An Application Programming Interface enables multiple applications, devices, and servers to share and receive information so ‘tasks’ can be completed. In eCommerce, an example of a ‘task’ could be checking stock levels, processing payments, or updating customers on their order status.
We interact with numerous API’s each day without even being aware of it; each time you pay for something on an eCommerce site using Paypal is a prime example of an API in action. Besides making the life of a consumer easier, API’s also enable companies to track data, detect errors, drive growth and improve communication between all departments within a business.
How Is An API Used In eCommerce?
IKEA has an eCommerce site that uses an API to process payments. When a customer makes a purchase on their site and submits their card details on the payment page, IKEA will use an API to send the card details to another application for verification. Once verified that application will communicate back to IKEA to give the go ahead and confirm the order.
You can see that this dialogue between these applications (an application being a piece of software) is reciprocal, meaning that it is a two-way communication. If the card details are incorrect this will prompt IKEA to put the order on standby and ask for alternative payment details. This is just one API in a long and complex chain of actions that seamlessly take place in the background enabling IKEA to process, organise, and ship orders. As API’s are automated, there’s no need for human intervention and the transfer of data is instant, helping the customer process the order in as little time as possible with no time to rethink the purchase or change their mind. Once the initial transaction has taken place there is a domino effect that sets into motion a series of API’s to fully complete the sales order process.
A customer’s address will be stored within the Customer Relationship Management (CRM) Database and stock levels are updated within the Enterprise Resource Planning (ERP) Database. If there weren’t an API connecting these two independent databases then the departments would need to communicate with one another to gain access to the information, or waste time logging into numerous databases to trigger actions that enable the next action towards completion to take place.
How Can An API Streamline My Business?
An API improves the connectivity between different devices and applications, this interactivity is what enables departments within an organisation to communicate more effectively and access the same sets of data in real time. Automating internal operations can condense composite tasks into smooth-running processes that save team members hassle and free up their time to be dedicated elsewhere. Human driven tasks such as sending refund emails or order confirmations can be managed by an API with the guarantee that the correct email will go to the correct recipient, instantly.
These are just a few examples of how an API can be used to improve both internal and external communications within an eCommerce Business, increase efficiency and drive growth. Activ8 is a primary example of how an API solution can enable a finance team to “analyse data and spot opportunities” for further business growth.
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With an API in place the system can automatically extract the product ID from the web server, the delivery address is identified within the CRM System, the nearest fulfillment centre is automatically located and informed of the order. This then updates the warehouse stock levels on the ERP system, the order is then packaged and sent to the customer. Considering that successful eCommerce sites have countless orders per day, or in some cases per hour, it would be impossible to complete the entire process in a timely manner, and would also welcome the inevitable risk of human error.