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Digital Influence On In-Store Retail Industry In India

Indian In-Store Retail Market Overview

Indian economy is characterised by a heavily dependent in-store retail market spanning across rural and urban regions. The market remains highly fragmented and has a large number of big players (such as Big Bazaar, Shoppers Stop, Reliance) as well as small brick-and-mortar shops. The industry and its services is currently evolving as a fast-paced and most dynamic one, with numerous new players targeting to make a market entry and offering various innovative and up-to-date services to attract and satisfy customer needs.

Change in consumer preference: Traditionally, a large section of Indian consumers preferred and were habituated to physically venture into retail shops to do shopping. However, the pandemic crisis resulted in lockdowns and social distancing, leading consumers to resort to different methods for procurement of goods from physical stores.

Consumers are showing a growing propensity towards a digitally led, unified experience when shopping for their products – both essential goods as well as luxury items. The modern consumer now considers retail stores as ‘brands’ and not channels; hence a more interactive but tech-driven approach is vital for customer retention and appreciation. Digitalised strategies, not only enhance store experience, but also build an emotional engagement with consumers.

Growth Stimulators Driving Consumer Preference:

  • Innovative checkout system such as self-checkout, click and collect, or pick-up in-store (BOPUS) are the new age phenomena among consumers

  • Desire for traditional shopping methods - Indian consumers still opt for the unique offline shopping experience that include a greeting and meeting people, a knowledgeable store support team, and a desire to physically hold or test an item before purchase

  • Accelerating demand for Western brands - Along with growing demand for high-end brands in fashion and technology, Indian consumers are also looking to buy international products for everyday usage, like consumer packaged goods or housewares and appliances

  • Expansion in small cities and rural areas - Close to 65% of India’s population is concentrated in rural areas, which offers a great potential for growth

  • Back to normal social lives - Post Covid lockdowns and restrictions, people are welcoming back the previous normal social lives, which is leading to the resurgence of physical stores

Digital Transformation: Indian In-Store Retail Service Providers

In today’s world of virtual connectivity and upgraded technologies, Indian consumers are looking forward to a shopping experience that is guided by digital applications even for offline stores. Additionally, consumers are becoming more conscious about the security of their personal information and payment data that are available with the retailers. Considering this aspect, the Indian retail sector is actively stepping up their collaborations with tech companies for services such as digital ledgers, inventory management, and payments solutions.

Despite the growing spread of virtual shopping, Indian consumers are still inclined to buy products through in-store retail shops or Kinara stores (as popularly known in India). Keeping this in view, retailers are re-defining their service offerings and are becoming heavily dependent on technologies for meeting the requirements of the growing demand for swift and high-end services. In an attempt to compete with the growing online retail services, the in-store retailers in India are focussing on adopting and implementing digital practices that will lead to servicing consumers with greater efficiency. Mobile app based communications, advanced analytics, cloud services, digital marketing, and the Internet of Things (IOT) are among the innovations that are transforming the in-store retail industry of the country.

Key Aspects of Digital Transformation

To align with the changing consumer consumption pattern and buying behavior, Indian retailers are working on becoming operationally more efficient, while implementing cost-saving measures and ensuring a higher profitability. Optimisation of operation and cost remain a major focus of retailers, along with re-designing store portfolios and re-structuring product ranges to align with consumer requirements.

Restraining Factors

With every coin having two sides, the digital transformation initiatives by Indian retailers faces certain roadblocks on the way. The synthesis of multiple kinds of devices and virtual solutions causes hindrances in the successful implementation of digitization within the Indian retail sector.

  • Non-reliable Connectivity: Network failures are a major area of concern and can disrupt vital services involving internet connection

  • Cybersecurity Threats: IoT devices connected to internet are vulnerable to hacking, and data protection requires deeper layers of security due to its sensitive nature of personal and financial data

  • Integration Challenges: Successful application of IoT requires integration of multiple types of devices; and failure to efficiently integrate all devices can cause a lot of impediments, which arises as manufacturers have not yet reached a consensus regarding communication protocol and standards

  • Data overload and accuracy: There occurs difficulty in aggregating data for vital insights and analysis because of non-uniformity of data and unclear communication protocols

  • Cost overruns: Limited funding, constant requirement for upgrades and changes in rules and regulations often lead to cost overruns, which stands as a major concerns


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