Why success in retail is all about sharing
Artificial Intelligence? Virtual Reality? Robots? During the past five years, all three of these innovations have been named as the technology to shape the future of the retail industry. However, in reality, the industry is already in the midst of a transformation; and it’s all about the data.
Today’s shoppers want to browse, review, buy and return their goods across a range of different channels, and retailers are all jostling to be among the first to offer their customers a truly ‘omnichannel’ experience.
There is already a vast and growing mass of data about customer likes and dislikes, purchasing habits and lifestyles, collected from and about shoppers in stores, as well as from their mobiles and laptops. The biggest challenge for retailers now is how to bring it all together and turn it into useful, actionable information. Key to the answer is a small piece of technology that isn’t even new: amid the latest behavioural data analysis applications, online shopping tools and in-store technologies sits the humble Application Programming Interface, or API.
APIs: enabling retailers to put two and two together
APIs, in their various forms, have been with us for years, enabling data sharing between two or more platforms, systems or applications. In retail, they serve a vast range of processes including product searches, submissions and recommendations. Perhaps the most important of these is the need to serve customers both on and offline. I find it incredibly frustrating to walk into a store and be told that a product is out of stock, but that I can order it myself – as long as I do this at home. A brand that can provide me with a way of doing this in-store would immediately go to the top of my list. And the evidence indicates that satisfying the customer demand for easy movement between physical and digital spaces is lucrative for retailers; retailers who empower customers to interact with a brand across two or more channels are 21% more profitable than retailers leveraging just one customer channel. Clearly, the need to share data between systems that were previously completely separate is crucial.
In online shopping, for which so many different applications have been developed in the past decade, transmitting data via APIs is crucial at almost every stage, from catalogue and inventory to your recommendation engine. During the purchasing process, for example, a submissions API may work in conjunction with a geographical API to pass on the customer’s address to a third-party delivery service, and also determine any shipping fees.
The Internet of Things – working on APIs
Consumers are becoming increasingly accustomed to the idea that their devices may be passing information across the internet to other applications. Most of us assume that our mobiles can be located by any number of parties and that our fitbits are transmitting our personal data, while our heating systems and burglar alarms can be managed remotely. In this way, APIs are also essential to the transmission of information between applications, and the Internet of Things (IoT) holds a great deal of opportunity for retailers. From shelves that signal when a particular size of shoe has run out, to cameras that record customer traffic to a store, the possibilities are immense.
This opportunity can even extend to the home. Amazon Echo’s Alexa home assistant can order grocery items for me if I’ve already bought them online. In future, the company plans to take this a step further with Echo Look, which includes a camera. The Echo Look device can take full-length, 360 degree photos and use AI to provide fashion recommendations. It represents yet another avenue for retailers to reach customers, but also a means for retailers to understand their customers better and connect with them more intimately.
The future: it’s all about being open
In the supply chain, the transmission of data from one application to another has been essential for decades. Before the introduction of standard APIs such as RESTful web services, this relied on using cumbersome “Electronic Data Interchange” systems. Now, however, these API connectors are the key to sharing the data that comes from the customers themselves. Without them, retailers could never hope to bring together all the channels that their customers demand. With them, we can expect to see a world of retail where, more than ever, everything is connected and a brand can truly communicate with customers across any channel.
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