Enhancing your product with a digital layer

Digital technologies are changing industries, the market, how businesses operate, and how customers behave. In a world where people increasingly use the app for almost everything and convenience is pivotal, users’ relationships with products are defined by the tools that accompany them. As a result, companies increasingly ask how to digitize their activities or provide a unique online experience that would enrich their existing, more traditional offer. For those who manufacture analog products, it means changing the business mindset and adding a digital layer to the inherently physical experience.

Is it always worth doing? How to go about strategic change and digital product development? We invite you to read this article to learn more about enhancing your product with a digital layer.

I. Product experience and product digitization explained

It is a common misconception that a business should focus either on the customer or the product. This is not the case as long as ‘experience’ becomes a common denominator. Customer experience and product experience have become equally important in the digital age, and while the terms’ definitions overlap, there are significant differences between them.

Customer vs. product experience

The customer experience is made of two components. One concerns interactions with a specific business or brand’s touchpoints: products, services, operations, support, website or application navigation, social media, etc.

The client will develop feelings about the brand and perceptions of your offer based on these interactions. These emotions and attitudes towards the business make the second component of the customer experience equally, if not more, important. Everything your brand does or says influences the client’s perceptions, so your actions hugely impact the product’s success. Why?

• Positive experience increases customer loyalty
• It increases profit: 61% of customers are willing to pay more if they get a good experience.
• It improves your brand’s image: 49% of clients reported leaving the brand due to poor experience.

Customer experience encompasses its integral part – a product experience (PX). While the former focuses on all interactions with the company before, during, and after using the product, the latter concerns the product itself. PX is composed of interactions with a product, the user’s perception of its design, functionality, features, and quality, and the fulfillment of promises made by the producer. PX concerns the journey within the product itself – from download to onboarding to usage completion.

EXAMPLE
Apple provided an excellent example of advertising centered around the product experience when introducing the iPhone 13 Pro. The visual ad presents the product, its capabilities, and its usage while putting particular weight on the fact that a phone is only a mere tool whose real purpose is to create stories and movies and capture unforgettable experiences. When watching the ad, one starts to focus on what they can do and record with the phone rather than on the product itself.

The feelings arise, and the emotional connection with a brand is made.
Youtube: Introducing iPhone 13 Pro | Apple

The most important question: Why is the user’s personal experience crucial for product innovation?

We’re witnessing a near-complete market saturation (or oversaturation in specific sectors). The product or price is not a distinguishing factor anymore, with many companies offering the same. To stand out, a brand must provide a unique experience in addition to its ‘replicable’ product.

Hence, businesses must reconsider their interactions with clients – from the point of view of sales, marketing, and customer service strategy.

EXAMPLE
August Home creates automation solutions for household security, namely door locks, and doorbell cameras. They created the first smart lock in 2013, but it was in 2020 that they brought their game to a new level. That’s when the company introduced the August Wi-Fi Smart Lock – the feature-packed lock accompanied by built-in Wi-Fi. While there had already been smart locks on the market, they usually relied on Bluetooth connection as the network’s bridge. With the option of built-in Wi-Fi, users can reach the device from anywhere using the dedicated app and even grant access to other people sending them virtual keys via email.

 

The benefits of blending physical with digital

• It can give your business a competitive advantage. Rapid technology changes and product copying happen so quickly that companies must constantly adapt. A good practice is, however, not to throw all your money into risky new businesses. Instead, focus on the advantages of your core offer and enhance it with changing digital add-ons when the need and opportunity arise.
• It strengthens the core business and creates new streams of revenue when you approach a digital-first clientele.
• You develop unique capabilities that the competition cannot copy and satisfy consumer needs for the beneficial physical-digital experience.
• It helps you build a team of digitally-savvy specialists under a digitally oriented leadership, which will positively influence future market operations.

 

Digitally augmented products

An augmented product is one with features or services added to distinguish it from similar offers created by competitors. It’s made of three components

• The core product is a benefit the buyer gains with the purchase. For example – sportswear makes you feel better and look cooler.
• The actual product is the object that you sell, like sneakers.
• The augmented product adds something new to make the offer stand out and increase its perceived value – the reason the customer decides to buy it. If we stick to sportswear, the augmentation element could be a funky application that lets you choose, mix, and match your designs. In the case of physical products, where the augmentation is made by adding the digital layer, we’re talking about product digitization.

 

II. Strategic change – business and mindset transformation

A company facing digital transformation must adapt its business model to the new digital reality. What’s important is that this process is driven by the customer and his consistent experience, as explained in the previous chapter.

