Dixons Carphone is an electrical and telecommunications retailer based in the United Kingdom and Europe with an estimated revenue of $15.3 billion annually (according to Owler). It employs over 4,000 people across nine countries and manages 2,300 stores under eight different brand names (as confirmed by Pawel Maszczyk, enterprise architect for Connected World Services honeyBee platform, when speaking of Dixons Carphone in his Mulesoft presentation Self-serve Everywhere: Enhancing the Telcos Customer Experience.)
How Dixons was able to leverage APIs to reach their business goals, exceed sales and operational targets, and create a whole new product line is a fascinating example of the impact a well-considered API strategy can have on an enterprise's potential future. This case study highlights many of the business decisions that need to be made to implement a successful API strategy. Dixons started with a clear understanding of their customer needs, worked with internal developers to reorient their architecture to enable new operational approaches to training and service delivery, and then seized opportunities to reuse the newly built APIs to create additional products and whole new business lines.
As a retailer, Dixons needed its staff to be familiar with a wide range of mobile phones, connected devices and in-car accessories. Staff also needed to engage with customers on an individual and personal basis to identify their pain points quickly and to help them identify which products would best meet their needs. With multiple brands and sales techniques, Dixons was collecting and aggregating sales and customer data in a number of different ways. Differences in sales techniques within brands and within stores meant customers were getting vastly different experiences, and they often needed to restart their entire shopping explanation each time they entered a retail outlet or visited online.
Speaking at the MuleSoft Summit in London in September 2016, Simon Post, CTO at Dixons Carphone, talked about how first the company needed to reorient its business and technical strategy to place the customer first. The buzzword "digital transformation" is often overused today, and it is rightly chided as almost meaningless lingo. The truth is, businesses do need to transform digitally, but they need to do this to be more customer-centric. Digital transformation is not the end in itself; it is the means to better respond, and even to pre-empt, what customers are wanting. Post says that Dixons "started with the customer." The company mapped customer journeys, benchmarked its performance and customer satisfaction against others in its industry, and tested its assumptions with existing customers.
Only after this analysis was complete could Dixons start to reorient its internal systems with APIs and create new products to modernize its entire enterprise, such as dashboards that measured customer journey analytics. Dixons's business goal was to improve staff engagement with customers by aligning all sales strategies with customer needs. The company's API strategy was based on how it could recompose its services, data systems, retail operations, and point of sale software to better achieve this business goal. Once that was done, the company could then introduce new products and innovations to staff, such as a new sales training approach built on gamification. This resulted in quicker training times and a more consistent shopping experience for new Dixons customers.
By first identifying the key business goal - which was to strengthen and extend customer relationships - Dixons was then able to introduce an API strategy that enabled the realization of this goal. In doing so, the company was also able to leverage APIs for other benefits. It was better able to connect disparate data and service systems (to track customer behavior), and they were able to create new products (such as sales dashboards and training gamification programs) quickly. These benefits are also aligned with the company's business goal.
As a result, the company saw huge improvements in its operations. Post reported:
- 36% increase in sales conversions
- 20% increase in customer satisfaction
- 5% increase in sales margin per transaction
- 65% decrease in transaction time.
Following the company's API strategy implementation, it also won the industry-lauded customer satisfaction survey for retailers in the United Kingdom in 2015.
Dixons discovered an additional benefit from this API foot work. By creating the API infrastructure, the company introduced a valuable new asset and created new expertise in the organization. The API platform itself began to be treated as a product, an approach recommended by James Higginbotham, author of A Practical Approach to API Design and founder of API consultancy LaunchAny. The platform helped Dixons increase sales, activate connections with product lines across its eight retail brands, and create IT that met business goals. The company found its API platform was adept at creating customer journeys and helping improve customer relationships (and sales) operations. In true API fashion, Dixons is now capitalizing on this platform as a new asset, and the company is now selling the platform (named honeyBee) to telecommunication providers, says Post.
A well-defined API strategy helped Dixons Carphone to merge best practices in digital and human interaction, says Post. "Customers want to trust digital recommendations" whether that happens online or on mobile, or on a sales staff's tablet in-store, he says. "But customers still need human interaction for reassurance and service. If you marry the best of human and digital, you get something unique."
APIs may well be about automation, digital product development, and increasing agility. But at its heart, a good API strategy is about recognizing the people behind the strategy's goals, which includes:
- The developers building the applications using a company's APIs and platforms
- The partners leveraging a company's APIs to conduct business more efficiently or to reach new markets and create new products
- The end customers who want their personal needs met, wherever and whenever they need support. (They are the most important group.)