Digital product vs. digital channel. Do you understand them correctly?

No items found.

It's a morning like any other. The automatic door of one of your company's branches slowly opens and a new face enters - your potential client. He looks around the interior and hesitates to proceed to your colleague to see if you can offer him what he's looking for. However, he doesn't like the color of the carpet, is irritated by the unpleasant light from the fluorescent lights and air conditioning, and is accosted by other people along the way with requests to fill out several forms. So he turns on his heel and walks away without your employee being able to say anything to him.

You might also enjoy

Read more

In the physical world, such a situation rarely occurs. Those interested in your services who make the journey to your branch will usually at least listen to the offer from your staff, who can make a good impression on them in person.

In the digital world, however, you can lose a customer's interest after a few seconds. Knowing how to guide people through the digital channel is therefore crucial.

However, in order for companies and their employees to be able to reach potential customers through digital channels, guide them through the offer and ideally through the purchase, they first need to be able to distinguish between the basic concepts - digital product and digital channel or e-commerce and digital business. This will help them properly address the technical and organisational changes that online services require.

[.infobox][.infobox-heading]What is a digital product?[.infobox-heading]Simply put, it is a product or service that can be sold online, in accordance with applicable legislation and regulation. But it's not just purely intangible products like music or film - a digital product can be almost anything - like insurance, electricity or a feature in your car. Digital is a product in that it would not work or could not deliver significant value to the client without the online space, it is not achievable with products in traditional distribution - instant availability, for example.[.infobox]

What is the relationship between a digital product and a digital channel?

The digital channel is always closely related to the digital product. If we borrow a parable from literature, we could understand the digital product as the content and the digital channel as the form or the way we communicate the content in the text.

Digital channels allow companies to communicate with customers in the online world and influence the form of that communication. This is because we communicate differently with clients in a branch than we do through a company website and differently through a call centre compared to a chatbot. Digital channels primarily focus on product acquisition and service, the customer-facing part of the process. And if the (digital) product is to be successful and deliver value to the company, the digital channel needs to be tailored to it.

However, in order for this value to be created, it is also necessary to distinguish between the approach that is typical for building and running e-stores and the actual digital business.

Oldřich Kotas

Why is e-commerce not the same as digital business?

While e-stores offer "pre-digital" products and their use does not bring additional value beyond saving a physical visit, possibly a larger selection of goods, a digital business builds products qualitatively differently to take advantage of the unique opportunities the digital world offers. This includes what happens inside the business - that is, the integration of the digital product with the inner workings of the company that offers it and the technologies that underpin it.

So, for example, if a company chooses to digitise its contracting, it needs to invest in adapting the website or other digital channels through which it offers the service, as well as in adapting its processes, internal controls, reporting, contracts and signing, and its KPIs. They are guided by two main factors in this case - the legislative and regulatory requirements for selling that type of service in an online environment, as well as business vision and requirements. However, both e-commerce and digital business have one thing in common - they deal intensively with user journey (UX) and customer experience (CX). Both are starting to dominate customer behaviour and are often more important than the parameters of the service itself.

A digital product is never finished

For a digital product to be profitable for a company in the long term, it requires constant improvement and continuous investment.


Research shows that most people compare a company's online service to the best digital service on the market - regardless of the industry in which the company operates and where it may be ahead of other companies. The attractiveness that a digital product brings can easily be trumped by competitors who invest in optimizing their product and distribution with fresh information and improvements in the next period.

In the online world, within the first year a competitor can come in with their own version of a digital product and channel, typically built better by the insights from your operation. Even without this, however, the product and channel can age within 2-3 years to the point where they no longer match the new social reality, level of online applications and marketing narratives, and thus no longer offer the best customer experience in the market.

Those who no longer want to go to branches today expect to be able to get all their requirements sorted quickly and online, as other organisations, albeit in different industries, already provide that option to their clients. Another type of expectation that arises from the best digital experience in the market may be the need for customers to see live whether their request is being processed on the other side and what status it is in - similar to ordering a taxi on the Uber app and then seeing on their website's online map where the driver is and whether they are heading in your direction.

That's why the product and its distribution always need to be tuned as much as possible to the capabilities of digital channels, and both optimised and continuously monitored with the main goal of constantly improving performance through UX optimisation and the proposition itself.

Written by

No items found.