Open APIs as a means of increasing you traffic and revenue in eCommerce is not a new thing. Big retailers like Amazon, Walmart, Tesco have already delivered matured and stable APIs to developers.
Though currently there is no data available as to what % of total eCommerce revenue comes through APIs globally, the fact that there are around 5000 APIs listed on Programmabe Web indicates the rise and rise of APIs.
But the focus has increased recently primarily because in 2011 mobile and tablets enabled apps and sites proved an important part of eCommerce revenue. And one of the primary tools to build apps on Mobile and Tables (by third parties) is by using the open APIs. Recently Forresters’ Brian Walker wrote a blog claiming year 2012 will be the year of API, so much so that, retailer might contemplate having a API manager on their roles.
Well the question that comes to my mind is how much attention a small and mid sized retailer should pay at APIs. Should they really invest money, effort and time to create APIs, and make them available free to third parties and keep supporting them ? Or are they better of consolidating their existing channels such as web and call centre ? I tried to answer this question by looking at four aspects
End user benifit :Is your customer base eager to see multiple apps for your site based on open APIs ? If you have a mobile enabled web site and may be an app suporting important mobile platforms isn’t that enough ?
ROI :Open APIs can be mainly used in two areas. Mashups and Mobile/tablet Apps . I don’t have figures to show but I feel people will rarely go to mashups and access your site especially if you are small to mid sized company. That leaves Apps for mobile and tablets. No surpise here that this is an important area to consider but be rationale. Do you see any tremendous improvement in conversion if you launch your open APIs. First, there have to be third party developers who are interested and eager to build apps based on your APIs and even if some developers are do you have budget and business case to support this Open APIs ?
Also as a retailer are you ready to agree on a handsome commission for these developers when they refer traffic to your site ?
Strategic Fit : What is your vision for next two to five years ? What is your desired end state as far as Ecommerce business is concerned. Based on my discussions with a few eCommerce heads of business in UK and Europe, internationalisation in European countries ( i.e. rolling out Web and Mobile enabled sites) is high on their agenda and why not. A detailed report from The Economist reveals the size of market awaiting eCommerce business in mainland Europe. (The coming retail boom). In such scenario would you divert your resources for internationalisation or start creating open APIs ?
It is really important to understand your business needs and have a proper business case, before opting to create and support Open APIs rather than taking decisions based on successes of some big companies.
Author : Sanjeev Desai