Beauty & Brains in Branding & Web

API Represents the Future of E-Commerce

API Innovation

“Innovate or die.”

“Innovate or die,” are the long-quoted, immortal words of New York Times technology editor Damon Darlin.
The mantra has guided the visions and marketing perspectives of successful businesses worldwide since the late 1990’s. As modern organizations recognize and accept social media as a focal element of their promotional mixes, few understand the potential that exists in e-commerce Application Programming Interface (API) technology as a means of dramatically expanding sales channels and capturing market share on a massive scale. As API appears to remain in the domain of technical personnel and IT managers insofar as systems integration; the business implications should not be neglected by executive strategists and marketing management. First movers stand to benefit most.

API & E-Commerce
Any single API represents an opportunity for software systems to communicate with each other by sharing specific real-time data. For example, separate API’s can be created to communicate inventory, product catalog, order status, billing or any other relevant piece of information. E-commerce API’s can be created in such a way to allow affiliates, down-stream distributors or B2C retailers, for example, to sell an API provider’s products to their own customers by ordering directly from the provider without compromising the downstream, branded purchase experience. The e-commerce API is merely the channel through which the end-buyer purchases the provider’s products.

There are significant benefits to be enjoyed by all parties within the integrated API chain as well as the buyers. E-commerce API integration allows for a seamless customer experience whereby buyers would perceive their shopping experience as occurring exclusively within the downstream channel member’s e-commerce site. In reality, the downstream channel member is merely offering what is available through the API provider’s e-commerce site and is facilitating the purchase. The intermediary seller often collects pre-determined commissions without having to handle inventory or shipping and their associated costs. The API provider, in turn, has access to an expanded sales network supported by the marketing of downstream members. E-commerce API integration represents an extremely simple, cost-effective, efficient and powerful means to grow a business, revenue and profits.

A Proven Model
The model should not be unfamiliar to internet users who purchase books, music, vacations or auction items online. The world’s largest distribution goliaths have had remarkable success using web service and API technology to open new channels and allow for API-derived revenue to outpace their own direct sales. Have a look at some figures:

  • Amazon earned $1.19 billion in revenue ($108 million of pure profit) through their web services (API’s) in 2011, up from $500 million in 2010: a year-over-year increase of 138%
    – Morgan Stanley, 2012 & Business Insider, 2010
  • 80% of Expedia’s 2012 revenue, equating to over $100 million, will be made through partner sites that run through API
    – Forbes, 2012
  • By 2014, 75% of the Fortune 1000 will offer public web API’s
    – Forbes, 2012

The Value of Granular Stand-Alone API’s
When simpler data communication is required for specific stakeholders and third parties, single API’s can be created for unique data types. For these reasons, it may be more appropriate for e-commerce websites to consist of an ecosystem of stand-alone, granular API’s that can be cherry-picked to provide to differing parties only the data that is appropriate for them. In order to accomplish the separation of data types, it is advisable for e-commerce applications to be architected and built as the engine behind multiple sites with data communication requirements. Automating and controlling dataflow has several business and sales optimization implications which is why distributors’ web applications should be primed for the future of e-commerce.

What Can API Do for Your Business?
My point is, if you’ve got products and services to sell online, re-think your model. Think downstream. Think bigger. Consider API’s little tools in the toolbox you use to build your business; the more you’ve got, the more you can do, and the more easily you can do it.  Never stop creating value throughout your supply chain, and (properly) automate as many processes as you can. Think about the basic equation for profitability and imagine how API’s can help to stimulate revenues and cut costs. It’s not a stretch of the imagination, just have some vision.

Have any API success stories to share?  I’d love to hear about it.  And if you have any questions or comments, shoot!  Share this article if you’ve found it insightful or important to you and your network.

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About The HTC Team

The HTC team works together to fuse elegant design and usable functionality. We are proud of our personal approach, innovative talent and ambitious attitude. But we’re more than just an industry-leading company. We are left-right brainers, trend-spotters, explorers, leaders, strategists and sometimes we’re simply beer connoisseurs. Check out what’s inspiring us today!

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