60% of Indian retailers see technology as key to competitiveness, says PwC report

According to the survey conducted by PwC India across 120 retailers across nine categories,  53% of retail stores are yet to adopt tech solutions, and nearly 45% consumers prefer a combination of both online and offline channels for shopping. 

PwC India has launched a report titled, "The Retail Reinvention Paradigm: How brands could up their game," at the Retailers Association of India’s (RAI) Retail Leadership Summit held in Mumbai. According to the report, 60% of brick-and-mortar retailers surveyed believe that improved access to technology can empower them to enhance their competitiveness in this evolving market. The report emphasises the use of AI-driven analytics for personalised experiences, mobile apps for consumer engagement, and modern POS (Point of Sale) systems for efficiency.

The influence of e-commerce and quick commerce is increasingly reshaping Indian retail, with 34% of traditional retailers surveyed reporting negative impacts from online shopping. Traditional retailers are adapting to such a transformational market change by offering credit options, free home delivery and personalised services, while also looking at omnichannel strategies to stay competitive, the report said.

“However, our research shows that consumers want the best of both worlds—seamless digital convenience and the in-store experience. While online shopping dominates in personal product categories like apparel and beauty (preferred by over 50% of consumers), in-store purchases remain strong for family-related products such as fresh produce and home furnishings (preferred by 36%), highlighting the need for tactile engagement,” says the report.

In the light of these findings, the report introduces a comprehensive retail reinvention framework, guiding retailers to blend traditional and modern approaches. By embracing technology and focusing on experiential retail, retailers can create immersive consumer experiences that drive sustained growth, says the report.

The framework emphasises the integration of AI-driven analytics and mobile applications to enhance customer interactions and provide valuable insights into consumer behaviour. Additionally, it encourages retailers to leverage geographic nuances and consumer utility profiles to tailor their strategies effectively. By aligning channel actions with consumer preferences, retailers can optimise resource allocation and remain relevant in a rapidly evolving market landscape. This strategic approach not only enhances competitiveness but also fosters long-term customer loyalty and satisfaction, suggests the report.

Ravi Kapoor, Partner and Leader - Retail and Consumer, PwC India, emphasised the importance of integrating innovation with localised strategies. "Indian retailers need to navigate the complexities of e-commerce—balancing online and offline channels, optimising supply chains, and enhancing customer experience. The future of retail belongs to those who seamlessly integrate innovation with localised strategies, leveraging data analytics and consumer insights to tailor offerings and drive sustainable growth in a competitive market."

Raghav Narsalay, Partner and Leader - Research and Insights, PwC India, added, “Our research shows how dynamic the Indian retail landscape is and how the forces of technology combined with evolving consumer preferences across metros, Tier 1, Tier 2, and Tier 3 markets are driving retailers to innovate to maintain their competitive advantage. This requires a proactive approach towards embracing digital tools and fostering a culture of continuous improvement.”

Sanjay Dawar, Partner and Leader – One Consulting, PwC India, said, “Brands must adapt to shifting consumer preferences by using technology and tailored channel strategies to maximise relevance and impact. PwC’s Retail Reinvention Framework helps businesses navigate these complexities, ensuring optimal resource allocation, strategic decision-making, and the ability to anticipate market trends and consumer demands effectively."

Key insights from the report:

1. Omnichannel retail success is greater than the sum of its parts: Retailers are increasingly recognising the power of blending online and offline experiences, with 60% perceiving technology as a tool that can provide a key competitive edge. Despite this, 53% of retail stores are yet to adopt tech solutions. Nearly 45% consumers prefer a combination of both online and offline channels for shopping.
2. Quick Commerce is more common in metros and Tier 1 cities than in Tier 2 and Tier 3 cities: Quick commerce is reshaping retail dynamics in metros and Tier 1 cities, with 42% of metro and Tier 1 consumers prioritising rapid delivery for urgent needs. Over 65% of consumers in these areas rely on quick commerce for essentials like packaged foods. This trend has reduced foot traffic to physical stores by 28%, highlighting the shift towards convenience and immediacy.
3. Offline retailers strategise to thrive in digital retail landscape: Traditional retailers face challenges from the digital shift, with 34% reporting negative impacts from online shopping. To stay competitive, 64% are self-funding marketing efforts, emphasising the need for a strategic roadmap. Fairer logistics policies are perceived as crucial for equitable operations, ensuring retailers can navigate the evolving digital landscape effectively.
4. Offline retailers and consumers are reinventing themselves in different ways in the omnichannel evolution journey: In response to the evolving retail environment, 21% of retailers are exploring the concept of dark stores to streamline operations and cut costs, while 10% are already operating them. Consumers are increasingly prioritising flexible return policies (40%), efficient after-sales service (39%), and better payment options (39%). This is particularly important in Tier 2 and 3 cities, where 41% and 39% of consumers, respectively, emphasise the importance of robust after-sales support.