India’s organised retail sector is grappling with a major operational challenge, with inefficiencies in internal logistics leading to annual losses exceeding ₹2,000 crore, according to a report by ClickPost.
The study, based on data from 48 omnichannel brands covering over 15,000 stores and 7.2 million shipments between January 2025 and January 2026, highlights a critical imbalance: while last-mile delivery to customers has improved significantly, internal inventory movement remains slow and fragmented.
Bottlenecks Within Retail Networks
The report identifies delays in transferring inventory between stores and warehouses as the key pain point. Heavy reliance on manual processes—such as emails and spreadsheets—continues to hamper efficiency, with nearly 85% of brands yet to adopt automation.
These inefficiencies result in unsold goods remaining stuck within the system, locking up working capital and weakening sales performance. During peak sale periods, the issue intensifies sharply.
In one example, a 150-store fashion brand saw return processing times surge from just 0.2 days to 13 days during end-of-season sales. Out of ₹6 crore worth of returns in January, ₹2.6 crore remained tied up due to delays. Even post-sale, return timelines averaged six days, indicating persistent inefficiencies.
Manual Systems Dragging Performance
Manual logistics systems are proving significantly less effective:
First-attempt pickup success rates stand at only 30–40%, compared to over 90% for automated systems
Operations can be up to five times slower
Large chains face delays of up to two weeks per cycle
For many retailers, this translates into losses of ₹40–50 lakh per sale cycle, often exceeding ₹1 crore annually when missed sales opportunities are included.
Rising Complexity, Shrinking Timelines
Retail cycles are shrinking rapidly, particularly in fashion, where product lifecycles have dropped from around 90 days to just 15–20 days. This leaves little room for delays, as demand can shift before inventory reaches the right location.
At the same time, sale events now see volumes surge three to four times, placing additional strain on already inefficient systems. Multi-node supply chains involving stores, warehouses, and distribution hubs further complicate coordination.
Operational gaps are also evident in routine processes:
10–15% invoice error rate, triggering around 1,500 disputes monthly
Teams spending nearly 65 hours daily resolving discrepancies
8–12% loss in potential sales during peak periods due to stock unavailability
A Growing Cost Burden
The report estimates that individual brands relying on manual systems lose between ₹5 crore and ₹15 crore annually. Across the sector, cumulative losses exceed ₹2,000 crore each year.
The findings underline that improving internal inventory movement could be as crucial as last-mile delivery in driving retail growth. Faster, automated logistics systems are increasingly becoming essential for sustaining efficiency and competitiveness in India’s evolving retail landscape.
