Today’s successful companies are those that embrace the API economy to expand their brands and create new opportunities for engaging with customers. In this final piece, we’ll discuss how creating new distribution channels via APIs rapidly creates more opportunities to sell products, reach new audiences and create new markets. Delivering content via multichannel strategies is the ultimate way to ensure that you are accessible how, when and where your customers want you to be.

Focus on Developer / Partner Adoption

The minute we decided to build and publish the API service, we knew we had to build in such a way that allowed our development partners (mobile device and set-top box companies) to adopt it easily and ramp up fast. We kept the APIs simple, only exposing what the partners needed. And we built the API service just as we would a GUI-based application, making sure that the use cases and the error handling were well thought out.

Once you achieve success with the initial applications, you can think about extending the reach of the API set to more developers. In e-commerce, we are all familiar with the affiliate model, where we rely on aggregators such as Commission Junction to deliver traffic to our online stores. Vendors such as PayPal are also enabling third-party developers to build payment solutions on their API platform. In our case, by opening our API service to a greater developer network, we enabled movie review websites and entertainment-oriented Facebook apps to begin using our movie library.

Continue to Protect Your Organization and Customers

Being conservative when it comes to technology adoption is not a bad thing for retail organizations. After all, we want to protect our customers who entrust their private and transactional data with us and mitigate our company’s risks.

As we stitched together new business solutions from existing ones, we continued to verify that the high standards we hold ourselves to in matters of data security, transactional scalability, and consumer privacy are continuously followed. In terms of credit card / transaction processing, we were really sensitive about complying with the PCI standards set forth by the credit card associations. Just because our apps were built quickly with minimal cost didn’t mean we could side step any security and privacy regulations or best practices.

Conclusion

Even though retailers have limited budget and no additional manpower in this recession, they can still innovate and deliver applications that meet customers’ demands for access to product information and the level of collaboration they demand with their social networks. The keys are to act fast; leverage existing enterprise software and data assets; and pragmatically tap into existing cloud computing and API-enabling technology offerings that can help us meet customer, competitive, and marketplace challenges.

Since the arrival of online commerce 15 years ago, there have been few technology trends that have the potential to revolutionize the retail industry like the ones we see in mobile computing, social networking, and cloud computing. Today’s piece looks into the ways that retailers can shed a more conservative, traditional mindset and embrace new ways for deploying new apps, delving into practical insights for creating innovative, API-enabled applications. More specifically, how leveraging the move to the cloud can serve as the smartest decision in blowing out one’s API strategy.

Think Modular and Act Entrepreneurial, on the Cloud

Many retailers are very conservative when it comes to technology adoption, and they to closely control where new apps are deployed. Due to our limited budget, we didn’t have a choice but to embrace a new way for deploying the new apps.

Had we done it the old way, we would have acquired and configured the database, application, and web servers ourselves. We would have had to negotiate a long-term hosting agreement worth millions of dollars, and the agreement would have to go through a lengthy legal and executive approval process. Instead we acted like a startup and launched our API service and the API-enabled applications on the cloud, outside of the confines of our firewall, with the help of a technology partner. We bought capacity only to the level that we needed and as the services gained customer adoption, we added more. With this strategy, we were able to avoid high, upfront fixed costs and turned them into variable expenses.

Don’t Build Everything from Scratch

Some retail technologists see any initiative as an opportunity to re-engineer and rebuild. We didn’t have that luxury. We also realized that we already had valuable digital assets and enabling applications available, in-house or externally through our partners. The constantly updated movie library was already there. Our store locator engine was built. We had a transaction engine and a payment gateway. What we needed to do was create a common API service layer that would enable new applications to access those services consistently, for many more customers (millions), and in a way that we could monitor analytically for future improvements.

We looked outside of our organization and found a SaaS vendor whose technology enabled us to create this API service layer quickly, get them up and running on the cloud, and use analytical reporting tools to monitor traffic and the conversion data. We also used the same Graphical User Interface designs across different consumer devices, making only minor tweaks for usability. The key is to leverage existing solutions to accelerate time to market before your customers leave you. Without technology from this vendor, it would have taken us five to ten times as long to deliver what we wanted to.

In my third and final part of this series, I’ll discuss the strategic benefits that can result from extending the reach of APIs to developers and partners.

Since the arrival of online commerce 15 years ago, there have been few technology trends that have the potential to revolutionize the retail industry like the ones we see in mobile computing, social networking, and cloud computing. As retail executives, we are challenged to deliver innovative applications that satisfy the customers’ demand for commerce content and transactional ability from anywhere, using any of the always-connected consumer devices: smart phones, set-top boxes, and even internet-connected picture frames. Furthermore, due to the great recession, the notoriously limited retail IT budget is now even tighter, so we have to deliver these applications at little or no additional cost.

As someone who has been in the same boat, I want to offer, over a series of posts, several practical insights for creating innovative, API-enabled applications. I believe the time to take action is now, and if we do things smartly, limited budget or aggressive timeline should not be an impediment.

Find the Perfect Entry Point, Not the Perfect Roadmap

The company that I worked for rented movies and games through retail outlets. We needed to act fast to counter the challenges posed by our competitors who were delivering the goods by mail and digitally via the web and set-top boxes.

Instead of doing lengthy research to discover the perfect product roadmap, we decided to focus on enabling developers and partners to innovate on our core service. We quickly launched a very focused API service as an entry point, and developed a simple iPhone app as a proof-of-concept for building an application on that API.

Then, working with our partners, we quickly created and released an application that the customers can use from their mobile devices or set-top boxes. Using this application, the customers can search for movie titles, browse for recommendations, and decide whether they want to watch the movie immediately through their set-top box, browser, or pick up the movie from the closest retail outlet.

The most critical decision was to not wait too long to make a decision. Once customers were using the initial app, we enabled them to give us feedback that we monitored closely, which in turn allowed us to iterate and improve upon the initial entry point.

In my next entry, I’ll look into ways that retailers can shed a more conservative, traditional mindset and embrace new ways for deploying new apps.