Omnichannel retail has become the buzzword in the ever-evolving world of commerce. The idea of creating a seamless shopping experience across physical stores, e-commerce platforms, and quick commerce sounds like the future everyone aspires to. With promises of elevated customer satisfaction, improved brand loyalty, and unparalleled convenience, omnichannel strategies have become essential for survival in today’s competitive retail landscape. Yet, behind the glittering façade of convenience lies a labyrinth of operational challenges that often remain overlooked.

From inventory nightmares to reconciliation hurdles, omnichannel retailing is proving to be a double-edged sword. Industry stalwarts like Tushar Ved, President of Apparel Group India, Rajesh Jain, Managing Director and CEO of Lacoste India, Vineet Gautam, CEO and Country Head of Bestseller India, and Naiyya Saggi, Group Co-Founder of Good Glamm Group, share their candid insights into the trials and tribulations of embracing this model. From managing stock returns that seem to vanish into thin air to dealing with mounting GST complications and the inefficiencies of cross-channel inventory management, these leaders uncover why omnichannel is as much about caution as it is about innovation.

What does it take to master omnichannel retail in a market as diverse and complex as India? Let’s dive into the untold challenges that retailers face as they attempt to unify the online and offline worlds while grappling with systemic inefficiencies, customer expectations, and logistical bottlenecks.

The Allure of Omnichannel

Omnichannel retail promises convenience for customers and increased revenue streams for businesses. Theoretically, it sounds like a dream: customers can buy online, pick up in-store, return anywhere, and still feel catered to at every touchpoint.

As Rajesh Jain points out, "Omnichannel as a concept is beautiful. It’s good for customer satisfaction and brand reach. However, implementation is an entirely different story."

Tushar Ved adds, “I am all for omnichannel but I'm not for omnichannel from the retail store!”

For brands like Lacoste, Bestseller, and Apparel Group, inventory management is the Achilles' heel of omnichannel operations. Tushar Ved emphasizes that serving e-commerce orders from retail stores disrupts in-store customer experience. "The biggest challenge in omnichannel is fulfilling orders from retail stores. It diverts focus from in-store customers and creates issues like unplanned marketplace returns and even counterfeit products. While I fully support omnichannel, I believe it should be driven efficiently from distribution centers—not retail stores—unless your operations are exceptionally streamlined," he adds. "You lose focus on the walk-in customer when your store becomes a mini-warehouse for online orders. Worse, when marketplaces return products, they often bring back items that are damaged, counterfeit, or not even your brand. It’s a nightmare to reconcile."

Vineet Gautam echoes this concern, explaining how inventory reconciliation can turn into chaos. "Omnichannel demands that your inventory is listed accurately across all platforms. But when your stock is moving between online, offline, and third-party marketplaces, the discrepancies become impossible to track."

This mismanagement of inventory can result in unhappy customers, lost sales, and revenue leaks.

Returns and the Black Hole of Reconciliation

The modern consumer expects liberal return policies, but these come at a steep cost to retailers. Tushar Ved candidly describes the phenomenon of "returns in the air."

"The customer has returned the product, but it’s neither with them, nor the marketplace, nor us. It’s somewhere in transit for 30 to 60 days. By the time it’s reconciled, the item is out of season and must be discounted," he laments.

Rajesh Jain further elaborates on the added complexity of GST regulations, which mandate that returned goods must go back to the state of origin. This creates a logistical nightmare, especially for brands with pan-India operations. "It’s not just about returns; every item must go through a refinishing process before it can be reshelved. This adds time and cost, making omnichannel operations prohibitively expensive," he explains.

The Revenue Dilemma

Omnichannel retail is also plagued by a fundamental financial problem: profitability. Despite its appeal, many brands find that omnichannel does not generate enough revenue to justify its costs. Vineet Gautam candidly shares, "We had a ₹150 crore omnichannel business that I shut down overnight. It wasn’t making money, and the operational inefficiencies were draining resources." From transportation costs to mall commission fees for products sold and returned across locations, omnichannel often leads to double or triple charges for the same item.

Understanding the Customer Psyche

Despite these operational challenges, brands cannot ignore the rising demand for omnichannel experiences. Naiyya Saggi highlights the importance of understanding customer behavior to make omnichannel work. "In India, we often jump onto the omnichannel bandwagon without questioning its relevance for our business model. What does the customer truly want? If you’re in a high-trust, high-margin category like furniture or electronics, omnichannel can be a game-changer. But for fast fashion or impulse-driven purchases, the returns may not justify the investment," she notes.

Rajesh Jain points out another critical insight: "Customers who come to premium stores want instant gratification. If the product isn’t available immediately, they don’t want to wait for a next-day delivery—they’d rather buy online from the start."

Strategic Omnichannel Adoption

So, how can brands navigate the omnichannel maze? Here are some solutions proposed by the leaders:

Streamline Inventory Management

Tushar Ved suggests keeping e-commerce fulfillment separate from retail store inventory. "Operate your e-commerce through dedicated distribution centers. Don’t disrupt the in-store customer experience," he advises.

Use Technology to Reconcile

Vineet Gautam sees a major use case for artificial intelligence in omnichannel operations. "AI can help solve inventory reconciliation issues by providing real-time visibility and reducing manual errors," he says.

Tailor Omnichannel Strategies to the Brand

Naiyya Saggi stresses the importance of aligning omnichannel strategies with a brand’s identity. "What works for Apple or Dyson may not work for fast fashion. Omnichannel is not a one-size-fits-all solution," she says.

Tighten Return Policies

Brands like Aldo and Victoria’s Secret, under Apparel Group India, have taken a firm stand against cash-on-delivery (COD) to minimize return rates. "We are clear about not offering COD. It’s a tough decision, but it saves us from dealing with excessive returns," says Tushar Ved.

Focus on Customer Experience, Not Just Convenience

While omnichannel is about offering convenience, Rajesh Jain believes that customer experience should take precedence. "Invest in creating seamless offline experiences that make customers feel valued," he advises.

Quick Commerce: A Double-Edged Sword

As brands debate the merits of omnichannel, quick commerce emerges as a potential disruptor. However, Rajesh Jain warns that it may replicate the same pitfalls.

"Quick commerce looks appealing, but the costs and operational challenges are similar to omnichannel. It’s essential to address these issues before diving in," he cautions.

Omnichannel retail is no longer optional; it’s a necessity in today’s connected world. However, as these industry leaders reveal, the journey is fraught with challenges. From inventory mismanagement to profit erosion and customer behavior quirks, retailers must approach omnichannel with caution, clarity, and a commitment to building robust systems.

As Naiyya Saggi aptly puts it, "Omnichannel is not just a buzzword. It’s a complex, evolving strategy that requires thoughtful implementation tailored to your brand’s unique needs." For Indian retailers, the omnichannel conundrum is a riddle that demands innovation, patience, and a keen understanding of their customers.