The rat and mouse game between retail and ecommerce has been going on for the last few years with no clear winner coming out. However, in 2017, it seems the line between the two are merging, with several e-commerce portals starting brick and mortar shops to have an omni-channel medium to gain larger market share.\nBuyers are now digitally armed with countless websites and apps, which has put pressure on retail to re-innovate. This is despite that fact that according to the Hurun\u2019s Rich List 2017, only 15th of India\u2019s total population is online.\nSeveral retail chains are ramping up their game with apps, digital payments, chat bots and even offline augmented reality booths to attract customers in this \u2018digital-first\u2019 century.\nAccording to a report by India Brand Equity Foundation (IBEF), the Indian retail industry accounts for more than 10 percent of the Gross Domestic Product (GDP) and accounts for around 8 percent of the employment in the country.\nRanjit Satyanath, head-technology, Infinti Retail ( Croma) believes that in time to come, customer expectations from retail are only going to increase and retails will need to work like startups.\n\n\u201cStartups who do not have the baggage of existing systems and need to show immediate profit are disrupting set practices and creating new expectations in customers\u2019 minds. Established retailers need to install a startup like atmosphere within their organisations.While customers set their benchmarks based on expectations created by startups, retailers themselves seem to be shy of making similar investments in people, culture and technology. Existing systems and procedures need to questioned and re-engineered. Retailers should accept that they would be always in a state of continuous reconstruction,\u201d says, Satyanath.\n\nTechnology challenges on the way to Omni-channel\n\nJust like e-commerce has moved towards the path of becoming omni-channel, even retailers have started to include online channels to retain their market share. As retail moves to online, the whole inventory mechanism changes. They are moving towards model called Phygital.\nIn a phygital business, customer places her order through her app (digital). Shipping of the order is physical from the retailer. If a customer needs to return, they call the call center which is physical. The product being picked up is physical again. Return processed and credited to her Credit Card \/ Bank Account or payments made are in a digital mode.\n\nFor this, retails have to re-architect their inventory management. In a retail model, the inventory requires only adding and subtracting stock. However, as channels get added and the same inventory being up for web store, an accurate online inventory is now a basic requirement.\n\u201cSystems that were engineered to work end of day now need to work differently and constantly monitor stock levels across channels. Cross Docks and Direct Store Deliveries need to be maximized. Order \/ Reserve online, collect in-store is adding complexity to systems and processes,\u201d explain Satynath.\n\nHe adds that now more than ever before retailers will realize the need to integrate their systems with that of their suppliers for better visibility of inventory across the supply chain and faster movement.\n\n\u201c Not only IT systems but also in-store processes need to be re-crafted to make good on these promises. Inability to fulfill an order is the retailer\u2019s biggest nightmare since less than perfect delivery on promise is met with loud complaints on social channels,\u201d adds Satyanath.