Best Buy’s API Strategy Goes Way Beyond Social, Mobile

Written by Evan Schuman
November 6th, 2008

Forced to try and boost revenue in a tight economy, Best Buy is pushing an aggressive plan—based partly on open APIs—to sell to customers wherever on the Web they’re hanging out, rather than trying to get them to virtually travel to the retailer’s online storefront.

At a glance, Best Buy’s efforts sound similar to the social networking site widget efforts pushed recently by rival national pizza chains Pizza Hut and Papa John’s. But Best Buy’s plans are far more adventurous; the retailer envisions pushing its content out to mobile, blogs and video sites in addition to social networking sites. But the company also plans to create wiki-like rich content by leveraging what one Best Buy exec dubbed "150,000 tech-savvy employees, some 65 percent of whom are 16 to 25" years old.

The original open API concept is to simply take all of the product-related content Best Buy already creates for its own site—including product images, descriptions, user comments, availability data, etc.—and make it available for free to any blogger, social site or smartphone developer who wants it. In theory, this would encourage people to post content in relevant places. For example, a blog discussing high-definition televisions could allow people to purchase such devices from that site.

"Our customers are going to expect us in these new places," said Michele Azar, Best Buy’s VP for emerging channels. Dave Micko, a technical lead in Azar’s group, went further: "Our vision certainly extends beyond blogs and social sites. The foundational data can flow into all sorts of places, from mobile to your TV or your car or even your bathroom scale."

A Best Buy slide presentation also references enhanced planning/assortment widgets, rating data, product finder widgets and shopping assistants.

This approach isn’t new, but Best Buy is one of the largest players and is at least discussing taking it farther than most.

Jon Crowe is the enterprise technology services director at Cabela’s, a $2.35 billion outdoor lifestyle chain. Crowe said that his team has debated such efforts and thinks the potential is huge. "I think that, in the future, over the course of the next 24 months, social sites and blogging will become much more prominent" and the false perception that pushing content out would only appeal to younger Generation X and Generation Y consumers will go away, Crowe said, referring to some sporting sites that have older consumers. "It certainly makes a lot of sense, and if you can expand your sales channel touchpoints and do it without watering down the brand, that’s something you want to take a serious look at."

At the same time, though, Crowe said that he is "not sure it fits very well today for Cabela’s" and part of that is the fear of a lack of control. With that lack of control comes the very real possibility that some consumers might have some bad experiences—which the retailer has no control over or even awareness of—and that the retail brand will be blamed.

"If you drop your widget on, let’s say Facebook, and there is a problem, that’s not going to be perceived as Facebook’s problem. That will be perceived (by customers) as Cabela’s problem."

Best Buy’s Azar concedes that branding issues have to be reconciled with this new approach and adds that Best Buy is debating how closely it will want its brand associated with non-Best Buy-controlled sites. "We’re not putting our brand on all of this. We’re enabling people to build on top of our data," said Azar, adding that an affiliate model has been discussed, including wording that might say something like "powered by Best Buy."

"The ‘powered by’ is one scenario," Azar said. Best Buy recently toyed with another experiment where the Best Buy brand is being kept out of the spotlight, with that trial involving a gift registry. The multi-vendor gift registry effort had a different reason for keeping the Best Buy brand off, because it would have been seen as more credible without the $40 billion chain’s brand all over it.

Best Buy’s Micko, though, said the arguments about lack of control or branding are irrelevant because the data is being taken already—without permission—and slapped onto everything from eBay listings to mom-and-pop storefronts to tons of blogs and social sites. Often, these screen scrapes are distributing information that is out-of-date or otherwise seriously flawed. In other words, there’s no longer an option to keep the content safely on a corporate site. At least if Best Buy is distributing the data, it has a better chance of being accurate, which reduces the percentage of consumers who are injured with bad data. "My personal belief is to let it flow freely. It’s already being (taken) and it’s already being done poorly," Micko said.

Azar added one recent example, where a site published a physical address for customers to pick up one electronic device. The problem? The site used Best Buy’s corporate headquarters address. "With or without us," the data will be grabbed and used, making the decision more about whether the data will be more accurate, Azar said. "Do we choose to miss that opportunity for brand engagement?"

An API management services company called Mashery is working with Best Buy on its free API strategy, and the company is seeing quite a few companies exploring ways to get their content far away from their physical—and virtual—arenas, according to Mashery CEO Oren Michels. For brick-and-mortar managers, selecting store locations is straightforward: "You find the people who want to buy your stuff and you put a store there," Michels said. The free API approach is simply taking that approach and applying it to E-Commerce.

"It’s a lousy idea to take your online site and just add product to it. You want to take your store and go to your audience" especially if it’s sites "where people didn’t necessarily go to go shopping."


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