As tariffs continue to reshape the economic landscape, consumers are feeling the impact—and adjusting their behaviors accordingly. In a recent survey conducted by InContext, a striking 67% of shoppers believe tariffs will increase grocery prices, and many are already changing how and where they shop.
From cutting back on imported goods to opting for store-brand products and secondhand options, consumers are in budget-protection mode. They’re comparing prices more carefully, turning to local businesses, and using more coupons and promotions to manage rising costs. These changes are not temporary—they signal a long-term shift in shopper priorities.
For consumer packaged goods (CPG) brands, this creates a challenging new reality: How do you stay relevant and profitable when everything—from supply costs to consumer loyalty—is in flux?
The answer lies in digital twin technology.
What Are Digital Twins?
A digital twin is a virtual replica of a physical system. For CPG companies, that could mean a simulated version of a store, shelf, product lineup, or supply chain. By feeding these models with real-world data, brands can simulate “what-if” scenarios, test changes without physical rollout, and make smarter decisions—faster.
5 Ways Digital Twins Help Merchandisers Adapt to Tariff Pressures
- Scenario Planning and Simulation
Digital twins empower merchandisers to model how different tariff scenarios—like a 10% increase in packaging costs—could affect product pricing, shelf space, and shopper behavior. Instead of reacting after the fact, teams can plan and pivot in advance. - Optimized Planograms
When certain SKUs become cost-prohibitive, brands need quick alternatives. By integrating supply chain and pricing data, digital twins help teams design virtual shelf layouts that balance product availability, cost, and consumer preference—without sacrificing brand visibility. - Predictive Inventory Management
Tariffs don’t just raise prices—they disrupt supply. Digital twins use predictive analytics to flag potential stockouts or delays. Merchandisers can then adjust displays or plan promotions around products with stable inventory, reducing risk and waste. - Retailer Collaboration
Sharing digital twin scenarios with retail partners improves alignment. Instead of vague predictions, brands can show real, data-backed models of how a proposed shelf change or pricing adjustment will perform—building trust and speeding up approvals. - Cost-Effective Testing
In-store pilots are expensive and time-consuming. Digital twin technology enables rapid virtual A/B testing of new layouts, packaging, or pricing strategies—giving brands the ability to iterate quickly and reduce costs while staying shopper-focused.
The Big Picture
We know that tariffs are already reshaping the retail experience—from consumer behavior to corporate strategy. While shoppers seek out affordability, CPG brands must seek out agility. Digital twins provide the visibility and flexibility needed to make smarter merchandising decisions in a rapidly shifting environment.
