A Guide to Digital Product Development: Benefits, Process, and Trends

In today’s tech-driven world, everything seems to be digitized, with a significant focus on digital product development by numerous large organizations. Nowadays, everything seems to be digitized in the technology-driven world. A number of large organizations are increasingly focusing on digital products.

Since digital products have changed how businesses operate, there has been an increase in the demand for innovative digital products. By doing so, they are able to overcome distance barriers and satisfy their customers. Nearly every growth-minded company today wants to improve its products by innovating and improving their value & usability. Here’s everything you need to know about digital product development.

What are Digital Products?

Anything you interact with through a digital medium is considered a digital product. This type of product can only be sold online and has no physical form. Digital products examples are web elements, guides, software applications, e-books, data & research, and music.

Digital products can be sold online via a variety of platforms, including a website, a marketplace, or social networks, such as Etsy, and Amazon. Since digital products do not require expensive physical overhead, they are a great way for creators to monetize their audiences.

What is Digital Product Development?

The development of digital products or digitization of existing products is referred to as digital product development. Among the most famous digital products are Microsoft Office and HubSpot. The goal of developing digital products is to create valuable mobile apps and web apps for end-users and to reach new markets through the use of digital tools.

Benefits of Digital Product Development

When your organization understands the benefits of agile development, it can make the decision to adopt it. However, what are the tangible benefits of digital product development? Check out some benefits of digital product development below:

Improved efficiency
Iterations and workflows can be made more efficient by using digital product development. The Digital Product Development 2025 report by PwC found that it increases efficiency by 19%.

Reduced market time
Getting to market requires developers to meet hard deadlines. Digital product development allows you to meet deadlines faster. In the PwC study mentioned above, time is reduced by 17%. As the market changes rapidly, this boost becomes even more important.

Cost reduction
Cost is a sensitive issue for every company. Businesses must evolve their products if they want to remain relevant. Now it’s about doing so at a lower cost. PwC estimates that digital product development can reduce production costs by 13%.

Fewer failures
There is no point in releasing a product that has bugs and issues. Focusing on testing and iterating is a good practice for finding and fixing errors before customers use it. Continuous testing and revision result in fewer failures when applications are launched.

Developing customer-centric products
It is important for every business to be customer-centric. However, it isn’t always easy. Developing digital products through agile practices is part of your company’s DNA. It is the foundation for all development activities when it is pervasive and valued.

Digital Product Development Trends

1. Most digital products will feature Artificial Intelligence

We have already witnessed an explosion of AI use in business with rapid advancements such as ChatGPT, DALL·E, and Midjourney. AI will increasingly be integrated into digital products as the year progresses. Furthermore, this integration will provide better customer service, allow market research to be powered, and automate monotonous administrative tasks. Many companies will use AI to power chatbots and offer more personal and relevant service.

2. VR integration

Approximately $252 billion will be generated from the VR market by 2023. With the growth of this market, we can expect to see more digital products integrating VR into their development.
Virtual reality will be used in the development of digital products to create immersive experiences for customers.

A greater number of companies will use VR to improve or create virtual experiences in-store. With the help of VR, Premise LED shows clients the before and after of implementing LED lights. Virtual reality will also be used extensively in employee training, primarily in healthcare, engineering, and defense. A company like ExxonMobil uses virtual reality for employee training.

3. The use of digital twins to merge digital and physical products

Digital twins have been around for decades. Businesses were unable to fully utilize this technology because of high costs and limited technology infrastructure. Digital twin products will become more common in 2023 as more businesses become equipped to create them. These advancements were made possible by other technologies, such as IoT, metaverse, and cloud.

More businesses will create digital twins of their physical products and systems this year in order to uncover risks and opportunities. In order to improve the interactions with digital twin technology, digital twin products will be developed. A greater emphasis will be placed on immersive visualization.

