10 Use Cases and Benefits of Adopting Digital Twins in Retail

Retail is a vibrant arena, full of opportunity but fraught with challenges. As consumers become more demanding and competition gets fierce, retailers face mounting pressures. From unpredictable consumer demands and ever-changing market trends to supply chain disruptions and the need for personalized customer experiences, there is so much to grapple with. It is a juggling act that often leaves businesses struggling to keep their heads and shoulders high in today’s competitive age.

Solution? Digital twin!

Digital twins in retail are like a “virtual mirror” of your entire business. They offer a live, data-driven simulation of your stores, products, warehouses, and even customer behaviors. Retailers can use digital twins to predict how changes affect their physical counterparts.

What’s more? Digital twin technology in retail unlocks incredibly new value for businesses, especially when coupled with Artificial Intelligence (AI) and Augmented Reality (AR).

By leveraging these transformative technologies, retailers can predict customers’ demands, manage inventory to prevent overstock or stockout situations, reimagine store layouts for maximum efficiency, and even test out new product lines without the risk of losing a penny.

Interested to know more about retail digital transformation and how digital twins in retail are the future of eCommerce? Then, this blog is for you. Scroll down and stick to the end of this post to learn how retail digital twins for retailers can transform your business.

Why and How to Use Digital Twin in Retail: Applications and Advantages

Digital twins for retail transform the sector by bridging the gap between physical stores and digital insights. By creating real-time virtual models of operations, retailers can enhance customer experiences, streamline processes, and make data-driven decisions. Let’s explore some key applications of digital twins in the retail industry and how they benefit the businesses:

Improved Customer Experience

One of the most notable applications of digital twins in retail is using 3D product models to personalize customer experiences and improve engagement. Retailers constantly try to crack the code to make every customer feel valued and privileged as if the store is speaking directly to them.

Digital twins give you a superpower to do that by tracking customer behavior and predicting what they might like before they even know it.

Suppose you walk clueless into an apparel store, having no idea what will suit your taste, and suddenly you get product recommendations that perfectly fit your style. That is exactly what digital twins for retail do.

Nike presents an exciting example of digital twins in retail by using the technology to personalize product recommendations. By analyzing a customer’s previous purchases, Nike creates tailored suggestions, making shoppers feel understood and valued.

Optimized Store Operations and Reduced Costs

Running a retail store can feel like solving a never-ending puzzle—labor costs, utilities, inventory—all moving parts that must fit together just right. Digital twins act like your personal assistant by creating a virtual model of the entire store, giving you a 360-degree view of your store’s operations.

This model can optimize everything from staff scheduling to energy usage because you are not just guessing but making the right choices based on real-time insights.

For instance, Walmart uses digital twins to analyze everything from energy consumption to staff efficiency. The result? Smarter decisions that cut down operational costs without degrading customer experience.

You may like reading: How much does it cost to develop a retail app like Walmart?

Inventory Management

One of the biggest headaches for retailers is balancing inventory levels; too much stock leads to waste and too little results in lost sales. This balancing act gets a lot easier with digital twins.

How? This virtual replica offers real-time insights into stock levels and can even predict when items will run out based on current market trends and consumer demands.

Retail and eCommerce giant Amazon uses digital twins to predict inventory needs in its warehouses to know exactly when and where products will run low. It allows them to restock the inventory before it becomes an issue, keeping customers happy and shelves full.

Related Article: 10 Ways to Unlock the Power of AI in Inventory Management

Data-Driven Business Decisions

Data-driven decisions are the backbone of the modern retail industry, but sifting through the piles of unscattered data can be intimidating. Digital twins consolidate data from multiple sources, such as point-of-sale systems, inventory apps, CRM software, etc., into a single, real-time dashboard, giving retailers a crystal-clear view of their operations.

Amazon uses vast amounts of customer data from past purchases and browsing habits to deliver hyper-targeted ads. This allows them to serve consistent remarketing ads while letting customers come back for more. This smart use of digital twin technology boosts engagement and drives more informed business decisions.

