May 29, 2009, 12:00 AM

Take My API—Please

By opening up access to product and pricing data, retailers can spread their presence across the web.

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.

Product price alerts

One of the first Remix projects, the shopping site ConsumersPrice.com, launched in a beta test program earlier this year as a site where shoppers can request alerts of future pricing on particular products sold by Best Buy. Developed by Ribbit, a unit of British Telecom that specializes in building Internet phone access to web sites, ConsumersPrice.com is designed to interact with shoppers in several ways.

A core feature of ConsumersPrice.com allows shoppers to set a price they’re willing to pay for a particular product that Best Buy sells. If and when the desired product hits that price target the shopper gets an immediate alert through text message or e-mail. Best Buy, meanwhile, gets valuable information on customer demand to help it manage pricing and inventory, Matheny says.

In addition to Ribbit’s own technology that supports voice-recorded reviews and messages sent via e-mail or SMS text format, ConsumersPrice connects with APIs for Google Inc.’s Google Maps application, social networking site Twitter and the photo-sharing site Flickr.

As a result, shoppers on ConsumersPrice.com can record and listen to audio files of voice reviews of products; share comments with friends through text messages, e-mail and Twitter.com; and view photos taken by particular camera models posted on Flickr.com. They can also call up the Google Maps application to view the locations of Best Buy stores that have a desired product in stock.

“ConsumersPrice is providing consumers with more options for finding the product they want at the best possible price, offering online communities the opportunity to influence product inventories and pricing, and giving Best Buy an important new way to engage consumers and move product in a down economy,” says Dan Seyer, vice president of consumer product management at Ribbit.

Amazon knock-off

Sharing APIs with outside developers is not a new concept. Retailers Amazon.com Inc., eBay Inc. and Apple Inc., as well as companies like Google, have been doing it for years. “By opening up its API, Amazon has enabled other retailers to sell on Amazon.com to help it expand its product line well beyond books and CDs,” says Gene Alvarez, vice president and retail analyst at research and advisory firm Gartner Inc.

Although Amazon also sells its own general merchandise, other retailers on both Amazon and eBay use API connections to sell through the Amazon.com and eBay.com platforms.

What’s new is that a broader base of retailers is primed to open their APIs within the next few years, experts say. “In some ways, this is like a knock-off of the Amazon strategy,” Alvarez says. “Over the next three years, we’ll see 25% to 30% of the top-tier retailers with API practices.”

Alvarez adds that he’s advising a number of consumer-oriented and business-to-business clients on API strategy options. “They’ll choose developers who will use their APIs to connect to their shopping carts and product catalogs to help them move products,” he says.

Moreover, the API strategy isn’t only for the largest online retailers, says Oren Michels, CEO of Mashery Inc., a company that serves as a gateway and clearinghouse between developers and the APIs of companies like Best Buy, Netflix Inc. and Etsy Inc., an online retail marketplace for sellers of handmade goods. “We have a lot more retailers in our pipeline,” Michels says.

Although some developers may produce nothing of value, retailers bear no risk as long as they’re careful in how they let developers access their API, experts say. “There’s no downside, but there could be an upside,” says Sucharita Mulpuru, principal analyst for retail e-business at Forrester Research Inc. “And retailers don’t want to miss out on what could be the next big thing, so it absolutely makes sense to explore.”

Remix programs

In addition to ConsumersPrice.com, the Best Buy Remix program also includes developers working on projects such as iTrackr Inc.’s iTrackr.com and Cosmic Shovel’s Camelbuy.com. ITrackr will let shoppers track current prices of products available at particular Best Buy stores.

Camelbuy is an outgrowth of camelcamelcamel.com, a product tracking service for goods sold on Amazon.com. Camelbuy shows daily and weekly price declines for products sold on BestBuy.com, and it will e-mail alerts about price drops to shoppers following particular items.

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