These days, if you as a retailer browse the Internet, looking at what’s new and important in commerce technology, you will most likely come across the term API. You may know that it has something to do with data exchange between applications – and you know for certain that your tech team gets excited when talking about an API’s possibilities. However, what is so special about an API from a business perspective?

Harbor infrastructure

Imagine an international harbor: it’s a very complex infrastructure planned and constructed to provide for ships of varying sizes as efficiently as possible. There are berths where different ships can dock; crews can moor them safely and get on land utilizing gangways. In the case of cargo ships, there are cranes to unload transported goods as quickly as possible and load the ships again for the next trip. Behind the scenes, a lot of people work in administration and maintenance, so that everything runs smoothly.
In other words, there is an existing infrastructure that ships of various sizes can use. They virtually plug into the harbor system, receive electricity, fresh water, and fuel. They can consume the harbor’s resources as long as they have the fitting counterparts – plugs, cables, and pipes. Ultimately, the port management does not care about what kind of ship plugs into their system: They have developed a universal, standardized structure that caters towards different classes of ships and boats.

API calls: Electricity and fuel

An API is very similar to a harbor: As a programmer, you open up parts of your application to the outside world to gain additional benefits. In a very real sense, an API is like the plugs, cables, and pipes that connect to ships and provide the required resources. Instead of electricity and water, it sends and receives data in a predefined format so that any external application or device can communicate with it safely.
And this is the crucial point: as long as the ship’s plugs and pipes can connect to the harbor’s, everything is in perfect order. It does not matter where the ship comes from, who built it, how old it is, or what it carries. It receives fuel from the port, and the only thing the harbor management needs to know is how much – so it can invoice accurately.
For a retailer with an API in front of his commerce application, it does not matter whether it is a mobile app, a web store or an IoT device such as a buy button that is part of the conversation. All that matters is making sure that the format enables this communication.

How retail business benefits from APIs

Which brings us to the question, why retailers should think about APIs in the first place, and how they can drive their business. Here are four of the most important arguments:
Efficient development and operations: With an API, your IT teams become much more efficient, because integrating different pieces of software does not require so much effort anymore. Good developers can hook up all kinds of applications without APIs as well – but this usually takes a lot of time and resources.
Enable fast innovation: Maybe you have an idea for a new function that you would like to publish and present to your audience. With an API, your developers can use small portions of your infrastructure to create and test new ideas in a very short time-frame.
Prepared for the future: Having a well-built API in place is like carrying a Swiss army knife in your pocket. Regardless of the context, you always have the right tool. If you opt for a new ERP system or if your customers decide to surf your store with this new futuristic gadget – you are already well-prepared.
New business models and cooperations: Your API can present data to the outside world and make them available to third parties, enabling new partnerships and business opportunities. The REWE grocery delivery service, for instance, lets the audience of the Brigitte magazine’s recipe section have access to its shopping basket API. By clicking just one button, all ingredients are put into the REWE delivery service automatically – APIs in the background are exchanging data and making life easier for the users.
In the days of changing customer behavior, retailers should be aware of the tremendous potential of APIs. Much like modern harbors enable the transfer of vast amounts of goods each day and support global trade, an open and accessible commerce infrastructure has much to offer for digital commerce.
If you want to learn more about how the API-based commercetools platform can drive your business, get in touch via email or phone and talk to our experts.