From Kirana to concept store: Indian retail design in transition

Surender, how has store design in India changed over the past 10–15 years?

Surender Gnanaolivu: Store design in India has evolved from transactional formats to experience-led environments, driven by the rapid growth of organized retail (18% of total retail, Kearney-RAI) and the continued dominance yet modernization of unorganized retail (82%, IBEF). Retail has expanded well beyond metros, with Tier 2 and 3 cities accounting for over 55% of new store growth (CBRE), forcing brands to adapt formats for diverse, high-density markets.

Where is retail design in India heading – between local aesthetics and global trends?

Gnanaolivu: Retail design in India is moving toward a hybrid model that blends global systems with local cultural relevance. This is essential in a country where over 120 languages are spoken, with significant regional diversity in culture and consumption patterns. Consumers show higher engagement in environments that combine familiarity with modern expression, especially in Tier 2 and Tier 3 markets, which are driving a large share of retail growth. Human-centric design is also gaining importance as consumers increasingly value comfort, dwell time, and assisted discovery.

Which trends are overrated – and which should retailers prepare for now?

Gnanaolivu: Overrated trends include excessive digitization without ROI, as nearly 60% of global retail tech investments fail to deliver expected returns (BCG), and superficial “instagrammable” designs that do not translate into sales. Blind replication of global formats often fails in India’s diverse market conditions. This response has shown that retailers need modular and scalable store systems to support rapid expansion across diverse markets in India. Retailers have to prepare for data-integrated design, and experience-led yet cost-efficient formats will be critical to stay relevant and resilient.

How important is storytelling in the store compared to pure product presentation?

Gnanaolivu: Storytelling has become critical as product parity increases across categories. Categories like home improvement, furniture, wellness, luggage, and building materials, once largely present in unorganized retail formats, are now shifting to branded, self-discovery formats, contributing to organized retail growth. Clear product presentation, storytelling, and service remain essential, as over 70% of purchase decisions in India are still made in-store.

What does “phygital retail” mean in concrete terms in the Indian context?

Gnanaolivu: Phygital retail in India is driven by a young population, with a median age of about 28 years, and deep digital penetration, with over 650 million smartphone users. This is driving ROI in the investment in technology in high-density retail environments through tools like phy-gital assisted selling, endless aisle access, and faster checkout.

Retailers adopting omnichannel strategies are seeing 15–20% higher customer retention and improved sales productivity (McKinsey). Additionally, click-and-collect models, hyperlocal fulfilment, and ship-from-store capabilities are reducing delivery times by 20–30%, making physical stores integral to last-mile efficiency (RedSeer). The result is a tightly integrated ecosystem where stores are not just points of sale, but nodes of experience, fulfilment, and data capture.

What role does data play in decisions about retail design and store layout in India?

Gnanaolivu: Data has become central to retail viability in India due to high rentals, often 8–15% of revenue in prime locations, low margins, and compact store sizes (JLL India Retail Report). Over the last two decades, retailers have made significant investments in back-end technologies, namely ERP, supply chain management, and inventory systems to drive efficiency and control. Today, this data backbone is being extended to the front end through in-store analytics, customer tracking, and omnichannel integrations, enabling a more seamless and fully integrated retail ecosystem. Retailers are increasingly investing in tech tools and relying on data to optimize and improve store productivity in order to sustain their businesses. This is driving the adoption of tech-integrated solutions that capture and analyse data, enabling informed decisions on location, design, assortment-mix, layout, store presentation, and investments in designing, setting up, and operating physical stores.

What do only insiders understand about Indian retail that outsiders often miss?

Gnanaolivu: India is not a single market but a network of highly diverse micro-markets, where language, culture, climate, and consumption patterns shift every few hundred kilometres. What often gets underestimated is the sheer adaptability of the unorganized sector, which still accounts for nearly 82% of total retail, and is rapidly modernizing through better store design, merchandising, and digital adoption.

Insiders also understand that execution beats intent in India. Speed to market, cost control, inventory turns, and operational discipline matter far more than perfectly crafted design concepts. In a market projected to reach $2 trillion by 2032 (IBEF), margins are tight and real estate is expensive, so success depends on how efficiently a concept is rolled out and sustained on the ground.

Ultimately, success in India doesn’t come from applying global playbooks – it comes from deep local insight, continuous adaptation, and the ability to balance aspiration with affordability at scale.