This is the fourth article in our article series on evolutionary architecture. You can learn about the underlying principles such as microservices, API, cloud commerce, headless commerce and event-driven architecture on this page in depth.
Digital transformation may be set on everyone’s agenda, but the strategy to get there can get somewhat fuzzy. Primarily, it’s about becoming a digital business. This means your organization creates value by delivering digital experiences. For retailers and merchandisers who see their customers browsing and purchasing products more online and through an increasing number of different channels, it becomes paramount to improve the shopping experience. And that means combining commerce and experience, but the question is how. At some point on the journey towards digital transformation, organizations will realize it’s all about getting their IT right so the cost of change and the time-to-market drops. That’s exactly what APIs as a strategy offer.
What are APIs?
We interact daily with several APIs. Whether you order online, make a reservation at your favorite restaurant or pay an invoice. In today’s digital interactions, APIs are exchanging information in the background. APIs (Application Programming Interfaces) have emerged as the foundational currency for the web. Already some 20 years ago, we had the concept of silent commerce: transactions taking place digitally via API calls. Like, for example, a printer ordering its cartridges. Basically, APIs are like user-interfaces but for other software. This allows you to decouple the functionality and data from the presentation in a so-called headless approach: the head can be present in any channel as long as it gets its data from an API.
For example, in a webshop, an API can ensure the product lands in the basket. When the order is being paid, the right payment app opens on the customer’s smartphone. That’s what makes API for e-commerce so interesting: it allows you to build better customer experiences with ease. API solutions add functionality without having to develop an application from scratch. This means API enables an application to be accessible to other applications. Just like a service.
Everything as a service
API’s make an application functionality accessible and turn it into a service. This drives a new wave of innovation as applications can easily connect and a best-of-breed strategy becomes possible. Through API business processes can be shaped around the customer’s expectations and experiences, which will lead to increased customer satisfaction and customer loyalty. As Forrester reports: “Firms that use APIs externally are nearly three times as likely to have revenue growth of 15% or more.”
Take, for example, a fashion brand that opens up a new physical store in a new country. To make a successful entry, the brand will also want to accompany the launch with a local webshop. That requires translations, new payment methods, country-specific delivery options and a local approach. By using APIs the brand can efficiently channel translated content, add payment methods and connect to a local logistical system and marketing system. That saves time and costs for building a completely new webshop and enables the brand to make its launch on all channels.
The business potency of API
With customers today spending more time on mobile and social, connecting commerce systems through these channels is essential now for brands. The challenge lies in connecting the underlying systems: commerce systems were built for transactions and not for optimal experiences. On the other hand, the solutions for creating experiences, called Experience Management Systems, lack the transactional infrastructure. To create those shopping experiences that customers expect, you’ll need to combine these two systems.
COMBINING COMMERCE AND CONTENT
Increasingly, customers are looking for inspiring shopping experiences that go beyond finding product data, price and availability. They also crave rich content like video reviews, product stories, designer notes, selection wizards and entertaining yet editorial content. Through these types of content, brands can build an emotional connection with their customers that transcends the transactional and becomes more relational and loyal. That’s where you are working towards a Digital Experience Platform (DXP), a structured approach to building the best customer experiences possible.
Typically, there are two approaches for connecting commerce and content: the “full-suite” or the “best-of-breed” approach. The first approach puts everything a retailer might need into one big block of software, with specific functionality added through modules. While this allows for quick access to functionality, it might not match the digital maturity of the organization. And as integrating with third-party solutions is challenging for most suites, you’ll lose some flexibility. Thirdly, choosing a suite causes a vendor-lock-in, as even the roadmap is set by the vendor.
The second approach is, by design, way more flexible as it is founded on APIs. You can select the best application for each business domain and connect them with APIs into one ecosystem that completely covers the needs of the organization. With using APIs, you can be flexible with your priorities and build and improve your infrastructure as your organization matures digitally. This best-of-breed approach enables you to quickly innovate and accommodate the customers of tomorrow. As the most critical competitive differentiators in today’s digital revolution, speed and innovation will separate brands into leaders and laggards.
THE API-LED COMMERCE
When the whole infrastructure consists of applications that work together like a well-oiled machine, adding new channels and features becomes as simple as adding a new building block. Developers can focus on a specific business domain and don’t need to consider the overall implications. Developing new products and services will go faster and the innovation time-cycle will shorten. That’s where the true potential of APIs lies. Where today a PriceAPI serves the mobile shopping app and the electronic shelf display, tomorrow it can service a new channel that suddenly becomes the bee’s knees, like the smartwatch for example. The underlying commerce functionality stays the same, only the presentation layer changes. Not having to develop the entire pricing logic for every new touchpoint saves a lot of time and speeds up the time-to-market.
It’s key to notice that embracing APIs not only means deploying new technologies but also incorporating a new set of practices. Taking steps to promote a culture around the values that APIs need, like innovation and flexibility, are essential. This calls for a community of learning to reinforce these values throughout the organization. And as the IT structure becomes less hierarchical and more centered around business domains, a different type of governance is needed to manage the code securely and scalable.
APIs are changing how brands and retailers build shopping experiences. APIs are the glue between functionalities and channels that create the seamless shopping experience in which the channel doesn’t matter anymore. For each functionality, you can choose the application that suits best and make it available as a service. From the inspiration and product pages to the checkout process and fulfilment, each step can be optimized separately. As long as commerce functionality and content are accessible through APIs, they stay usable in each context. So, when that smartwatch revolution does happen, you’ll be more than ready to anticipate.