If two concepts could be more aligned in terms of growth - you’d be hard-pressed to find a better match between APIs and e-commerce. Over the past decade, both sectors have enjoyed a surge in growth become integral in the digital era.
To show just how much e-commerce has grown in recent years, in 2013, the global market value was $1.3 trillion. By 2021, that figure is predicted to rise to $4.8 trillion - a rise of around 260% in just eight years. And yet, there is still plenty more room for growth.
In the US, e-commerce is projected to take up 13.3% of total retail sales, down from 15.7% in 2020, after a lockdown triggered surge. Given the continued dominance of brick and mortar retail, there’s little doubt there remains enormous untapped potential in e-commerce.
It has been a similar story for APIs.
While there’s not an abundance of statistics like in e-commerce, the API market has shown promising growth. According to one market research company, the API management industry will grow at 29% CAGR over the next decade, reaching over $21 billion by 2028.
Given the vital role APIs have in connecting multiple programs and software, the level of growth will likely be sustained in the next decade and beyond,
In this article, we’ll look at how APIs support e-commerce businesses and the benefits they bring.
Benefits of APIs in Ecommerce
There are many benefits to having APIs in your e-commerce business, which are primarily based around automation and integration. In e-commerce, for example, it is essential to have a website or online store that operates quickly and smoothly. APIs can be that secret ingredient that makes it all click. Here are some of the benefits in more detail:
Improves the Customer Experience
In e-commerce, many stores are offering similar products - except in niche areas - and it can be difficult to compete on prices if your margins are already tight. The one area where you can stand out, however, is in delivering a smooth customer experience.
For instance, if a customer comes to your store, can find what they want, and purchase the items within minutes, then you’ve delivered an optimal customer experience. There is evidence that even a small delay in the customer journey can put them off completing a purchase.
By using APIs and advanced API management platforms, you can minimize these glitches by ensuring the different programs you use to operate your business interact efficiently. A good example could be your payment processing platform and delivery systems. Using an API can duplicate the data entered into the payment area and automatically fill the delivery fields.
These small touches combine to deliver a cohesive, personalized experience for your customers and keep them coming back for more.
Better Data Analysis and Management
One of the key functions of APIs is to manage the data more efficiently. Acting as gatekeepers of tech, APIs help to filter the data to prevent software and programs from becoming overloaded. And it’s easy to see how systems can become overwhelmed with the sheer amount of data produced daily.
The most recent studies suggest that 2.5 quintillion bytes of data are being generated each day. As we mentioned in a previous post, that is an extraordinary, almost unimaginable amount of data. If it were converted to American pennies, it would cover our planet - five times over.
This makes the role of APIs and API gateways vital for modern company operations. It helps businesses to optimize the data and provide a foundation for high-quality data management.
By refining the data and funneling it through an API management platform, you would be able to analyze the data better and arrive at more accurate conclusions. For example, you can track data going through your payment processing software to understand what your customers are buying and other elements of behavior.
In all, it helps you to build a complete picture of how your customers are using your site, identify any potential issues or blockages, and find solutions.
An appealing aspect of APIs is the ability to support automated processes in all types of businesses, including e-commerce. With APIs allowing different programs to interact in the background, less time is needed to manage those processes, which frees you and your team to work on the more profitable parts of the business.
A less obvious way of how APIs can increase productivity is through app development.
Instead of developers having to come up with new applications from scratch, you could tap into your network of APIs and develop new apps from there. This accelerates product development, technological innovation, and in turn, the growth of your business.
Streamlined Internal Operations
We’ve looked at how APIs can help with customer-to-business interactions and support internal communications and connectivity. In fact, the vast majority of APIs in use today are focused on internal operations and helping to facilitate processes within the business.
In e-commerce, the proportion between internal and external operations will likely be more balanced, given how vital the customer experience is. However, teams still need to be able to gather as much information as possible and collaborate to deliver the best possible results.
For instance, in any digital marketing campaign, you would need information from your CRM platform, finance software, and social media. APIs can support teams who need to bring the data together and deliver a winning strategy.
APIs and Ecommerce: A Match Made for the Digital Era
It seems appropriate that the prominence of e-commerce and APIs have mirrored each other - albeit e-commerce enjoys success on a much bigger scale. However, this does not mean that APIs are any less important in the digital era, and in fact, they are integral for any company wanting to achieve digital maturity.
E-commerce is a fast-growing industry, with plenty of scope for growth - and yet it also remains fiercely competitive. In order to avoid getting in a price war with your rivals, take the opportunity to transform the customer experience. Make your website or online store slick, easy to use, and personalized - and your customers will keep coming back.
And an advanced API management platform is your ticket to e-commerce success.