One of the first API stories I ever heard was about the Charmin “Sit or Squat”
that identifies nearby bathrooms (along with ratings) to be used when bathroom emergencies occur while traveling. While not an API that earns direct revenue for Charmin, it provides value for Charmin customers, brand awareness, and yes, a few giggles for people who speak on the API topic.
Consumer products or Consumer Packaged Goods (CPG) companies want to drive consumer loyalty and purchases. But often they do not directly sell their product or at least direct sales is not their primary channel. So, the focus of the APIs for CPG is on driving sales through channels rather than direct selling, but also integrating with suppliers, distribution, and accessing data.
So, let’s explore how APIs are used in the CPG industry. Once again I’ll use the structure I previously introduced (here
). Mobile App Development
– Common mobile capabilities provided by CPG companies include:
- Basic APIs – product list, product detail/ingredients/nutrition, news
- Custom APIs: loyalty rewards, coupons/offers, push notifications, gamification, contests, product customization
- Mobile advantages include product locator with GPS directions
Let’s put some context around these examples. If a consumer has an app for a CPG product then they have indicated a significant interest in that product. So, the first thing the company will want to do is help them find the nearest store where they can buy it. This will involve APIs to identify the retailers that carry the product in conjunction with their GPS coordinates and potentially a mapping API.
CPG companies want to promote additional consumption. So, incentives for buying more (future discounts) through loyalty programs, games or contests are methods to promote consumption. Some companies promote customization of the products (mixing products together, putting pictures or designs on products) as ways to promote brand loyalty.
What APIs are available today in CPG? Here are just a few samples of public APIs:
- Indix - provides information and intelligence about products. Indix provides a Big Data and SaaS tool to support brands and retailers to access product data including descriptions, images, and almost real-time pricing information.
- Sendgrid - cloud-based email services also has a Web API that allows businesses to retrieve information about their account such as statistics, bounces, spam reports, unsubscribes, and other information. In addition, the Web API allows businesses to create sub-accounts and control the settings of these accounts for an OEM setup.
- Nutribu – aims to transform nutrition into a social experience. The Nutribu API provides developer access to food and nutritional data. Exposed resources include metadata describing users, products, ingredient groups, and more.
- SimpleUPC - lets users obtain food product information, nutrition, and high-quality images for use in their applications. There are over 120,000 products, 15,000 brands, and 5,000 manufacturers. The API lets users query any product by UPC, manufacturer, brand, or product name to return rich data. Users can also find related products by category or by using similar product lookup.
Besides creating Mobile Apps for their customers, there are many other areas where APIs can provide value for CPG companies.Partnering
– The obvious use case for CPG is partnering. On boarding retailers who sell your product, integrating their systems with yours for ordering/inventory/supply
are typical scenarios. You may also make your product related APIs available to partners who are writing their own mobile apps and want to include information on the products they offer – i.e. the products you are selling through them.
Additional partner opportunities for APIs include on boarding and integrating with distribution channels and suppliers.Public APIs
– In addition to the typical product comparison type use cases, CPG companies want their brand promoted by others. Examples include food product companies supplying APIs that would be used by other industries like party planning to promote their products. Or for clothing, travel or exercise apps might use the APIs to help their customers identify appropriate clothing for the experience they are promoting.Social
– CPG companies want to create a buzz about their products and react appropriately to comments on social media about their products. Companies can promote games/contests using social media APIs.Devices
–The use of beacons and near field communication (NFC) on the Mobile phone can provide an opportunity for CPG companies to engage the consumer. Here is a fictitious but very possible scenario that will become more prevalent as API usage increases. A CPG product customer for high quality ice cream has downloaded the product
app. The customer is on their way home from work and has arrived at the train station. A beacon identifies they are in the station and have the app on their phone and have opted in to obtain offers. APIs are used as follows:
- Obtain customer history and preferences
- Determine if opportunity exists – use APIs to determine train schedule and how long until the customer’s train, find nearest retail location that sells product, determine if there is time for customer to purchase before their train leaves
- Optionally invoke weather API to determine propensity to buy ice cream
- Invoke analytics to determine appropriate offer
- Push offer for discount on ice cream to customer if purchased in the next 15 minutes with directions to the retail location in the train station.
– Gathering data from social, mobile, commerce and devices can help improve products and enhance marketing efforts. Collection of the data can happen through APIs and accessing the data through analytics as in the example above where we determine the appropriate incentive to buy ice cream will also be done through APIs.
CPG companies use APIs to drive product success. APIs are used to promote a positive customer experience which includes product awareness, marketing, selling, enhancing customer loyalty, and managing the supply chain, distribution, and market analysis. These are all critical success factors for products, so as APIs are introduced for these purposes you should always put controls around them so that you know who uses the APIs and how much. With that visibility, you can manage change, introduce new versions, and protect your back-end infrastructure with enforced rate limits.
Connect with me through comments here or via twitter @Arglick
to continue the discussion. You can also read my earlier blogs