4. Cybersecurity will remain a top priority

Technology will advance rapidly in the coming years. There will also be an increase in cyber attacks. By the end of 2023, cyber crimes are expected to cost the world $8 trillion. The advancement of Artificial Intelligence has made it easier for cybercriminals to orchestrate sophisticated hacks.

For instance, most hackers now use AI to automate finding and taking advantage of digital product vulnerabilities.

Product development will include cyber security in order to counter such threats. Blockchain and AI will be used to improve the safety of digital products. Moreover, digital products will be set up in a way that strengthens recovery capabilities.

5. Implementation of headless architecture models

Another digital product development trend that will continue into 2023 is headless architecture. Front-end and back-end functionality are decoupled in this architecture. On the front end, this allows content to be published and scalable to any channel.

With so many benefits, this architecture is expected to grow at a rapid pace in 2023. With headless architecture, businesses will be able to achieve greater flexibility and speed in their digital products. According to Business Wire, the headless architecture model will grow from $328.5 million in 2019 to $1,628.6 million by 2027.

Digital Product Development Strategy

Another pre-step in the creation of a digital product is the product development strategy that is directly related to your business plan.

A digital product strategy outlines how a product is created, made available, and then promoted to its target audience. This should include details about the steps, the team, and the budget for product development, in addition to milestones, releases, and the end goal.

Digital Product Development Process

Developing a digital product does not have a definitive methodology. Despite the fact that these steps are vital for the success of your project, all product development projects are not the same.

In an ideal scenario, you will have a project management team overseeing digital product development and leading your teams through the process. We will simplify the stages in product development process here:

1 . Discovery, ideation and validation
In the first stage of developing a new product, you must find an issue to solve, develop an innovative solution, and then validate that your solution works and has a market.

The desire to start developing your app is understandable. To set up your digital product for future success, you must take your time at the beginning. In the earliest stages of product development, you should keep the following questions in mind:

– How well do you understand the problem you are trying to solve?
– Can users benefit from the solution you are proposing?
– How well does your product solve the problem?
– What is the market potential for your product?

Businesses often fail to commit resources to digital products before understanding the answers to these questions. There will never be a way to completely eliminate risk, but a thorough discovery, ideation, and validation process can uncover unseen issues and reduce it dramatically.

2 . Digital product design and prototypeThe first step is to determine how your digital product will look and how it will function. Wireframing is usually the first step in the design phase. With wireframes, key stakeholders can visualize how the product will operate and how users will interact with it.
After you have wireframe blueprints, you need to turn them into designs. Initially, each screen will be rendered in the order of a typical user journey. When working on an app development project, you should have designs for every device you intend to release.

Finally, make sure you have a clickable prototype or a Minimum Viable Product (MVP) before going into full production. MVPs help validate your product idea and demonstrate its value, but they can also help you discuss specific User Interface (UI) elements and User Experience (UX) more thoroughly.

3. Product development and launch
Once your idea has been validated, you need to develop a design and launch your product. The development process can be approached in a variety of ways, from Agile development to DevOps. You should choose a digital product development approach based on the size and strengths of your development team.
The final step is to launch your product once it has been completed. Digital products can be launched in a variety of ways. Product launches are divided into soft and hard launches. Your soft launch allows a limited number of users to access your product. Before moving on to a hard launch, many businesses conduct a soft launch as a final form of validation. Hard launches are released to all interested users.

4. Testing and ongoing maintenance
Launching a product is not the end of product development. The development of a product never truly ends. Maintenance and quality assurance testing are essential for maintaining the performance of your product. As long as your idea is successful, you will have to perform regular ongoing maintenance and testing on your product. It is critical to perform these tasks in order to find and fix bugs, as well as maintain a great user experience.

Wrapping up: Digital Product Development

Digital product development will continue to undergo significant changes in 2024. Developing products that are digital-first, customer-first, and sustainable is key to improving customer experiences and internal company operations.
To ensure successful delivery and digital product management, businesses should partner with a reliable product development company. OpenXcell is one such company. As a leading provider of digital transformation services, we can assist you in developing innovative, customer-centric digital products.