Also Read: Cost to Develop a Marketplace App Like Amazon

Store Design and Layout Optimization

Store layout is not just about aesthetics; it is also about increasing customer engagement and driving sales. With digital twins, retailers can experiment with store layouts and product placements in a virtual environment, testing how changes impact foot traffic and sales before physically moving a single display.

For instance, Target, the retail chain, uses digital twins to reimagine store layouts, testing different product placements and aisle configurations without moving a single shelf.  This allows them to figure out how customers move through the store, optimize layouts, and streamline inventory replenishment to drive more sales.

Thanks to digital technology, all our in-store employees can now visit the showroom and discover new products. It’s great for them. After a year of use, we have gained a better grip on the tool and can now use it on our own. In the meantime, the user experience has improved: virtual navigation has become much simpler and smoother.

Laetitia Dauphin, Format Relations Coordinator Hypermarkets, Carrefour

Supply Chain Optimization

Supply chains are delicate ecosystems, where one small disruption can bring everything to sixes and sevens. Digital twins offer retailers a bird’s eye view of the entire supply chain, from manufacturer to store shelf. In today’s digital landscape, when supply chain effectiveness and reliability have become more critical than ever, leveraging the capabilities of such technological innovations is indispensable to gaining a competitive advantage.

For instance, BMW uses digital twins to model its supply chain setups and manufacturing lines. The technology helps the company streamline processes, minimize waste, and predict results in various scenarios.

Target also uses digital twins to monitor everything from transportation routes to warehouse storage. By identifying potential bottlenecks in real-time, they can make adjustments on the fly, ensuring that stock is always where it needs to be.

Also Read: Reasons Why Digital Transformation in Supply Chain Matter

Virtual Fitting Rooms

Buying clothes online is a gamble. Will it fit? Will it look good? Or will it end up in the return pile? Thanks to AR and digital twins, which take the guesswork out of online shopping experiences. The synergy of AR and digital twins in retail transforms both the in-store and online shopping experiences.

The technology enables online shoppers to virtually try on apparel, accessories, beauty products, etc., and even visualize electric and furnishing items in home settings.

Nearly all reputed brands like ASOS, MAC cosmetics, IKEA, Adidas, etc. leverage this retail digitalization to improve online and offline shopping experiences, allowing customers to “try on” a vast range of products without ever leaving home. This not only improves customer shopping experiences but also reduces return rates.

Predictive Maintenance

Retailers rely heavily on machinery, such as refrigeration units, escalators, and more. So, when something breaks down, it is not only expensive but can also bring everything to a halt.

Here, digital twins can do the trick, which monitors equipment in real-time and predicts when something is about to go out of order. It is like having a mechanic in place who tells you, Hey, that fridge will break in a week; better fix it now.

Kaeser uses digital twin technology in the retail industry to track the operating data of its air compressors in real-time and then take proactive actions accordingly.

Real-Time Remote Monitoring

Managing multiple store locations is no small feat. Getting a comprehensive, real-time view of every physical system you manage is nearly impossible. However, retailers can do it easily using a digital twin in retail, monitoring everything from customer traffic to energy consumption while sitting in one place.

Marks & Spencer uses digital twins to monitor their stores’ remote operations and make real-time adjustments to improve efficiency across locations.

Accelerate Risk Assessment and Production Time

Risk is everywhere in the retail sector—from fluctuating consumer demand to supplier delays and even in production lines. Digital twins act as a safety net by simulating potential risks before they escalate. Retailers can use digital twins to create a virtual replica of the production process to test and validate products before they hit the market. This proactive testing accelerates product development and ensures higher reliability in the production line.

Fast-fashion brand Zara uses digital twins to spot flaws early in the production line and optimize processes, reducing production delays and improving product quality.

Future of Digital Twin in Retail

There are numerous digital twin retail use cases, and they can efficiently redefine how businesses operate and engage with customers. From AI-driven personal shopping assistants to virtual fitting rooms where shoppers can try on accessories virtually, the possibilities of retail digitalization are endless.

