How is Digital Twin technology helping retailers to drive sales?
When we talk about digital twins, we’re often referring to digital models or representations of physical things, such as machines and parts which can be manipulated and altered over a period of time. These digital versions of physical things simultaneously evolve and record data as they mature in their life cycles. They allow businesses to aggregate, analyse, gain insights and eventually build the final version by testing and building the digital ones first.
This has already become commonplace in aviation, automotive and other manufacturing sectors. But there is, however, a significant difference between a ‘digital twin’ in manufacturing and in consumer retail. While a digital twin in manufacturing or automation industry involves running simulations and what-if scenarios, digital twins of consumer products or ‘things’ in retail encompass a completely different approach.
When it comes to retail, digital twins correspond to the digital information copy of an actual product on the internet that can be edited and updated as the real physical product goes through different stages of its life cycle.
Unlike a simulation in manufacturing, digital twins in retail are more focused to track and trace products, applicable to logistic companies and supply-chain managers. This data-driven digital twin information can be shared among stakeholders, organisations, teams and even countries and can also be deployed in a multilingual format. It enables retailers as well as customers to keep track of products and their corresponding information as they are sourced, shipped, purchased, used or consumed.
This information can then be used to understand and refine product information at all stages of its life cycles. Brands can reduce the risk of spoilage and cut down the turnaround time as well as updating offers or promotional changes or update other information related to the physical product and its packaging.
But the potential for digital twins in retail doesn’t end there.
For retailers, the ultimate goal is focused around getting prospective buyers to part with their hard-earned cash in store or online, but the customer buying process begins long before their card details are handed over and ends well after the transaction clears the bank.
Today single transactions don’t mean a lot to large retailers. What they really want is repeat custom, in other words – loyalty. And this is exactly where digital twin technology helps.
Customers already have a large digital footprint offering insight into their user journey which starts well before they set foot into a physical store or visit an online retailer. Each customer has a personal profile and purchase histories with retailers, travel agencies, rideshare services and fitness trackers.
Using these personal profiles, a digital twin could initiate various predictable outcomes. By combining previous transactional data, such as the quantity and frequency of a particular purchase with insights from non-transactional knowledge, such as family size, work location, and holiday history, it allows for the creation of a reliable model of an individual and to understand the point at which they are likely to approach their own personal reorder point for a product or service.
You can also apply insights gained from product consumption and how connected devices are being used presenting new opportunities for retailers. Say for instance you’re a travel agent with data profile on a customer that has purchased 3 holidays from you in the last 3 years. Based on their data, you know they don’t have children, they tend to book holidays in winter months and travel in the summer period and you know exactly which countries they like to visit. But the insights don’t end there. Thanks to the adoption of connected devices, you are now able to analyse the data from the customer’s fitness tracker, so you know they’ve recently taken up yoga.
Based on these insights, you can send them a promotional deal for a suitable upcoming Yoga retreat in Spain – after all you know when they like to travel, what kind of countries they like to visit and how much their budget is.
Using this example, you can already see how powerful these insights could be for retailers. It enables them to completely transform the way they advertise and promote products or services. There’s no longer a need to show hundreds of adverts and offers which can often be perceived as a nuisance and may actually put buyers off.
By applying digital twin concepts, we can predicatively offer consumer solutions — not as they enter a store with their minds set and shopping lists in hand — but rather when they will be most receptive to offers based on their unique interests. This will make the offers and ads look more interesting and relevant and drive deeper customer connections based on increased loyalty.
To read more about digital twins, including who’s already using the technology, click here.