The change happens when the company decides to integrate technology into all areas of its business – products, services, strategies – and focuses on specific goals: improving customer experience (CX), content accessibility, internal cooperation, or position on the market.

Adaptation to digital reality requires the transformation of the business model and processes and the company infrastructure (the way the data is stored and shared). Moreover, internal culture must be adapted, staff educated and the focus must shift towards digital. All these amendments are based on the choice of the new domain and digital experience that will become the center of the company’s activities.

 

Preparing your company for product digitization

Here are the steps to optimize your company’s processes, transform products, and create a digital working environment.

1. Determine what digital change means for your business.
   Determine what digital change means for your business. Do you want to change your organization’s operations, develop new products, or enrich existing physical products with additional digital layers?
2. Define your existing strategy and assess your capabilities.
   Think of where you are today, and evaluate every aspect of your business, from social media to the website to management processes. Identify gaps in leadership, technology, operations, data management, customer experience, and the company culture.
   • Technology assessment. Ask yourself if you need any updates to the technology you’re already using, whether you have ideas for improvement, and which solutions your company could use in the future. Then, ask a crucial question: – do you have the right people to upgrade or introduce new technology?
   • Data management assessment. Check what data is being analyzed and which solutions are used for such analysis. Identify the information gaps to be filled.
   • Customer experience assessment. Before you move on with the process, see how you communicate with the customer, how many channels you are present on, and whether you have information concerning the level to which the company fulfills the customer’s needs.
   • Operations assessment. Is there anything you can do to improve your company’s operations? Have you automated processes, if needed?
3. Create the strategy. 
   Build on your strengths – existing customers, products, and an established brand image – and introduce new policies. Define goals and consider how different processes will be conducted in the company.
4. Make sure you have the right skills in place.
   Switching to product digitization depends on technological advances, often by cutting-edge solutions, so it’s no wonder your staff may lack appropriate skills. Assess the preparedness of your team for the change. If needed, invest in new resources and training or partner up with a company that will help you through the transition. Create a technology roadmap and identify which solutions you need to implement to your processes and products.
5. Reimagine customer journey.
   Customer experience is your number one priority for digital transformation. Your ultimate goal is to introduce new products and services to improve the experience and add more touchpoints. The journey to using a digitally enhanced product will differ from the one associated with a physical experience. Reimagine the steps, channels, and communication options.
6. Personalize the customer experience.
   75% of customers will buy from a company that saves their name and purchase history and recommends products based on past actions.
7. Go omnichannel.
   Today, customers interact with a brand on many channels simultaneously, and everything happens in real time. It makes it easier for clients to receive the support or service immediately and for you to create a comprehensive digital customer profile based on digital touchpoints’ analytics.

EXAMPLE

Ford as an example of a successfully executed company and product digitization

Ford is one of the prime examples of a company that introduced digital transformation initiatives on many levels. For starters, they improved the manufacturing process in factories by presenting the Material Flow Wireless Parts replenishment system to track the quantity and availability of different elements. The inventory process was made easier with a newly installed wireless infrastructure that allowed for quick notification exchange along the production lines.

 

III. Digital product development

Product manager vs. product owner

Before going to the phases of development, let’s clarify two important roles in the process – the product manager and the product owner. The two titles are sometimes used interchangeably, but the people who hold them focus on different things. Not every business and product development team will employ a product manager and owner separately; quite frequently, their tasks are combined. However, it’s good to understand what these team members do if you come across a bigger team with the two roles separate.

Product manager – discovers user needs, creates a long-term strategy and roadmap, makes decisions about the features to be added, and aligns the team, partners, and stakeholders around a shared vision. His role is customer-facing; ultimately, he considers what products or product enhancements to build next. He focuses on the strategy, vision, and market trends and identifies new opportunities.

The product owner – focuses on maximizing the product value. Takes care of the backlog, organizes production processes, and ensures that the work is aligned with the roadmap. His role is mostly product team-facing. Notably, he is responsible for managing the technological stack and should be able to provide insights into solutions needed for developing new products or features. In addition, he translates the product manager’s vision into actionable tasks.

 

Digital product development process – steps explained.

As many as 49% of all companies don’t adhere to an established development process but make no mistake. This is not an example to follow, as at least half of them fail to deliver a product that would be tailored to customers’ needs. What you want to avoid is creating a product designed for no one that doesn’t fit your budget and doesn’t align with your business goals. We will shortly explain the main stages of the development process.