As technology advances, we will soon be in a world where retail stores are no longer just physical spaces but dynamic, data-driven ecosystems that empower businesses to make informed decisions faster and more accurately. Retailers will no longer be flying blind but will have the tools to anticipate trends, adapt quickly, and innovate without fear.

This level of intelligent optimization is becoming the new retail standard, blurring the line between the physical and digital worlds to create a personalized shopping experience like never before.

Integrating digital twins with other advanced technologies, such as IoT, AR, and AI, will further revolutionize the retail landscape in the coming years. In short and straight terms, digital twins in retail are not just “nice-to-have” but a critical component for a retailer’s success.

Here are a few predictions that will help you understand the significance of the future of digital twins:

• Gartner predicts that the digital twin market will hit a turning point by 2026, soaring to an estimated $183 billion in revenue by 2031.
• McKinsey & Company’s survey data indicates that almost 75% of companies in advanced industries have already adopted digital-twin technologies.
• According to MarketsAndMarkets, the global market for digital twins will reach $110.1 billion by 2028, up from $10.1 billion in 2023.

These whopping figures and stats indicate the growing adoption of digital twins in tech-advanced industries in the coming years.

Embark on Your Retail Digital Transformation Journey with Appinventiv

At Appinventiv, we distinguish ourselves as the best retail software development company by focusing on key aspects that drive success for each of our clients. Our commitment to excellence is reflected in our work, including digital twins software development for the retail industry.

Many renowned retail companies, such as IKEA, Adidas, 6th Street, YKA, Edamama, etc., have outsourced our digital transformation services and achieved impressive outcomes that exceeded their expectations every time. We are renowned for delivering unmatched product quality, competitive pricing, and cohesive services with adherence to timelines.

Our team of 1600+ tech nerds helps create, customize, and control your own digital twin model, opening up a world of possibilities for dynamic and immersive eCommerce experiences.

Whether you are just a startup looking to establish your online presence or a huge enterprise wishing to enhance your customer experience, our expertise in digital twins and retail software development will help you realize your vision.

Don’t delay anymore. Discuss your project idea and redefine your retail business to gain ground in the digital landscape.

FAQs

Q. What is digital twin in retail?
A. Digital twin in retail is not just a tech buzzword but a critical virtual representation of a physical object, system, process, or even people. This virtual model is designed to mimic, replicate, and predict real-world scenarios.

This synergy of the physical and virtual realms empowers organizations to predict consumer demand, analyze behaviors, make informed decisions, predict product performance, and reduce operational costs.

Digital twins for retail use a range of advanced technologies, such as AI, AR, ML, IoT sensors, cameras, beacons, RFID, and data analytics, to enable businesses to monitor and manage their stores’ performance, improving customer engagement and sales.

Q. What are the benefits of digital twins in retail?

A. Retail digital twins bring a wide range of benefits to the sector, redefining how businesses operate and engage with customers. Some of the most common benefits of digital twins in retail are:

• Using the digital twin model, retailers can create more personalized and interactive shopping experiences by tracking real-time customer data. It leads to higher customer satisfaction and increased loyalty.
• On the operational side, digital twins help optimize store layouts, reduce energy consumption, and streamline staffing, ultimately cutting costs.
• Additionally, these virtual replicas enable more accurate demand forecasting and better inventory management, preventing overstocking or stockouts.
• Digital twins also improve supply chain efficiency and help retailers perform predictive maintenance on in-store equipment, reducing risks and defects. It also accelerates product development by simulating production processes,

Q. What is the cost of developing digital twin software for retail?
A. The cost of developing digital twin software for retail varies based on several critical components, such as complexity, scale, and the number of integrated technologies. Additional factors that can influence the cost include the need for custom development, cloud infrastructure, and ongoing maintenance.

However, to give you a rough estimate, we can say that digital twin software development cost for retail industry ranges between $30,000 to $300,000 or more.

To get a more precise estimate for the cost of digital twin software development, discuss your project idea with us and get detailed quotations tailored to your needs.

THE AUTHOR

Saurabh Singh

CEO & Director