Growth of Omnichannel Retail in India

Until a few years ago, if we wanted to buy anything, it meant that we had to physically visit a store, pick up what we needed, pay, and leave. However, today, the way we buy products, services, and interact with them has fundamentally changed. 

Retailers have gone from being only shopfronts to being ecosystem builders with an omnichannel presence across physical stores. Websites and mobile apps- all integrated into a single unified experience for the customer.

The omnichannel revolution has seamlessly integrated diverse touchpoints to meet changing consumer demands across rural and urban markets. In 2025, retail contributes over 10% of the national GDP and employs nearly 8% of the workforce. With a market size of USD 1 trillion in 2024, the sector is also forecasted to nearly double to USD 2 trillion by 2030.

Even with the dominance of traditional brick-and-mortar stores, the future landscape of the retail market is set to be defined by an accelerated shift towards organized retail formats. 

Technological Advancement: the Heart of India’s Retail Revolution 

Omni channel’s success is largely driven by strategic adoption of advanced technology in India. The industry is rapidly integrating automation, AI, and digital payment systems to enhance efficiencies and deliver enriched customer experience. Innovations such as automated demand forecasting, voice and WhatsApp commerce, virtual try-ons within the fashion direct-to-consumer (D2C) segment are also changing how consumers engage with brands. AI-driven personalized interactions, frictionless physical-digital journeys are also being used by traditional retailers to captivate consumers.

The key drivers for the success includes smartphone usage which exceeds 75%, UPI dominating over 80% of digital payments, unified commerce platform making inventory and pricing, and innovations in last-mile logistics such as micro-fulfilment centers and same-day delivery services. The digital-savvy middle class in Tier-2 and Tier-3 cities are also fuelling this growth through changing purchasing behaviour. 

As we stand at this inflection point, India must ensure that its retail transformation is future-ready, transformative and inclusive, unlocking growth for businesses while enriching the lives of consumers in a growing Bharat.

Policy Support 

Government efforts have accelerated the adoption and growth of omni-channel retail in India through digital inclusion, safer payment system, reduced structural barriers, and enhancing competitiveness across the retail sector. The Open Network for Digital Commons (ONDC), a government-backed non-profit aims to promote open networks for all aspects of goods and services over digital or electronic networks. By breaking the  constraints of closed market and monopolistic players, it offers to create an inclusive platform for digital commerce. It has seen 150 million+ transactions and 7 lakh+ sellers & service providers in just three years since its launch, showcasing its potential to transform this sector. 

Guidelines by Reserve Bank of India and Payment and Settlement System Act, 2007, have also ensured secure and seamless digital payments across online and offline channels.

With the Digital India initiative, the government is promoting digital literacy nationwide and laying a strong foundation for omnichannel retail. Robust digital infrastructure is also ensuring a unified shopping experience.

Addressing Key Challenges 

While omni-channel retail blends expansive reach with data-driven insights, there are some challenges that need to be addressed to fully optimize the sector. 

• Many retailers continue to operate on a disconnected system where inventory, CRM, POS, and e-commerce platforms function in silos. 
• Real-time visibility of inventory across warehouses and stores is often low, leading to fulfilment complexities. 
• A key challenge for retailers is also maintaining data privacy and payment security while meeting customer’s need for speed, convenience, and accuracy.
• Having a broader base of consumers also requires stronger digital access and affordability. With India’s internet infrastructure still being in the nascent stage and a majority of the population not being able to afford a smartphone, scaling omnichannel retail is difficult. 
• Low digital literacy, especially in semi-urban and rural markets, also compels retailers to invest in consumer education, multilingual support, and simplified digital tools, adding to their costs and hampering the overall experience. 
• Different margins, customer expectations and balancing pricing consistently is difficult. This can also lead to channel conflicts between retail partners, distributors, and own online platforms.
• While UPI holds a huge share in digital transactions in terms of volume, there is also a need to focus on increasing its use cases when it comes to high-value purchases as currently these purchases are still going through cards or net banking due to transaction limits and concerts around security. 

Way Forward 

It is important to note that retailers that invest in real-time inventory management, localised micro-fulfilment networks, and unified data platforms can turn these challenges into strategic advantages. Providing outreach through local influencers, rural entrepreneurs, and targeted training programs will also play a significant role in consumer education and help them easily adopt digital commerce. 

While the need for investment is large, it can lead to faster order fulfilment, seamless shopping experience, and enhanced inventory visibility. To position themselves for sustained growth in India’s evolving retail landscape, retailers must move with the market, growing technology, and changing consumer needs.