Why experiential retail is more than just a trend in India

One would assume that in the age of e-commerce, where almost everything under the sun can be ordered with a click of a button, retail is not something brands would bet on. However, the reality is quite different, for even brands that started with e-commerce-only models are now realising the value and potential of a good retail experience.

While retail is one of the oldest models for all kinds of consumer brands, the modern retail experience demands a revolution, as the old model of simply opening a shop in a buzzing neighbourhood doesn’t really cut it.

This is where experiential retail comes into the picture. It is the evolution of retail into something beyond simply walking into a store, purchasing an item, and leaving. Experiential retail isn’t just a trend—it marks a fundamental shift in how brands connect with consumers.

As Gen Z and Millennials seek deeper, more immersive interactions, stores are transforming from transactional spaces into sensory experiences. Success today is no longer just about sales but about meaningful brand resonance.

For many Indian consumers today, value isn’t just in what they buy—but in how they feel when they buy it. The idea of “retail therapy” has transformed into a desire for engagement, expression, and emotional connection.

According to the Experiential Retail Index, a compelling 78% of Indian consumers in 2024 said they would rather spend on experiences than just products.

This shift is even more pronounced among younger demographics, who gravitate towards brands that reflect their personalities and values. With India’s retail sector projected to hit $2 trillion by 2032, experiential retail will be a major driver of this growth.

Retail today is as much about the vibe as it is about the value. Shoppers are deeply influenced by how a space feels—the lighting, music, scent, and spatial design play a psychological role in how customers perceive and remember a brand.

Retailers have embraced scent branding and curated in-store music to build inviting atmospheres that stay with customers. Consider IKEA’s experience stores with mock homes and interactive zones, which go beyond showcasing furniture—they invite customers to visualise and feel these products as part of their everyday lives.

What makes today’s retail truly experiential is the intelligence behind it. Armed with AI, machine learning, and robust analytics, retailers are creating hyper-personalised journeys for shoppers.

From curated recommendations to reshaping store layouts based on behavioural data, brands are getting smarter—and closer—to their customers. A 2024 study reveals that over 90% of Indians are willing to provide personal data for a personalised brand experience.

Whether it’s a timely offer or a layout that anticipates footfall patterns, data is turning shopping into a one-of-a-kind experience each time.

Welcome to the phygital era, where digital tech meets physical retail to create immersive, next-gen shopping experiences. Indian brands are embracing tools like smart mirrors, AR/VR try-ons, and RFID-based systems to make stores more intuitive and engaging.

An excellent example of these innovative experiences would be certain new-age brands that use foot scanners and GAIT analysis to detect foot types and issues, helping them tailor footwear solutions through detailed, tech-enabled scans. From AI-powered trial rooms to 3D virtual fittings, these innovations bridge the gap between online convenience and in-store interaction.

At the same time, retail is becoming a storytelling medium. Brands are using in-store pop-ups, themed installations, and collaborations with local creators to build emotional connections.

In a world where shoppers love to share what they experience, live demos and community events—especially in Tier II/III cities—are turning stores into social moments that spark buzz, drive footfall, and foster loyalty.

Beyond the glitz and feel-good factor, experiential retail delivers tangible returns. Engaged customers spend more, stay longer, and keep coming back—reducing acquisition costs and boosting lifetime value.

With India’s personalised retail market poised to grow at a CAGR of 30%, reaching $40–45 billion this year, the economic case for experiential retail is rock-solid. It’s not just about delighting consumers—it’s about building a smarter, more sustainable model of retail growth.

From global icons to Indian favourites, brands embracing experiential retail are seeing stronger engagement, loyalty, and brand recall. In a fast-evolving landscape, stores are no longer just for shopping—they're spaces to connect, feel inspired, and build lasting relationships. Experiential retail isn’t a novelty; it’s the future.

(Our guest author, Ganesh Sonawane, is the Co-founder and CEO at Frido, a company focused on comfort and innovation)