How Offline Retail Stores Are Focusing On the Hybrid Business Model
How Offline Retail Stores Are Focusing On the Hybrid Business Model

The Indian retail sector has witnessed some of the drastic changes of the decade just in the past year. Consumer behavior has been deeply affected by the pandemic, with over 76 percent of people moving towards e-commerce. India, which has over 624 million internet users saw a steep spike in the adoption of shopping apps since the lockdown in April 2020.

This represented a challenge to the retail sector in India, the majority of whom still operate in the offline model. The brick-and-mortar model is still lurking amid the uncertainty due to the pandemic, the answer to optimal retailing for offline retailers is to embrace the click-and-mortar business strategy and paving their way forward. 

While there are some green shoots of recovery, the future obviously lies in the hybrid business model. 

Hybrid Model: The Answer to Optimal Retailing for Offline Retailers

COVID-19 created challenges in both access to the customer and access to stocks. Supply chains were deeply affected, particularly for the smaller brick-and-mortar stores. Larger companies were also required to realign their working strategies and improvise processes and transform operations by introducing more digitization and automation in day-to-day practices. 

With the businesses coming to a standstill, the concept of omnichannel retailing or hybrid business approach became increasingly popular among offline retailers. Given the complementary strengths of the physical and online channels, this hybrid structure is beginning to emerge as the new face of retail. The most popular narrative of this concept comes out is the way Kirana stores owners have adopted digital technology, from receiving orders online to the fulfillment of the order through hyperlocal integrated chains and to digital payments. And this became a lifeline for the country during the lockdown. 

This helped the retailer further expand its reach to Tier II and Tier III cities and towns due to the pandemic. The remote areas of the country are now given the benefits of that of a metropolitan city because of the deep digital penetration. Big e-commerce brands witnessed a massive spike in consumer buying behavior from these locations. This has also called for a geographical spread investment and enhanced customer experience which otherwise many brick-and-mortar retailers are struggling to get started. 

According to Forrester Research, in 2020, India's retail sector was estimated at US$ 883 billion, with grocery retail accounting for US$ 608 billion. And by 2024, the market is projected to reach ~US$ 1.3 trillion.

With the announcement from the Government of India allowing 100 percent FDI in the online retail of goods and services through the automatic route. And more the focus to improve digital infrastructure in Tier II and Tier III markets has created a favorable surge in employment opportunities in this sector.

Hybrid Model is the Future of Retail 

Today it is not just about offline or online but O+O (Offline plus Online) business. Online and Offline - which is a mix of both traditional and online channels into a digitally enabled ecosystem. This also includes an interplay of tech solutions and fully leveraged digital-savvy employees and customers. 

The factors that are enabling the rapid transformation of the offline retail sector are the personalized experience, digitalized operations, integrated supply chain, and fintech acting as the backbone to the O+O framework. The massive data-led insights and the adoption of cutting-edge techs such as AI and Cloud have aided the degree of personalization on a large scale in the retail sector. The operations and in-store experience are combined with the back-end systems including the inventory management. This has resulted in an integrated supply chain that enhanced the local delivery capabilities.

Other factors like better connectivity, the rise of digital transactions, and contactless payments across the board have massively contributed to the transformation in the offline retail sector. 

In the process, the retail sector has fabricated a massive opportunity for the country to unfold over the next 10 years which will affect the retail industry growth and boost employment opportunities in both organized and unorganized sectors. 

And with the sector going digital, tech talent will be in absolute demand in the coming years. Gig workers are expected to receive more job opportunities in the retail sector. Employees with new-age skills like communication, big data, cybersecurity, and AI job roles are expected to flourish in the retail sector. The sector is expected to create millions of jobs in the near future.

The hybrid business model is expected to expand online-led exports in the next few years.


The shift to hybrid business models in the retail sector was largely empowered by technology. It helped retailers in giving real-time information to consumers to make a switch very quickly if their needs aren’t met. 

It is important to consider customer’s convenience while incorporating the hybrid retail model that is related to store layout, e-commerce, and product availability.

Besides formulation of National Retail and E-Commerce policy in its final phase, is indeed to be a huge step forward in understanding the sector’s true potential in the next decade or so. And with the retail industry heading towards digital transformation, the best approach for offline retailers is to embrace the new normal in the retail world and should make the long-term strategy of an online business. 

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