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.
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.
Another Remix partner is GetGlue.com, which lets shoppers view social shopping information related to whatever they happen to be browsing. GetGlue provides users with a web page toolbar, or Glue bar, that shows thumbnail images of friends that have viewed the same products. Users can mouse over or click each friend’s image to get more information, such as whether a friend purchased the browsed item and, if so, product reviews the friend may have posted online.
By connecting with Best Buy’s API, GetGlue can show products these shoppers have viewed or purchased on BestBuy.com.
Hoping to attract developers, Best Buy is publicizing the Remix program on developer sites such as Programmableweb.com, Mashable.com, ReadWriteWeb.com and TopCoder.com. Through online ads and e-mail campaigns, it lets developers know they can log onto Remix.BestBuy.com to learn about the API program and start experimenting on a development project.
Best Buy routinely e-mails developers about updates to Remix, such as its recent expansion of the program to include access to the text of customer reviews as well as the ratings generated through the retailer’s Bazaarvoice system.
To start projects, developers can click from the Remix web site to register on an application hosted online by Mashery, which serves as the sole gateway to Best Buy’s API. Most projects are self-started by developers without prior input from Best Buy; they need only an e-mail address to begin using the API, Matheny says.
To make it easy for developers to participate and attract the most projects, Best Buy allows for constant free access to the API. “Developers often show up in the middle of the night and don’t want to wait for approvals, so it’s best to give them limited access without requiring pre-approvals,” Mashery CEO Michels says.
Mashery manages access by developers to Best Buy’s API, including the level of each developer’s volume of API transactions.
Controlling data flow
To protect its core infrastructure during Remix projects, Best Buy worked with Mashery and web site developer Pivotal Labs to design and build a Remix technology platform separate from BestBuy.com but with a copy of the retailer’s product catalog data. “We did that so as not to endanger our core BestBuy.com platform in any way,” Matheny says.
When developers pull information from the Remix API, their data queries go through the Mashery gateway to the Remix platform. Mashery controls access by developers to the API according to rules set by Best Buy; it also manages the level of each developer’s API transaction volume, presenting constantly updated volumes on a web dashboard for Best Buy managers.
Best Buy limits each self-starting Remix developer to a range of 1,000 to 5,000 API queries per day, that is, the number of times an application pulls product descriptions, images or prices. During these initial and relatively low levels of API activity, Best Buy and Mashery let developers operate on their own to see what might develop, Matheny says.
If a developer starts to exceed 5,000 daily queries, Best Buy will inquire about the project and determine whether it offers enough potential value to proceed using the API, he adds.
When Best Buy has a particular need for which no developers have started a project, it will post an invitation with incentives on TopCoder.com, which provides a page for Best Buy as well as other API providers to monitor project proposals.
In a recent invitation to develop an application to support webcams, for example, Best Buy offered $250 to each of the top five developers judged to have the best ideas. Next, it will offer a higher monetary award to the two or three coded applications that stem from these ideas and are considered the most effective and promising.
To get on the short list of best coded applications, a solicited project must pass two sets of tests: a manual review of the software code by Matheny’s team to ensure the code makes sense, and an actual test of the software functionality by TopCoder to ensure the application works. The one judged to have the best functionality gets the final project go-ahead.
Although Best Buy isn’t saying what it cost to build the Remix API infrastructure, Matheny describes it as an inexpensive project that has already proven its value in multiple ways. While it ensures that outside developers are getting accurate and up-to-date information from Best Buy’s product catalog without causing high traffic volumes to BestBuy.com during the development stage, it also supports in-house application development.
World of ideas
One of the largest uses of the Remix API program is a Best Buy project manager testing out a new way to provide information from BestBuy.com in the retailer’s stores. “Doing a custom data extraction like this would have cost $500,000, but because we have Remix already making the data available, it costs us nothing,” Matheny says.
The greatest excitement about Remix, however, is that it opens up Best Buy to ways of reaching and serving customers that it otherwise may have never thought of, he adds. “We acknowledge that we don’t have all the best ideas at headquarters,” Matheny says. “So we’re asking the world to share ideas.”
paul@verticalwebmedia.com