Product development stages

1. Discovery phase part I – exploration

Whether you’re looking to expand your business, build a new product, or add a new layer or feature to an existing one, you first need to understand what you create, why, and who the end user is. Thus, the discovery aims to establish product-market fit, identify user needs, and find the right solutions that respond to them. To put it differently – the discovery phase is about minimizing risks:

• Value risk – whether customers will be interested in the product
• Usability risk – whether they will know how to handle the product
• Feasibility risk – whether you have a team in place that can deliver the project
• Business risk – whether this is a good solution that will benefit your company in the long run

So, how do we assess and mitigate those risks? Before diving into the process, it’s worth asking several questions regarding the problem, solution, and business space.

The problem: What is the problem? Who are the users who face it? What are their demographics? How are they dealing with the problem now?

The solution: What is wrong with the current solution? What is the added value of your idea for the customer? Why would he use your product and not that of the competition?

The business: What value will the product add to your company? Does it align with the overall business goals? What budget is needed? Can you effectively monetize the new idea?

Aligning your team’s and stakeholders’ vision

First things first – you need a multidisciplinary team that will be accountable for successful product delivery. From the beginning, it is best to involve those responsible for project management, development, and user experience.

Kick-off meetings

If you seek help from an external company like Develtio, you will typically first participate in the kick-off meeting. We organize those to establish a vision of the issue to be solved, shared by our team and the client, and agree on how we can tackle the problem and the following steps to be taken. You can learn more about how we do kick-off meetings here.

As a result of the meeting, we will have a shared understanding of the desired end goal, the project’s background, its broader market and social context, and preliminary proposals for achieving the defined purpose.

Discovery / MVP workshops

Workshops are similar to kick-off meetings in that they aim to help define the scope of the product, its goals, and the proposed solution to the user’s problems. Ideally, you will have an initial idea of the MVP at the end of the workshop.

Typically, the software development team invites the client for a meeting that can take a few hours to several days. The early stage concerns the product vision and strategy, mapping user groups, and establishing the unique value offered to the customer. It’s a perfect time to discuss anticipated user stories and personas and analyze the competitive landscape. Thorough conversations allow us to dive into the product functionality, user journey mapping, design mood, and visual vibe of the product. Such a meeting is invaluable, and we highly recommend organizing one for your project.

Some of the tools you can use during the workshops and throughout the discovery phase are, for example, value proposition and lean canvas, which are useful frameworks to present your ideas in a tangible format.

Youtube: Value Proposition Canvas

Research

Whether you do the research yourself or turn to the software development company, the team will usually use various techniques to establish the actual user needs. From surveys to interviews and focus groups to the creation of empathy maps, service blueprints, and user journeys, the methods can be divided into four categories:

• Attitudinal research – used to understand the attitude, helpful in the usability testing of performed actions.
• Qualitative research – based on observations, looks for reasons why users take specific actions in the way they do.
• Quantitative research – based on accurate data analysis, tells us, for example, what percentage of users clicked on a given button.
• Behavioral research – Tools such as personas or interviews allow us to understand what people think of the proposed product.

Source: http://blogs.quovantis.com/methods-of-user-research-based-on-different-stages-of-product-development/

At this point, it’s equally crucial to conduct thorough competitor analysis and market research to assess your product’s competitive advantage.

 

 

2. Strategy

You took the first steps in strategizing by figuring out the problem and ways to solve it and building the development team. Then, you can move on with the process with a clear idea for the product and think of the broader plan with specific KPIs and, eventually, the deployment plan. Consider the following aspects:

• Goal setting
• Workflow prioritization
• Value proposition
• Budget
• Pricing, promotion, sales, content, and positioning strategy of the product (in cooperation with marketing and sales teams)

Product strategy essentially concerns how you want to win the market with your product.

3. Discovery phase part II – Validation, Ideation, and prototyping

Ideation is the stage where you move from the problem to the solution, considering the input gathered from kick-off meetings, workshops, and research. At this point, you will brainstorm and use storyboards, customer journeys, or mind-mapping techniques to decide which characteristics and features can improve your product’s usefulness and ability to solve defined problems. Based on that, the team will ideate the product’s Information Architecture, which concerns organizing and structuring content effectively (mapping all the features and elements of the user flow).

Prototypes allow you to bring ideas to life before diving into the complicated development phase. You can read about Develtio’s approach to wireframing and prototypin here. The main goal is to create a simple, yet preferably interactive, version of the product with specific features, present its structure and functionality and gather feedback while involving all stakeholders in the evaluation process.

