Digital business, you might have heard the term before and probably wondering what it means. In simple terms, it’s taking a traditional business and giving it a digital makeover using technology. The goal is to make more money and create new opportunities for growth.
A lot of companies are jumping on the digital bandwagon because it’s the way of the future. Big businesses have already done it and are reaping the benefits in terms of money, customer satisfaction and more.
If you’re thinking about starting a business or taking your current business digital, it’s important to stay up to date with the latest trends and technologies.
The internet is a huge place, with over 2 billion websites. It’s hard to grasp the size of it, but just to give you an idea, companies like Microsoft, Amazon, Google, and Facebook alone store around 1.5 million terabytes of data.
In this article, we’ll take a closer look at what digital business is and everything related to it, including the process of digitization.
Digital Business Meaning and Definition
As the name implies, a digital business is a business that utilizes digital tools or can be said as a business that has been digitalized. In a broader sense, a digital business is a business that employs technological sophistication to create a product or market it.
Usually, selling products for digital businesses is done online through digital media, especially the internet.
But this business is not limited to selling products, but can also sell services. It can be called a digital business if it utilises technological tools.
Why Should You Bring Your Business Into Digital?
Recently, we can feel that businesses already operating digitally or can evolve for online enterprises can quickly survive amid a sudden pandemic, while giant companies that cannot adapt immediately fall and even stop production.
As quoted from the IT Pro site, 8 out of 10 companies worldwide have rapidly switched to digital platforms since 2020. Plans that should be realized within the next 2 to 5 years suddenly have to be completed in months if the business wants to continue to survive.
This signifies how important it is to build a digital business for all kinds of products, including conventional products.
Currently, competition in business in the digital world is also getting more challenging. Both new businesses and giant companies compete to provide the best service for their customers.
Most businesses that still maintain conventional methods cannot survive within 1 year.
And as a young creative entrepreneur, you must be keen to see opportunities when creating digital services so that customers are more interested in digital services from your brand than in other companies.
Cases like in 2020 are also proof that bringing business to the digital world is no longer an option but an obligation.
Digital Business Types
In fact, there are many ways for companies, brands or websites in the digital world. Based on the More Than Digital page, there are 11 ways a company can operate in the digital realm.
1. Marketplaces
The marketplace is the type of digital business most widely known, some of you must have heard of several large marketplace companies such as Ebay, Amazon, Bonanza, Walmart, and other.
A marketplace is a digital business where the owner provides a place or media for others to sell on the platform. That means the products contained in this business are an online platform so that buyers or sellers can shop safely and comfortably.
Most marketplace applications have more features than e-commerce. Because marketplace owners can focus more on allocating their capital to develop the best platform without having to think about the quality of the physical product first.
Of course, this differs from e-commerce, where the capital must first be divided between developing physical products and digital media.
2. E-Commerce
Suppose the marketplace business model only provides media to bring buyers and sellers together. In that case, this type of e-commerce will offer more products and special media to sell the products they create.
For example, an eye contact lens company has created a website so that buyers can directly order contact lenses on their website.
Another example is a boba drink provider company that provides a specific application so customers can order their favourite boba drink directly through the application.
For this reason, most of the digital media used in this form of e-commerce have fewer features than marketplaces. Because companies need to focus their capital on developing digital platforms.
3. Subscriptions
Actually, this type of business is also widely known by the people of Indonesia. Because there are already a lot of companies engaged in this subscription model, for example, Netflix, Spotify, Zoom, Disney+, and so on.
This model is the same as before, where you have to subscribe to a magazine or newspaper for content that is sent every week to every month.
The difference is that the content is currently more digital and can be enjoyed online without having to bring the physical product. Even so, some subscription model businesses still offer physical effects, such as snack subscription businesses or online catering.
4. Ad-supported
You need to know that social media companies such as Facebook, WhatsApp or Instagram are digital businesses that operate on an ad-supported or ad-based basis. That means these companies can benefit from every promotion, advertisement, or sponsorship that goes into their services.
In Indonesia alone, businesses that operate this way own free comics, news applications, and short video-sharing applications.
Benefits
Some of the benefits that you can experience when building a business by involving digital technology are as follows:
1. Providing a Great Customer Experience
Technological developments have a positive impact on the way companies interact with consumers or potential customers.
The technology involved can not only simplify the interaction process. Still, it can also improve more targeted services and follow each consumer’s needs. As a result, customers will feel more satisfied and want to provide added value to the company.
2. Improving Employee Skills
Employees or company employees will also benefit if you transform into the digital realm.
When your company transforms into the digital realm in every operational process, your employees can develop their skills to provide work results that meet expectations. This critical point can improve the overall quality of the company’s work.
3. Simplify the Process of Data Collection and Analysis
Convenience has become inherent in the use of digital technology. This does not only apply to customers but also to companies.
Businesses that have transformed into the digital world can easily collect and analyse data needed for company development.
Generally, business strategies can also be adjusted according to customers’ online habits when searching for and exploring the various things they need.
4. Opening Opportunities for Digitizing Products and Services
When you obtain market data and analyze it based on digital transformation principle indicators, your business can digitize every product and service that is presented.
As digital business grows, customers want to always get what they need instantly and hassle-free. They will also look for companies that can do this. This is where the digitization of products and services plays an important role.