Developers' new opportunity: Retailers' open APIs

To compete with the likes of Amazon.com and Wal-Mart, retailers are turning to developers to boost their competitive advantage

Retailers have long relied on a wide range of individuals to get customers into their stores and products off their shelves, from salespeople and floor managers to display designers and market analysts. But increasingly retailers are providing opportunities for a very different kind of worker: software developers.

Twenty years ago, brick-and-mortar retailers were only just discovering the Web as a vehicle to reach customers. Websites were seen mainly as extensions of ad campaigns in other media: They spoke and customers listened. But today's "clicks and mortar" businesses view the Web as much more of a two-way affair, and their technical savvy is growing. In addition to such Web 2.0 features as blogs, RSS feeds, and customer forums, retailers are opening up their systems to outside developers like never before, by offering public APIs that provide real-time access to business data.

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Naturally the largest retailers are leading the way, particularly those that already have a strong Web presence. Amazon.com, the biggest online-only retailer, provides more than access to its retail systems. It also spun out a version of its massive IT infrastructure to offer storage, application hosting, and other services.

But smaller businesses -- and ones less grounded in the Web -- are getting in on the act as well. Zappos, a fast-growing online retailer of clothing and shoes, launched an API pilot program in April. And in February, Sears, which published its first retail catalog in 1888, announced a developer program of its own with two APIs. If this trend toward data transparency continues, which seems likely, it presents an emerging opportunity for software developers in the retail sector.

New solutions for a new retail market
The changing nature of the retail business is, at least in part, driving these companies to invest in software infrastructure. For a small retailer with a single store presence, nearly every transaction is handled on a person-to-person basis, whether it be marketing, sales, or order fulfillment. As businesses grow, however, automation becomes increasingly necessary. For a modern "big box" retailer with a nationwide presence, it is essential.

Consider Amazon.com, which operates no retail stores. Lacking any in-person interaction with customers, it must rely on ever more creative means of engaging them over the Web. Public APIs are one way to encourage outside parties to develop those methods, in much the same way that open source can breathe fresh air into an in-house development project.

Much like Amazon.com, British retailer Tesco, the world's largest after Wal-Mart and France's Carrefour, offers a bewildering array of products. And like Amazon.com, it has been developing APIs for several years, in hopes that independent developers will find new ways of presenting those products to customers.

Just who are these retailers hoping will use these APIs, and for what? According to Sears, apps for mobile devices are a particular interest. As smartphones become more ingrained into daily life, Sears wants to be on the forefront of location-based shopping and other emerging technologies -- whatever form they might eventually take.

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