An example of a plan for a discovery phase for a new product

Source: https://adaptmethodology.com/product-discovery-process/

Idea validation, and testing

Design sprints

A design sprint is a process that has been gaining wide popularity, used as a technique to validate and prototype ideas. Over five days, the participants go through different stages:

• Day 1 – Understand. Mapping out the problem, the goal, and the user journeys.
• Day 2 – Ideate. Proposing various solutions.
• Day 3 – Decide on the most viable idea and sketch storyboards.
• Day 4 – Create a workable prototype.
• Day 5 – Test with real users. Five is enough since you don’t have more time anyway.

This method is quick and intensive and gives you a general idea of the success rate of your proposals.

Idea validation and usability testing – examples by Develtio

This is the stage where you verify whether your ideas work and if the product concept is worth further development and, thus, financial investment. It’s also the time to perform usability testing on the prototypes you’ve prepared. The Develtio team conducted two notable examples of usability testing for our clients – RIP.ie and Biletyna.pl.

RIP.ie usability test report

RIP.ie is an obituary website that publishes death notices. We conducted tests to evaluate the new design in the mobile version, including the navigation menu, added sections, and enhanced layout.

Biletyna usability test report

Biletyna.pl is a rapidly growing online event booking and ticketing service that sells tickets to 32,000 events annually. We were asked to develop a mobile application allowing attendees to search for events, manage bookings, buy and present tickets, and even share them with friends. For Biletyna, we prepared task-based tests to check the usability level of various proposed features concerning booking management, notifications, sharing tickets with friends, etc.

Depending on whether the client is planning to launch a new application or create a new product, we have to undertake different steps to prepare the tests. In the case of new products, we will create a design and carefully listen to the client’s initial comments. On the other hand, if we focus on the existing product’s enhancement, we will incorporate new ideas into a ready-made design.

In the case of existing products, we use tools such as Google Analytics to define users’ behavior flow and main touch points. We also create user personas with specific behavioral statistics to better understand the target audience (it’s an example of the above-mentioned behavioral research).

Next, tests are prepared and distributed among existing or potential users, after which we carefully analyze the output – statistics, user flows, interaction recordings, heat maps, and open-ended surveys. Finally, based on the gathered insights, we can either move on to the next stage, or you need to refine your initial ideas and perform tests of the amendments you introduced.

4. Development

Once we’re past the stage of high-quality prototype testing and the product skeleton and functionalities are agreed upon by the development team and the client, we can move on to the final, detailed design preparation following the insights gathered through testing.

And then, eventually, to the development phase of the project. Several conditions must be met to proceed with the development:

• Product-to-market fit is confirmed through user testing.
• Use cases were defined and tested, and the best solutions were chosen.
• Profit potential was determined, and monetization ideas were established.
• The best-suited technological solutions were agreed on.
• The strategy, including the roadmap and budget, has been set, verified, and the necessary resources have been secured.

The ‘developer hand-off’ is by no means synonymous with designers’ work ending right there and then. Designers and coders must work closely at this stage to ensure common understanding, the correct implementation of ideas, and the product’s technical feasibility. You can learn more about the design based on collaboration here.

 

 

5. Launch, iteration, maintenance, and growth

One thing to remember is that the product development process is, in fact, a cycle. Of course, a product launch is a moment everyone has been waiting for. It’s not as simple as putting your product online, however. If done well, it should be accompanied by a pre-launch strategy consisting of a social media campaign, teasers, promotion campaigns, pre-release reviews, etc.

Once the product is out in the world, the job is not done. You will get more user feedback and observe changing customer demands, environments, and competition. Use all the insights to constantly develop and improve the user experience and ensure the evolution of security, quality, and pricing, to match developing market trends. Launching the product is easy; staying competitive and ensuring business continuity and growth is hard.

 

 

