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Innovation and Product Development

Essentials for Your Digital Strategy: Product-as-a-Channel


Delivering seamless, consistent, and engaging experiences starts with a customer-centered digital strategy. This ongoing series explores the characteristics that make up a great digital strategy and how to deliver powerful brand moments that solidify customer loyalty and drive differentiation for your organization.

With apologies to Visa, it’s true that today’s successful marketer is everywhere their customers want to be. We live in an increasingly omnichannel world. A study of 46,000 shoppers found that 73% of those surveyed used multiple channels during their shopping journeys. However, being “everywhere” and showing up with the right message has never been harder. One reason: the fast-maturing technologies turning everyday products like cars, appliances, and speakers into agents of conversation. Success in this chatty new arena requires first understanding how customers want to connect, and then developing a portfolio of omnichannel experiences that meet their expectations.

For most of the last century, a mix of radio, television, and print was the only game in town. The arrangement was simple: brands spoke and consumers listened. “Conversations” were of the one-way variety. A few tried-and-true channels promised an easy way to reach the masses. But no more. In the US today there are about eight networked devices for every person, and this number is expected to climb to almost 14 by 2022. 

Audiences expect to interact with brands using virtually anything with a screen or speaker. Forrester predicts the installed base of smart home devices (which is just one type of connected product) to grow at a compound annual growth rate (CAGR) of 26.2% between now and 2023. This trend has made an omnichannel, or even “channelless” mindset, at once more possible, more necessary, and more challenging than ever. To keep pace, digital strategies must anticipate new product-as-a-channel opportunities as quickly as they appear.

With advancing technology comes the need to meet audiences where they are, and to support meaningful conversations in the ways consumers want and expect. Given so many options, what steps can a digital professional take in developing product-as-a-channel solutions? Here, through use cases and expert insight, we provide seven ways in which marketers can take action:

1. Know how your customers want to connect

It’s not enough to follow tech trends and mimic the category leader. The world is moving too fast to wait-and-see. Even though eMarketer expects 31 million people in the US to shop via a smart speaker this year, knowing when, why, and how your most important customers might choose to engage in this way will require a good deal more understanding. When describing the importance of understanding user needs, researcher David Rise of MIT said, “gestures are generation-specific. When asked to signal turning up the volume, a few people twisted an invisible knob, but most of the under 30s lifted a palm or made a pinching gesture with their fingers.” 

Savvy CMOs and their teams work hard to develop their own unique customer empathy resources and then use this insight to their strategic advantage. We advise clients to adopt a design thinking mindset and employ primary research methods in uncovering customers’ unmet needs. Then we help them apply this knowledge in solving for the moments that matter—regardless of device—by creating prototypes that can be designed, tested with users, and iterated quickly. By doing so, your organization can become part of a small but growing tier of customer experience leaders ready to innovate with confidence.

Perficient Digital’s Design Thinking Methodology

Perficient Digital’s Design Thinking Methodology

2. Offer meaningful experiences, naturally

On the topic of developing a portfolio of relevant experiences, embracing product-as-a-channel means letting go of the browser’s point- and click-based interactions. A recent Forrester study showed that firms lag in addressing connected consumers in part because they “commit to mass-adoption devices but still don’t focus enough on emerging technologies or devices.”

Product-as-a-channel solutions require users to interact in a wide variety of scenarios and settings. They demand natural user interfaces (NUI)—an emerging breed of interactions that include touch screens (think iPads and other tablets), touch-free gestures (think Nintendo Wii, Microsoft Kinect, and this guy), and voice (“Hey Siri”). These capabilities allow for more seamless interactions with products within a user’s environment. 

As Microsoft’s Bill Gates noted, “until now, we have always had to adapt to the limits of technology and conform the way we work with computers to a set of arbitrary conventions and procedures. With NUI, computing devices will adapt to our needs and preferences for the first time and humans will begin to use technology in whatever way is most comfortable and natural for us.”

3. Build your own ecosystem

Nike+ represents an early, successful foray into the world of connected products. When Nike launched its Nike+iPod activity tracker in 2006, there was no Fitbit, Jawbone, or Apple Watch. A complete platform had to be developed to support the interplay of runner, device, and data. Working the Apple and other partners, the Nike+ system grew to consist of an iPod, a wireless chip, Nike shoes that accepted the wireless chip, an iTunes membership, and a Nike+ online community. 

Over the years, Nike became one of the few major brands to hold a substantial share of the wearable retail market, growing to more than 30 million global users in fewer than 10 years. As new products and integrations were introduced to the Nike+ platform, the channel became a more potent means of reaching customers. 

Years later, it’s become routine for brands to think in terms of digital ecosystems and platform business models. Manufacturers today can develop services to complement product lines and create new revenue streams around products. By owning the product channel and imbuing it with connected capabilities, marketers can deliver messages and services directly into the hands (or shoes) of customers.

4. Help consumers make sense of the world around them

Hellmann’s sought to inspire new uses of mayonnaise as a cooking ingredient. Since recipes on the Hellman’s jar label and the brand’s website weren’t cutting it, Hellman’s ventured directly into customers’ kitchens, using a trusted platform. 

