By opening up access to product and pricing data, retailers spread their market wings
By Paul Demery
As good as BestBuy.com is at engaging and serving shoppers, it reaches only about 0.069% of the online consumer market at any one time. And though that puts the retail consumer electronics site among the top 50 retail sites in terms of traffic as measured by Compete Inc., Kevin Matheny, senior e-business architect for Best Buy Co. Inc., is hoping to at least double that percentage.
“Now BestBuy.com is all we’ve got, so if online consumers aren’t interacting with BestBuy.com they’re not interacting with Best Buy,” he says. “But if we can get consumers to also interact with us online outside of BestBuy.com, by giving them more places to do it, we hope we can see the time they interact with Best Buy on the Internet increase to about twice the time they spend with us now.”
To spread its wings in online retailing, Best Buy has opened up to software developers the application programming interface, or API, to its online product catalog. In the forefront of an API-sharing trend that industry experts say is growing among retailers, the retailer is enabling outside software programmers to develop applications, including new shopping web sites, that display product specifications, images and pricing from Best Buy’s back-end databases.
And because most developers build these new applications on speculation without a contract or upfront payment, Best Buy is often free of the financial risk it would typically take on with commissioned work for new applications, Matheny says.
John Thompson, senior vice president and general manager of BestBuy.com, says the API program, dubbed Best Buy Remix, will leverage the abilities of thousands of developers to come up with new ways to engage online shoppers beyond the confines of BestBuy.com. “It’s what we hope will be a new, fundamental way of doing business,” he says.
KDYKES: They go on to say in the article… “Over the next three years, we’ll see 25% to 30% of the top-tier retailers with API practices.” This shows the power of such an API program for online retailers.
Question: What is common between AutoCAD, Microsoft Office, eBay, Amazon, Google, Adobe Photoshop, Microsoft Visual Studio 2008, Microsoft Windows Vista, Autodesk 3ds Max, LEGO MINDSTORMS and the Apple iPhone?
Answer: Let’s see. At first glance – software and hardware, OS and Web 2.0, developer tools and productivity applications. But they are also all market leaders in their field and they all have APIs (Application Programming Interface) that are used by many companies to build businesses and products on top of them. The value to third-party developers is to avoid recreating the functionality in the base product and as a result, simply focus on creating value-added functionality. Third-party developers also have an automatic installed base of millions to which to sell.
KDYKES: Another example of the tremendous power of baking your API into your business model from the very beginning – & using it as leverage to rapidly accelerate your growth.
Business has always been about connections. Whether it’s communication with your customers, alliances with partners, or ties with suppliers, connections are a critical part of your business.
Traditionally business development was about the salesmen with the Rolodexes who could close a handful of big deals. Today, the rules have changed. In the Web-based economy, business development is about connecting people with the relevant information at the point and time they need to consume it. Web services allow companies to do business across firewalls, reach a broad range of partners, and create new business opportunities.
The Web services model is applicable to a range of businesses, from information plays like WhitePages.com to messaging systems like Twitter to infrastructure providers like Amazon Web Services and semantic web services like Thompson-Reuters’ Calais.
The concept works like this:
A company makes a web service that is accessible via an API (application programming interface).
Each business partner registers to obtain an access key.
Using those keys, partners can use the service programmatically to get and send data.
A well-managed API gives prospective partners, or a community of developers, a way to develop an application using your content or services. They can try it, test it, and even build something that begins to scale demand for your content. Using monitoring and metrics, you can identify the handful of partners or developers that have been the most successful in helping you meet your business goals. In the process, you end up with a self-managed business development funnel that yields the world’s most qualified leads.
Using APIs as a mechanism for content and service distribution, or as a tool to allow partners to build value added services on your platform has become an enticing concept. But the question still remains: If we build it, will they come? The purpose of this paper is to answer that question by showing you how to create a successful business development channel built on a Web services strategy.
KDYKES: From Catrina Fake of Flickr… this is the perspective of how startups build tremendous revenue & value from the outset!