7 common digital product development pitfalls to avoid

1. Not paying attention to real user problems. Assumptions and wishful thinking are your worst enemies. You risk ruining the project entirely if you’re too eager to launch a solution without checking if it’s solving any actual problems.
2. Assuming the product-market fit. So you have this brilliant idea for a digital product. But do you know if there is an actual place in the existing market for it and whether it will bring your company any profit? User testing, competition analysis, discovery and MVP workshops, or interest measurement are all methods that will help you establish market validation.
3. Not involving developers from the start. Your whole team needs to understand the problem and the product. Developers will provide technical expertise and ensure that proposed solutions and features are adequate and possible to create and implement (which is not always the case).
4. Skipping prototypes, early-on testing, and MVP. This is a grave mistake, yet one that can be quite often seen among various companies that tend to omit user experience and ignore the feedback from early adopters. Never assume that you know best and that constant opinion gathering is not essential to product development.
5. Consequently – ignoring received feedback. This is your primary source of information on whether you’re choosing the right direction for product development. Arrogance and focus on a kick-ass offer that serves no one means completely missing the point and potentially losing a lot of money.
6. Putting the features and technology first rather than focusing on the product. Always keep in mind that you develop solutions based on customer needs first. So your app or website should be accessible, easy to use, provide value to the customer and cover all the critical pain points. The dazzling abundance of features is not necessary; it overshadows functionality.
7. Relying solely on the in-house development team. You may hire a great group of professionals in your company. But technology and development are the areas that are constantly changing – new methods, techniques, and solutions emerge almost daily. Software development companies exist to follow these trends and changes and to ensure that they employ persons with the right skills to deliver even the most complex projects. This is not to say that you should not get involved. By all means, do. In Develtio, we rely heavily on ongoing collaboration and client feedback.

 

VI. Product experience upgrade – tips on how to effectively blend digital with physical

There are 4 trillion products released into the market every day from a huge range of industries, and the success of yours depends in equal amounts on the idea, opportunity, capacity, and vision. However, one thing is certain – to stand out, focus on upgrading the experience, not the product itself.

Designs by Develtio

 

The good news, with the right approach, tools, and customer-centric design in mind, you can beat the competition. A 2018 PwC survey showed that people value convenience, efficiency, and friendly and knowledgeable experience. Personalization and up-to-date technology were also high on the scale. Representatives of Gen Z paid more attention to the mobile experience, fun, and design than the general population.

It’s important that these factors, with availability and affordability, decide whether the customer will use a product’s physical or digital feature (and not the fact that it is or isn’t digital).

Here are some tips on how to effectively blend digital and physical attributes and enhance the existing product:

1. 1. Find a good use case to generate real value. Many products these days will have a mobile app attached to them to facilitate, for example, the usage or purchase of a specific product. But, you can think outside of the box and add a recipe app to kitchen appliances, a cookbook to the grill that you typically manufacture, or a virtual service allowing you to match the perfect haircut to the customer’s face if your area of expertise is producing and selling hair dye.Finding additional practical functionality is certainly not easy. Still, with the techniques such as discovery workshops, and market and user research, you have a chance to stand out in the market.
   2. Focus on analytics. What behavior leads to the use of specific features? Which features are used most frequently? What are the conversion and bounce rates? Gather product experience insights to find out what the users think, feel and how they interact with your product. Choose the tools that allow recording users’ interactions with the product.
   3. Analyze the customer journey to understand when and why your existing product is used, when customers leave it, and when they look for help or additional information. Knowing possible obstacles in the journey leads to the creation of better self-service.

4. Design matters, so make sure the digital element looks good and is visually consistent across all the channels (and aligns with the physical product’s look and feel). Users value the integrated omnichannel experience.
5. Try creating digital-physical workflows which will illustrate every interaction with the digital layer of the product and every action the user will take with the physical element. It will help you integrate all the features and make communication easy for teams dealing with online and offline experiences.
6. Stay truthful to the essence of the main object, and don’t overcomplicate things. Not everything needs to be controlled with the app, and not all products require a touchscreen. If the digital layer makes it more challenging to perform a task, don’t add it. Instead, focus on something that cannot be included in the offline design.

VI. Conclusion

Enhancing analog products with digital experiences is not always straightforward. A lot depends on your vision, market opportunity, and business capabilities. The digital change will be different for retailers and manufacturers. We provided examples of how different brands enrich their narrative and enhance existing analog products by investing in a unique experience designed for digitally-conscious customers. We also focused on the process of product development to ease your way into the digital market. Let us leave you with some main outtakes:

• Focus on improving the overall experience rather than the existing product.
• Customer and product experience should be the drivers of your business strategy.
• Invest in research and usability testing.
• In-house and customer feedback is a primary source of information necessary for successful product development.
• Be ready to change the initial vision of the product based on the feedback.
• Remember that online and offline customer journeys differ. Reimagine the journey for the newly introduced digital element of the product.
• Developing an app is easier than finding a good use case for the enhanced product. That’s why the discovery process is crucial.
• The business environment is ever-changing, so you need to constantly adapt your processes and products to the evolving digital reality.
• Customer experience is the compass that should guide your business’ digital evolution.
• Turn to professionals with the proper knowledge and skills to help you develop digital products.