The brand teamed up with the cross-platform mobile messaging app, WhatsApp, to develop WhatsCook. The one-to-one, real-time service connects people to real chefs, teaching users to cook with ingredients already in their kitchen. The results showed an average of 65 minutes spent with the brand per user and 50% of website visitors signing up for the service. 

Recently, our own Perficient Digital Labs team explored ways to help commuters navigate the urban environment using emerging technologies like augmented reality. The Labs team used new AR features available in iOS 11 and 12 to create a proof of concept for the Chicago Transit Authority (CTA) that identifies Chicago’s bus signs using ARKit’s image recognition. By pointing a smartphone at CTA signs, riders can quickly display bus information based on the signage near them. Using the ARKit image recognition feature in this way demonstrates the power of AR for seamlessly connecting people with data in out-of-home settings.

5. Enable consumers to help you make sense of the world around them

By 2020, there will be a quarter billion connected vehicles on the road, enabling new in-vehicle services, performance monitoring, and automated driving capabilities, according to Gartner. Gartner also predicts the connected kitchen will contribute at least 15% savings for brands in the food and beverage industry, while leveraging big data. 

Mastering product-as-a-channel offers another benefit: the ability to gather data and insight about customers as they interact with the world, a critical factor in driving innovation. Walgreens is exploring a new program to inform shoppers in stores while gathering data about them. The retailer recently began testing smart displays to connect with customers in their refrigerated aisles. By using cameras, sensors, and digital screens in the cooler doors, marketers like Walgreens can target ads for specific types of shoppers as they search for a beverage. The screens display ads in real time to shoppers as they reach for a cooler door handle based on variables such as their perceived age, gender, and the current weather. Walgreens can also see what products customers consider or leave with, providing intelligence that helps brands and retailers craft a personalized shopping experience.

6. Think product-as-a-service, and service-as-a-product

It’s becoming less straightforward to define companies in a black-and-white, product- or service-oriented way. GM builds cars and offers financing. Nike (noted above) offers fitness coaching and makes athletic apparel.

Product-as-a-channel allows brands to further blur these lines, rounding out their market positions while augmenting their customer experience portfolios. With a smartphone or wearable app, services companies can connect with the physical world through cameras, haptic sensing technology, location detection and more. Digital channels allow manufacturers to offer advice and education on the use of products. As the boundaries separating product and services fall, marketers be innovative and explore the potential channels through which your business can reach customers.

7. Act like channels don’t matter

As consumers continue to adopt connected products, CMOs must stay on top of channel options, know where customers spend their time, and how to leverage that time in a way that makes sense for the brand. However, overemphasis of channels risks taking focus away from the needs of customers and creating barriers to innovation. Digital pros can benefit from imagining a world without channels. CMOs must prepare their organizations for the changes required to support the new world of connected devices within this paradigm. 

As these channels become ingrained in nearly everything consumers encounter and eventually fade away, having an adoption strategy for both customers and internal employees is critical. Product-as-a-channel planning must take into account customer enablement, employee enablement, data and digital intelligence, and operational excellence.

  • Customer support. As noted above, intuitive technologies that make use of NUI effectively help position brands for strong consumer adoption. Mature design thinking and customer empathy competencies are a must. As innovations are introduced, companies should be prepared to use their call centers, branded websites, and social media channels to help customers learn about new capabilities and connect them with members of their own communities for advice and support.
  • Employee enablement. A responsive, well-planned organizational change management strategy is essential. CMOs must prepare and equip employees for a successful transition to new ways of working, because, ultimately, employees define project success. In fact, up to 75% of a client’s project ROI depends on employees actually using the system or process they implement as intended.
  • Data and digital intelligence. Modern brands and the experiences used to deliver them are enabled by data. Having the right data, in the right places, at the right time is critical to product-as-a-channel success. To achieve this requires an organization to excel in four core areas related to data:
      • The ability to validate the right sets of data
      • to have that data orchestrated across the entire enterprise in a single view of the customer
      • to use insights from that data to drive activation for customers
      • and to measure the right outcomes are what differentiates winners and laggards today.
  • Operational excellence. Capitalizing on product-as-a-channel also relies on a business that’s not restricted by silos. Today’s business environment demands the free flow of data and insight to drive innovation.

When considering product-as-a-channel, it’s important to think less about specific channels, device, or platform and to focus more on the experiences customers want and need. This way, the channel does not cloud the creation of the customer experience. Learning about customers’ unmet needs, including orientation to devices and channels and their ability to adopt them, is the first step. By leveraging your data and customer insight teams, and user researchers, you can map out a customer journey that shows how customers want to experience your brand—anywhere they happen to be.

Creating stand-out digital customer experiences that attract, engage, and retain customers is a tall order. Perhaps you’ve already done some of the foundational work, and you need help with the next step.

When working with clients, we help make sure you know your customers and understand their journeys. Through design-thinking tools, industry research, and pragmatic ideation to execute from end-to-end, you will have what it takes to deliver experiences that surprise and delight your customers.
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David Stallsmith

David has expertise in applying user insight and design thinking methods to solve complex customer experience, marketing, and employee engagement challenges. He’s an accomplished strategist with extensive experience across a range of industries, notably branded manufacturing, technology, financial services, retail, and healthcare.

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