How eCommerce Businesses Are Leveraging the API Economy

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Ever since its inception, eCommerce has revolutionized the way people shop. However, eCommerce businesses, themselves, are evolving at a far greater pace than ever before.

The stiff competition in the eCommerce marketplace keeps businesses on their toes, pushing them closer towards an ideal customer-centric model. But incorporating new eCommerce trends and technologies is no easy feat, especially for eCommerce infrastructures with multiple moving elements.

Adaptability is just one side of the coin; speed is the other one for these businesses. They need to be flexible and quick at the same time. As a result, microservices architecture and headless eCommerce are gaining popularity in the ecosystem.

But what breathes life into these infrastructures are APIs. If it weren’t for APIs, there would be no communication between the different elements of a microservices architecture or headless eCommerce. However, the role of APIs in the future of eCommerce goes even beyond this.

In subsequent sections of this article, we’ll develop a better understanding of APIs, their role in eCommerce, and the many benefits they can offer an eCommerce business.

What’s An API?

Application Programming Interfaces, aka APIs, allow software applications to interact through a standard set of rules and protocols. This standardization leads to easier collaboration between different apps and services, making the entire system more flexible and adaptive.

With an API, it doesn’t matter what software framework the two interacting elements are based upon. The communication relies on the set of rules specified by the API. It lays down clearly the set of responses an application is supposed to provide for a specific request.

In the absence of APIs, it might take thousands of lines of code to achieve such interactions. APIs save up a lot of development and programming legwork, reducing overall project cost.

The freedom that comes with APIs allows businesses to welcome innovations and absorb them in the existing infrastructure with ease. There isn’t a need to develop every solution from scratch anymore. Instead, the focus has now shifted more towards bringing in expert third parties into the mix to get the job done. Whether it be the Google Maps interface you see on the Uber app or the ability to direct Alexa to play a song from the Spotify library, APIs are more prevalent in your everyday life than you think.

The API Economy and eCommerce

APIs have turned businesses into platforms that can connect with multitudes of other players, both as service providers and customers. The apparent benefits of this functionality are that it either augments the participant’s capabilities or makes a profit from the service they are extending through the API. It is the transactions and participants like these that make up the API economy.

The eCommerce API economy is a bubble of its own. It comprises retailers, eCommerce businesses, and expert service providers catering to different sub-niches such as payment, shopping cart, customer support, etc. Customer expectations and their changing behavior patterns demand eCommerce players to keep innovating and bring in new capabilities.

Thanks to APIs, online stores can now respond positively to such demands. The future of eCommerce seems to be going the API way, the one in which the refrigerator automatically orders grocery items for you.

APIs have now become an integral part of successful eCommerce businesses. For eCommerce, the question has truly transcended from “should we use APIs?” to “which APIs should we use?” Let’s have a look at some of the objective benefits of having APIs in eCommerce models and then explore a few eCommerce API examples.

The API Advantages

1. Reduced Cost

As mentioned earlier, APIs allow you to eliminate a lot of the coding legwork. There is no need to hire yet another developer to write yet another set of codes that may or may not work well in the end. The standardization is usually enough to establish synergy between the interacting elements.

The eCommerce landscape now has multiple API providers. The competition among these providers helps keep the cost of services down. As a result, current and future eCommerce businesses will enjoy a plethora of options at lower prices.

2. Improved Performance

APIs facilitated the shift from the monolithic to the now prevalent microservices architecture in eCommerce models. The most significant advantage of having disparate pieces in the architecture is the higher accountability of concerned parties and improved performance of the elements.

Be it a microservices team within the organization or a third party API provider, you can now expect a much better performance from the elements connected via APIs.

3. Higher Frequency of Upgrades

APIs have eliminated the need to create from scratch every time you wish to add new functionality to your online store. The readily available third-party solutions and easy integrability through APIs mean you can roll out changes in no time.

4. Smoother Integrations and Collaborations

eCommerce has gone dynamic in the past decade or so. There is a lot more to it than just the online store with a vast product catalog. eCommerce marketers need to continually devise new ways to keep their noses ahead of others. Collaborations and integrations with other platforms are aspects of the customer-centric approach they follow these days.

From one-click sign-ups through popular platforms such as Google and Facebook to showing product reviews from other media and product descriptions on the store are all possible through APIs.

