We previously discussed what retail APIs are, and how they affect the customer experience.  But how are APIs affecting the retail industry?

If you’ve ever visited a TJ Maxx or other discount department stores, you already know how they conduct business.  Brand manufacturers sell their extra inventory to these stores at a discounted price, thus delivering designer items (at discounted prices no less) straight to your home.

The invention of the tablets and smartphones facilitated retailers’ efforts.  They no longer needed to get people into their stores, or ship inventory across the nation to your local TJ Maxx.  They just need a camera and a good web designer.

We already know APIs expose information to the public.  When you shop on your tablet or mobile device using a retailer’s app, you may or may not be shopping through the retailer directly.  You may have heard of hautelook.com, or O.co (formerly overstock.com).  These sites use inventory APIs from multiple brand manufacturers and sell it through their own user interface.  Think of it as an online TJMaxx.  Name brand manufacturers produce too many products, then make the superfluous inventory available via o.co or hautelook.com.

Using APIs makes excess inventory available online in real-time.  Customers do not have to wait for brand manufacturers to ship the inventory to a TJ Maxx; it’s available immediately at hautelook.com or O.co.  Items are shipped from the brand manufacturers warehouse to the customer, greatly reducing logistics redundancy.

Bargain shopping sites are not required to have their own warehouse, or fulfillment process.  They may not even have their own ability to process credit cards or consumer profiles.  All they need is an internet connection, and the brand’s API key to create their own retail experience.

What hautelook lacks for a showroom, it makes up for with its digital marketing and direct email campaigns.  Its membership capability allows for detailed order history and click through history, offering metrics to the retailer in real time.  If a brand manufacturer needs to clear an item on the fly, the retailer’s API manager can communicate with O.co, who will then send a promotional offer to its members with a limited time offer.

Retail APIs have proven to be a game changer in the industry, enabling affiliates to deliver bargains and special promotions straight to the consumer.  Savvy shoppers receive the latest and greatest deals through the convenience of their smartphones and retailers are clearing their excess inventory at record speed.  Talk about a win win.