Pavel Nakonechnyy

How does digital product management differ from the product management of a physical product?

Published (updated: ) in Product Management.

How does digital product management differ from the product management of a physical product?

Digital product management is booming: salaries are high, requirements for candidates are low and many companies are searching for senior PMs. Being an experienced product manager with experience with physical products you may think about switching to digital products. However, in an interview, you may face many questions to which you don’t know the answers. Prepare yourself. Let’s discuss the differences between digital PM and physical PM and whether a manager with experience with physical products can switch to digital product management.

  1. First, online and offline products differ in sales channels. Physical products are typically sold in stores, whereas digital products are sold online. Therefore, product managers for physical products work with retailers to get their products onto shelves, whereas digital product managers work with online platforms.
  2. Physical products tend to have a longer shelf life. Product managers for physical products need to forecast demand and manage inventory levels to ensure that products are available when customers want them. Digital product managers plan updates and new releases to keep the product fresh and relevant.
  3. Physical products have high production costs in resources, whereas digital products use mainly human labor for development. Thus, product managers for physical products need to calculate the cost price and justify it against other products on the market.
  4. Physical products have long development and ideation cycles since manufacturing processes, distribution channels, and unit costs are hard, slow, and expensive to change. Digital products are updated much more quickly. Iteration is a key part of the development cycle for digital products.

To sum up, the core tenets of product management are similar aside from the development cycles. You still have to represent the customer, understand the personas (use cases, edge cases), formulate a product vision, prioritize tasks, and find solutions to problems. As a result, a product manager with experience in managing physical products can switch to managing digital products after a couple of books.

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