5. Omnichannel Experiences

You might have heard the term “omnichannel” being thrown around in the context of eCommerce. That’s because eCommerce isn’t limited to smartphones, desktops, and tablets anymore. Cars, watches, refrigerators, and whatnot now come with the capability of placing orders from online stores. And customers must get a seamless shopping experience while shopping through any of these means.

APIs have made it easier for online stores to extend their capabilities across different platforms and devices. The IoT will have a big say in eCommerce’s future, and we have APIs to thank for bracing the eCommerce world for all these changes.

The Different Ways eCommerce Businesses are Leveraging the Power of APIs.

1. Shipping APIs

Shipping APIs tie in the different shipping functionalities to the online store. They can be for label generation, using multiple carriers, tracking shipments, validating addresses, and other related functionalities.

Each of these features has its unique advantages. For instance, the multiple carrier API would let the shopper choose between faster and cheaper delivery options. The address validation API eliminates errors and process redundancies due to incorrect addresses. What’s notable here is these APIs make life as easy for shoppers as much as they do for businesses. FedEx API, Shippo API, and Easyship API are some of the examples in this category.

2. Payment APIs

Payment APIs are at the core of every eCommerce platform. There are hundreds of online payment options, from credit cards to cryptocurrencies, and you never know which one the next customer would prefer. Payment APIs are vital for providing multiple payment options and payment gateways for the online store.

Additionally, payment APIs can manage subscriptions and generate invoices, among other things. Stripe API, PayPal API, and Square API are among the well-known options in this segment.

3. Sales Tax APIs

With a consumer base distributed across various jurisdictions, tax calculations used to be a headache for eCommerce businesses, but not anymore. Sales Tax APIs readily calculate the accurate tax rates based upon the customer’s region. Such APIs help avoid irregularities in tax compliance.

4. Anti-Fraud APIs

The eCommerce industry has grown so big that stores will inherently catch unwanted attention from cybercriminals. Anti-fraud APIs keep such conmen at bay. These APIs establish multiple checkpoints to filter out the potential red flags. These services can match geo-location with the shopper information, verify email addresses, validate credit card info, and perform other actions to keep transactions safe.

5. Shopping Cart APIs

Shopping cart APIs put retailers and eCommerce business owners in a much better position to optimize their cart and increase sales. They give owners superior control over cart data and space to include integrations to reduce cart abandonment and increase conversion.

The APIs can deliver personalized offers and discounts based on a customer’s buying history. This can motivate them to purchase what’s in the cart. Cart APIs also help with the omnichannel shopping experience by displaying the same cart content to the shopper across different channels.

6. Social Proof APIs

Social proof now has the same effect as word of mouth. Knowing that plenty of other people have brought the product or said great things about it, a shopper is more likely to go through with the purchase. Social proof APIs can pull reviews from reviewing websites, highlight how many people have already purchased the product, and add social widgets to emphasize the online store’s trustworthiness. Social proof APIs are getting increasingly prevalent in eCommerce strategies.

7. Recommendation Engine APIs

Personalization is one of the cornerstones of the customer-centric approach undertaken by the successful eCommerce stores. Recommendation engine APIs bring in the power of analytics and machine learning to eCommerce platforms and develop relevant suggestions for shoppers. Such recommendations enhance the customer experience and, therefore, improve the sales figures.

8. Login APIs

One-click logins are raging at the moment. eCommerce businesses are striving to make life as simple for the shoppers as possible, and allowing them to sign-in with a single click is one part of it. Retailers use APIs which link the customer’s existing accounts on popular platforms such as Facebook and Google to the online store. It bypasses the need for shoppers to create one more account and remember one more password.

9. Marketing Automation APIs

Marketing has come a long way from displaying a single product on a billboard to using inbox as the personalized billboard for every customer. Marketing automation APIs let shoppers leverage these personalized billboards by adding them to a more relatable marketing campaign for the shopper. These can add shoppers to specific email lists based on their browsing and purchase history.

10. Catalog APIs

Catalog APIs give retailers the ability to manage and update thousands of products in a matter of seconds. The API easily integrates with essential eCommerce platforms such as ERP, CRM, PIM, POS, etc. and allows the retailer to maintain uniformity among all the different platforms.

The Wrap-Up

eCommerce businesses are second to none when it comes to making the most of the API economy. You can find them using APIs for all the primary and secondary features on the platform. Moreover, APIs have made it possible for smaller players to get competitive using APIs.

And the customers couldn’t have asked for anything better either. They get more convenience at a lesser price now. With APIs around, the future of eCommerce seems like a win-win situation for shoppers and businesses alike.