrical and telecommunications retail and services company – faced challenges as they struggled to compete with eCommerce vendors, drive consistent sales growth, and optimize the customer journey. They wanted to completely upend the customer experience in order to create a friction-less, seamless shopping journey.
To do this, Dixons Carphone used MuleSoft’s Anypoint Platform™ to develop honeyBee, a platform that creates retail APIs as well as builds, delivers, and manages digital customer journeys. The platform enabled an engaging customer journey by allowing customers to navigate through a consistent experience alongside sales associates in stores––whether they were exploring purchasing options or comparing products. The platform not only removed friction from the customer journey, but also increased sales conversion by 36%, reduced transaction time by 65%, and increased customer satisfaction by 25%.
Clearly, retail APIs can be a great tool for unlocking hidden data. According to Gartner, "as big data becomes the new normal, information and analytics leaders are shifting focus from hype to finding value.” And, as the experience of Dixons Carphone highlights, APIs can help retailers find that value––leading to engaged customers, streamlined business processes, improved business partnerships, and increased visibility and revenue.
The year 2017 has already been dubbed as “the year of the API economy” yet, some retailers are still not utilizing retail APIs. This demonstrates that the majority of businesses are still overlooking some of the advantages that APIs can provide.
Take the first step towards API enablement by understanding the importance of API-led connectivity and exploring how retailers can transform their digital retail experiences.