August 7, 2012
With interest building around the use of application programming interfaces (APIs) to, as Forrester Research's Brian Walker puts it, "open up the commerce platform," we turned to Elastic Path's Linda Bustos for the lowdown. As the director of ecommerce research and a conversion optimization consultant at the digital commerce software firm, she separates fact from hype to identify trends online marketers need to understand. But you likely already know and love her as the lead blogger and developer of the popular Get Elastic blog.
Here, Linda shares her insights on why shopping APIs are important to ecommerce. For even more on APIs, check out the infographic below the Q&A; Monetate and Elastic Path joined forces to chart the rapid growth of these digital commerce conduits.
What’s driving the rapid development of APIs that support ecommerce?
Bustos: The explosion of social and mobile / TV / gaming console apps has created new touchpoints that commerce naturally wants to flow into. To push catalog, search and checkout functionality, for example, requires communication between commerce systems and touchpoint applications. APIs make it possible.
APIs are also driving disruptive products like digital goods (electronic magazine and newspaper subscriptions, streaming video services, ebooks, mobile and social games, etc.). These products may require recurring billing, in-app transactions, etc., without a standard checkout process. APIs can make the connection between the digital product and the commerce system.
What are the big pitfalls around shopping APIs that ecommerce firms need to avoid?
Bustos: Shopping APIs can be internal (just for the company or between trusted partners) or external (public)—the latter being offered to developers to remix product catalog and other features, often for affiliate purposes.
With internal APIs, you're dealing with authentication and security issues and various user states and permissions at different points of navigation through the site. There's a lot that can go wrong if you don't have rock-solid documentation, testing, or PCI compliance.
With external APIs, you risk that what developers build isn't as tight as what you build internally. There's a balance between maintaining control and attracting and keeping developers happy, as well. Devs want to see clear benefits from your API (if they can monetize their mashups, that's a plus), code samples, and good documentation, along with support forums and contact addresses from your company. You need to be committed to every area, including marketing the API to developers.
Which ecommerce sectors are lagging with respect to shopping APIs?
Bustos: Truly transactional APIs are still nascent. In industries where they are critical to monetizing the product (think of digital goods and subscriptions where transactions happen within the product, such as in-game purchases, renewals, upgrades, redemption of loyalty points) or when user permissions and resumption of content or game play where it was left off is important, APIs are more common. They're part of the business model.
For traditional e-retail, we may see more Sears, Best Buys, Tescos, Amazons and eBays sticking their necks out as they see the value and clear best practices evolve around doing APIs. It's still early and exciting, but you could say every sector is lagging today—there just needs to be more awareness and courage to use them.
What are some of your favorite shopping APIs?
Bustos: Tesco's Korean subway shopping project really blows my mind. It combines QR code readers and what I call "installation ecommerce" right in the subway, so commuters can really redeem their time. Amazing technology.
My other favorite is Nike's FuelBand, a physical product that reads your biometrical data during exercise and syncs it to your smartphone app so you can track your progress and training. Though it's not transactional, it could be tied into a loyalty system where meeting exercise goals could be turned into discounts or free product. If nothing else, it's fantastic branding. If you're using your FuelBand on a regular basis and engaging with useful Nike apps and content, how likely are you to buy Adidas?