What Is the Value of API?

Moving to API will cause disruption, but information sharing can open doors to opportunity.

By Erin Del Conte, Senior Editor

Today, it’s hard to take two steps without hearing about API (application programming interface), but what is it and why is it important for c-store retailers?

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API is “the way for a machine to talk to another machine,” said Jason Lobel, CEO & co-founder of SwiftIQ, an analytics solutions provider, who spoke on API at the NACS State of the Industry conference this past April. In other words, API is a connection.

As Daniel Burrus, technology futurist and best-selling author of seven books, told me, “we have islands of information at companies and that makes a disconnected world. Part of the disconnection is the competitive advantage in keeping the data to yourself, building a strong brick wall around it, making it secure and making sure others can’t access your data. Increasingly, if you want to increase the power of software and applications for people you need greater access.”

To understand API, just think of Amazon, which allows third parties to connect to Alexa, its multi-billion dollar super computer, using an API.

“You can access Alexa and plug your data into it using an API, so you can serve your customers with your data using that special connection that’s not tied to hardware,” Burrus said. Companies can also take the software, API and chip set and put it in their own type of Alexa. For example, a company that makes smart thermostats could use this API to allow people to say “thermostat, increase the temperature two degrees,” and it will.

Lobel noted Extensible Markup Language (XML) used in the c-store industry is one language with which to read something from a machine. However, APIs allow you to expose data in a variety of different types of languages. “It’s like a Rosetta Stone,” he said.

APIs allow data to be accessed from a system without actually having to pull it out of the system and store it on your own system. The cloud not only allows us to process data anywhere but also to access data quickly from anywhere because of the APIs built in.

While you could send somebody XML and allow them to read it, APIs don’t have to be read only, Lobel explained. Information can be transferred back and forth. Think of how APIs are used to allow Google Maps to be accessed by Uber and iPhone. If I’m waiting for my Uber and move to a new location, that data automatically transfers to the Uber driver through an API.

Moving to a more sharing-based API system will cause disruption for legacy providers of everything from loyalty to point-of-sale systems. Burrus encourages operators and providers alike to ask, “Is protecting and defending in a proprietary system keeping you from making money and growing faster?”
“The old way to have power was by keeping things to ourselves. Today, we’re not gaining power by hoarding, but by sharing,” Burrus added. He pointed to Apple and Sony, which formed an alliance in the 1990s so Apple could learn to make better laptops and Sony could make more user-friendly software. It allowed both to thrive. By contrast, “defending didn’t work for Blackberry and Kodak.”

Sharing through APIs doesn’t mean giving away access to everything, but partitioning and giving access selectively.

“I give you access to the data that would make our relationship helpful, but not to proprietary information,” Burrus explained.

Today, some stores auto purchase items when they are running low, but that system isn’t open. APIs could take that to the next level, connecting the warehouse, supply chain, delivery drivers, allowing instant ordering, showing the retailer the transit map and delivery time—in other words, creating a speedy, seamless experience.

Burrus noted many cities are creating open API connections to all city data. You can develop apps that tie into the data, making use of bus routes, airports, populations, the economy. C-store apps could offer customers this added value for traversing the city when away from the store, so they use the apps more often and then return to the store.

It could also be used to aid cyber security.

“Imagine if all c-store operators in the world shared when there was a cyber breach and what happened so all stores could learn and take anticipatory instead of reactionary steps,” said Burrus. “The more we keep to ourselves the more we have problems because we aren’t learning.”