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Why retailers and FMCG brands can no longer ignore digital twins

Retailer and FMCG brands face the challenge of offering its customers shopping experiences that keep pace with digitalisation, stand out from the competition and still reach the broad mass of consumers without losing personalisation.
A widely used option to position oneself as a brand or retailer in the virtual space is to set up a virtual shop as an in-game option, such as Frosta in GTA or Gucci in Roblox or Minecraft.
Probably the better option, is to set up your own virtual shop. Not only to own data and - in general - to be able to change content and customise the experience. By creating digital twins, companies can remain competitive and offer their customers a contemporary shopping experience.
In this article, we would like to shed light on which advantages can arise in detail. To do so, we look at the use of a virtual twin from the perspective of the various players.

From the customer's point of view

By creating digital twins, the customer can be offered a digital shopping experience. For example, the experience of walking through the shop with a previously customised avatar and/or trying products virtually before actually buying them creates more excitement and makes the experience even more special.
A direct interface to the online shop rounds off the shopping experience even further, as does personalisation in the form of a personal address or the selection of presented products according to buying behaviour and interest appeal to customers.
According to a study, 56% of consumers say they are more willing to buy from a retailer that offers them a personalised shopping experience. Another study by GfK shows that 58% of consumers who have had virtual shopping experiences are more willing to buy from that retailer.
The results make it clear that special attention should be paid to the opportunity to build stronger customer loyalty and attract new customers.

From the marketer's point of view 

For marketers, the use of digital store twins and thus complementary experiences opens up new testing possibilities. For example, different placements of products and advertising materials in the shop can be tested in A/B testing. Based on the results of the analysis of the data, new possibilities arise for targeted addressing in the customer segment up to direct personalisation per target customer. The personalisation can look like this: when the customer visits the virtual shop, he or she is shown, for example, a personalised offer based on the customer's previous purchases. The additional the provision of a coupon can initiate the purchase faster. For this, there should be a direct connection to an online shop to be able to complete the purchase experience directly in the virtual shop instead of navigating the customer from the experience to the website's online shop.
In addition to creating an additional point of sale, the virtual shop also offers many opportunities for further use, such as hosting launch events, influencer specials, release parties, etc.
Participation in the event can then be raffled off through prior customer registration or a raffle. This not only increases the appeal on the customer side due to the exclusivity factor, but also generates more data and information about the (potential) customer, which then offers opportunities for retargeting etc.

From the point of view of the store and range planner

Digital twins not only offer advantages for the customer and the marketer. They can also be of great benefit to the company and especially the shop and assortment planner. For example, assortment planning, merchandise placement, lighting and signage as well as the planning of in-store communication can be coordinated more efficiently internally in advance; offer communication on displays, stand-up displays in special formats, etc.
Different variants can be placed and braced in the digital store. In addition to the digital web version, the planner team can also walk through the store with VR glasses, recreate the paths of the customers and thus coordinate the placements even better. As an add-on, A/B testing with defined shopper groups provides additional evaluation data. By analysing customer behaviour during virtual shopping, the company can determine, for example, which products are viewed particularly frequently or placed in the shopping basket.
In this way, the assortment can be tailored to customer needs and more targeted marketing strategies can be developed. In terms of cost savings, digital twins can save companies up to 25 % in costs by increasing the efficiency of business processes and reducing the need for physical prototypes.

These are just a few examples, but overall it can be said that creating digital twins in retail offers numerous opportunities to increase customer loyalty, improve business process efficiency and ultimately increase sales. A study by PwC found that companies that use digital twins can increase their customer satisfaction by up to 50 %. Companies should therefore not hesitate to invest in this technology in order to remain competitive.
Of course, one should not completely disregard or be aware that the creation of digital twins involves effort. Not only do the premises of a selected shop (flagship store) have to be recreated and digitised in 3D, but also the assortment and in-store communication should already be available in digital form so that they can be easily integrated and exchanged.
However, it often turns out that the costs are low compared to the potential benefits and are amortised quickly.

What do we at VARYCON have to do with the topic of digital store twins?

We have built up various digital twins of branches, customer centres, etc. in recent years, especially due to the pandemic. In order to make these versatile for our customers and, above all, to offer them the possibility to create personalised tours for their individual customers or customer groups, we have not only made VARYCON available as a media content production tool, but VARYCON is also used as a backend to independently create and manage personalised tours, A/B versions or even different events running in parallel in the same Space.
In this way, not only can the creative, media content for the event be created, but it can also be directly distributed and tailored to the customer or customer group. Everything at a single point of truth and, above all, completely self-sufficient.
Do you still have reservations about developing and implementing a complete store or showroom from scratch?
We have also created a solution for this: fynyx. fynyx is the first virtual space for rent, which offers a cost-effective entry-level option for familiarising yourself with the topic of digital twin through its various rooms and themes.

In case you have any questions about the topic or like further information, please get in touch with your contact person Barbara Stadler.

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