Why Mobile First Really is API First: McKinsey's South Korean E-Commerce Insights

[This article was written by Manfred Bortenschlager.]

According to the very recent McKinsey & Company Insights publication Learning from South Korea’s mobile-retailing boom(May 2015), South Korea has a the highest smartphone penetration in the world. What is especially important for retail is that South Korean consumers spend almost equally as much on goods purchased via mobile devices as in actual stores. This naturally makes smartphones very attractive as additional channels for retailers, and retailers more and more are beginning to devise omnichannel commerce strategies.

The authors of the McKinsey & Company article very correctly point out that “although all digital channels might share the same backbone infrastructure […] m-commerce requires fundamentally different approaches to identifying, reaching, and satisfying consumers.” The principles of Web shopping behavior cannot simply be assumed for shopping via smartphones. The authors also offer advice on how to address four critical areas to successfully tackle m-commerce:

1. Reach: This is basically about marketing and understanding that mobile users most likely share different demographics and desires, and communication must be adapted.
2. Curate: Purchasing decisions are made differently on smartphones. People tend to decide for or against a purchase based on impulse. The messaging and content presentation is key and needs to be very sensitive to the consumer’s context.
3. Entertain: Having a top shopping experience, including convenience, is rated much more important than price by mobile shoppers.
4. Lock in: Consumers who purchase goods via smartphones tend to be very loyal and tend to make vendor decisions quickly.

While we agree with these observations and the very interesting figures and case studies presented in the article, we would also like to add a crucial piece of implementation advice. The authors refer to mobile first consumers and highlight the importance of mobile apps. For an omnichannel commerce strategy this is misleading. If retailers – or any other organization in other verticals – start to implement their systems with a mobile first approach, they will end up creating systems that will be incredibly hard to maintain. Focusing too much on channels (like the mobile channel suggested by mobile first) creates a too tight coupling.

Our advice – rather than start mobile first – is start API first. This means first identifying the crucial services and data that are valuable for users. Then, creating channel independent interfaces (APIs) allowing controlled access to these services and data. Finally, only the front ends (Web, mobile or any other channels like IoT) need to be customized accordingly. In other words APIs are used to create channel independent platforms. Any channel can be build on top of a platform (see also our article The Unseen Enablers of Platforms: Interfaces and Access).

In fact, our own research about the main drivers for using APIs and API management includes enabling mobile channels, increasing reach and distribution or growing customer ecosystems. We describe these drivers in detail in our ebook Winning in the API Economy.