E-commerce trends for 2021 – how APIs are transforming the e-commerce industry?

Published : 3 years ago, on 08/09/2021

By James Hirst, COO/Co-Founder of Tyk

Retail businesses have seen irreversible changes over the last few years. Online shopping has been a critical part of the retail sector as consumers sought ease and convenience. And despite e-commerce and online retail being well-established before the pandemic, the last 18 months have highlighted the challenges of keeping pace with changing consumer habits and demands. Add to this the fact that rising consumer demands with regards to their online experiences, and loyalty are at an all-time low, retailers need to ensure they’re ready to adapt.

The changing face of e-commerce

In the early days of e-commerce, customers engaged with online stores through their desktop computers. Over time, this has shifted to a variety of devices from smartphones and tablets, to smart speakers, watches and even refrigerators. Ultimately anytime a customer has an internet-connected device, there is the potential to engage in e-commerce. And connecting these various devices into a seamless shopping experience requires APIs and proper API management.

As omnichannel engagements flourish, this has led to another trend in e-commerce: headless e-commerce. Platforms that offer e-commerce capabilities are no longer required to provide a storefront. Instead, they offer a “headless” experience for e-commerce vendors by offering all the necessary API operations to support the full e-commerce experience.  Customised interfaces may be built on top of headless e-commerce platforms to meet the needs of customers on any device.

Users are no longer restricted, and e-commerce engagements happen anytime, anywhere, on any device.

The role of APIs in building better experiences

But e-commerce requires more than just an online store designed for omnichannel engagements.

Personalisation and building loyalty with customers is critical, especially when it’s easier than ever for customers to move to a competitor. Knowing as much about the consumer is key, and when done well, leveraging third-party solutions that offer insights into their interests is necessary. APIs that support this, often powered by machine learning, can help convert product reviews into sales from popular social media platforms and power various collaborations between service providers, vendors and your e-commerce platform.

Meanwhile, behind the scenes, APIs are key to driving automation and scaling productivity.

Retailers, who can use automation to drive operational efficiency, improve business processes, and more, are turning to microservices to build new customer experiences rapidly. Add to this changing consumer preferences and the desire for cheaper and faster shipping, e-commerce sellers are pressured to have logistics operations that will deliver and communicate with customers.

Today, different vendor partner/supplier systems connect via APIs to exchange relevant information in real-time and access key data from ERP systems to relevant stakeholders. It significantly reduces the volume of support requests and time spent on mundane data updates, and ad-hoc communication and vendors can update milestones and communicate delays in real-time, enabling better planning down the supply chain.

Driving growth and innovation in the retail industry

Digital adoption can make companies more efficient and organised, but business process transformation that happens in small developments can have great impact. We estimate e-commerce stores require at least 25 APIs to integrate marketing, ad management, omnichannel experiences, inventory management, shopping, payment, fulfilment, shipping and returns processing.

The number of APIs may be 50+ to track customer browsing habits, newsletters, drip campaigns, sales tax calculations, fraud detection, cloud hosting, and many other operational requirements in supporting an e-commerce platform. This introduces several challenges to API management for those operating an e-commerce platform.

Role and challenges of API management platforms

Given the large number of third-party APIs that e-commerce platforms must integrate, monitoring and managing these integrations is important. An API reverse gateway can be used to protect all outbound traffic to third-party APIs and to avoid sharing sensitive third-party API access tokens with developers and server infrastructure by allowing them to manage the third-party integration on their behalf.

With various in-house and external API integrations required, having a complete view of your e-commerce operations is not easy. Therefore, unifying data across these disparate data sources is essential to monitor your operations. There are now solutions emerging from combining these data elements into a single API to provide a 360-degree view of your customers and operational requirements. GraphQL-based APIs are one method of offering this consolidated view with a universal data graph (UDG).

With API adoption picking up in the e-commerce industry, making it easy to access information in a simple yet powerful way. The right tools and API management, like an API gateway coupled with a dynamic API programme, could further drive growth and innovation in the industry and help retailers adapt to changing consumers habits and needs.