Indian retail is evolving fast, and businesses are turning to AI to keep up. Onebeat, an Israel-based inventory management firm, helps brands optimise stock and predict demand, aiming for 3X growth in India. On one end, it works with giants like Titan, Tanishq, Pantaloons, and Max Fashion, while also partnering with emerging players like Being Human, Tazo, and Just In Time. In an exclusive chat with Fortune India, Roei Raz, VP & head of APAC at Onebeat, discusses how AI is reshaping retail, the challenges in adoption, and what’s next for the industry.
Q: What space does Onebeat operate in and why do retailers need tech now?
A: If you look in the last decade, there are 173 US brands that went bankrupt. I think only sometime back we heard about Forever 21 that filed for bankruptcy for the second time. If you try to identify a common thread between all these companies, what we can say is that they somewhat failed to adapt to market changes.
Now, we could categorise three main changes in the market in the last decade that are about consumer behaviour, changes in consumer behaviour. The first one, and I think you’ll be able to connect with all of them. The first one is the strive for personalisation.
So, consumers want the product that meets their specific needs, their specifications. And as a result, they demand bigger assortment, more choices. So retailers need to offer bigger choices and bigger assortments.
The second thing is the need for instant gratification. So, it’s not only that they want that this is the product that they want, they also want it now. They want it immediately.
So that puts pressure on brands to increase the reach, to be closer to the customer, but also keep higher inventories to ensure availability. And the third is the need for freshness that is also intensified with time. The need for freshness simply drives excitement, and retailers understand the constant need for freshness. And as a result of that, the product life cycle, the life of the product, is getting shorter and shorter, meaning that we have less time to sell the product at full price as a retailer.
Now, what is the outcome of all these behaviours when you are failing to adapt to these changes? Inventory goes up—skyrocketing inventory. There is a lot of cash, capital tied up in inventory that is not moving. Margins are down simply because the full price sales—sales at full price—are down.
The benchmark today is about 50 percent. If you take an industry like fashion, one of the most prominent retail industries, then it’s about 50 percent full price sell-through. In India, I think the average is around 45 percent full price sell-through. And on top of that, there is about 15 percent of the inventory that is waste, that is just left over at the end of the season. So with all this, it’s very difficult to build resilience, to keep profitability sustainable.
We could identify three root causes to the fact that they cannot adapt. One of these comes to the picture. The first thing is that there is heavy reliance on forecasts. Forecasts are good for planning, long planning cycles to know what to buy, but they are meaningless in a changing environment with all these dynamics on an ongoing basis to decide how to distribute and redistribute your stock between stores, because it becomes very noisy.
The second thing is that traditional approaches and traditional systems for retail are all rule-based. They are very rigid. All these rules can become obsolete with changes in demand patterns, with the changes in trends.
And the third thing is the fact that there is a lot of reliance on analytics. So, retailers strive to get insights from their data. By the way, they also see these trends. It’s not that they are blind to the trends. Knowing these trends, they try to rely on data to draw insights from analytics. But the way analytics are designed, by the time you get the insight, it’s already meaningless. You already wasted the opportunity.
The idea of Onebeat is to offer retailers a SaaS tool that uses advanced technology. Eventually, Onebeat is an execution tool that helps retailers, after they’ve done their plan for the season, to help them fulfil this plan in the best possible way, given the changing market conditions, and allow them eventually to sell more at a full price.
Q: Could you share an example from India?
A: We have dozens of examples globally, but India is one of the places—one of the key places—that is responsible for Onebeat’s evolution.
In India, you can take a brand like Being Human. And when we partnered with them, they saw the opportunity to improve their sell-through with Onebeat, to streamline the replenishment processes and redistribution of products between stores. By redistribution, I mean moving inventory, moving products between stores before the end of the product’s life cycle, so they continue to sell them at full price.
Altogether, if you look at what they saw in the first six months—results that are in the public domain—they recorded a 10% increase in full price sell-through. If you measure the season sell-through, the three-month season sell-through, and look specifically at the portion sold at full price, the benchmark was 50%, and they achieved a 10% improvement in that.
At the same time, they could manage store inventory with 23% less stock, which allowed for more freshness. So when you walk into a store, you see more fresh products, and there’s more shelf space to accommodate newness and freshness—something that is a very important need for the customer.
At the same time, they can achieve higher margins on what they sell. That’s the main benefit for them, which also contributes to long-term resilience.
Q: Earlier, technology and cloud were considered discretionary spending for Indian retailers. Do you think they have now become a necessary investment? Are brands actively integrating tech solutions, especially in retail?
A: India is one of the top three retail economies in the world, and organised retail here is growing very fast. We operate within organised retail, and it’s not just new brands emerging—existing brands are also expanding their reach to second- and third-tier cities. So, when we look at the next five years, we see a market that is continuously on the rise.
At the same time, consumer behaviour trends in India are taken to the extreme compared to other markets. If we talk about personalisation, for instance, you won’t find jewellery showrooms like those in India anywhere else in the world. Here, a single store may showcase 10,000 pieces of precious metals and stones—far beyond the saturation point—but that’s what the Indian consumer expects.
Similarly, the demand for instant gratification has led to innovations like quick commerce and dark stores. In India, customer tolerance time has dropped from days to mere minutes, which is unmatched globally. Even in markets like the US, we don’t see this level of urgency.
When it comes to product life cycles, fast fashion in India is growing at an extraordinary pace. We recorded a 40% increase last year in fast fashion compared to just 6% in traditional fashion. This clearly indicates a massive shift.
With these three trends combined, inventory management in India is almost twice as complex as in Western markets. That’s why, in a way, it’s a win-win—we need India as much as India needs us.
That said, there’s still a lot of market education needed. Apart from the large corporate groups that actively invest in technology, most of the organised retail sector in India is still not accustomed to making such investments. At the end of the day, it’s an ROI-driven decision—once they see the value, adoption becomes easy.
Q: What are your expansion plans in India, and what strategies have you employed for further growth?
A: We see tremendous potential in India, and my target for the year is to achieve 3x growth here. To make this achievable, we are focusing not only on national brands—most of whom we already know and are in discussions with—but also on regional players.
Initially, we assumed regional brands might not be ready for technology adoption. However, after engaging with them, we realised their need for technology is just as significant as that of national brands. Moreover, they are highly open to ROI-driven deals.
For example, one of the regional brands we recently published a case study on is White House, a Hyderabad-based retailer. They currently operate around 90 stores and are expanding rapidly. Despite being a regional player, their leadership has a visionary approach. They recognised that adopting technology could give them a competitive edge in their market.
In just six months, they achieved results comparable to those of national brands. They reduced slow-moving stock surplus by 15%, improved the availability of fast-moving products in stores by 28%, and increased full-price sales by 10%. These are remarkable numbers, especially for a growing regional brand. Such improvements give them greater flexibility in planning their expansion. By freeing up cash from stores while simultaneously increasing profitability, they now have the ability to accelerate their growth plans.
Q: Instant gratification is not a trend you are seeing in other regions or economies. But are global behaviours or trends shaping how the Indian retail sector works or how consumer behaviour is adapting and changing? Are there some trends you see making their way here?
A: I think the trends that I see in India are the life cycle of products in any industry—by the way, even industries with relatively long-life cycle products—it is getting shorter. Because in order to infuse demand, there is a need for freshness all the time.
I see the need for instant gratification. I see that tolerance time is getting really, really short. Almost every retailer today sees a reduction in tolerance time. And now they are evaluating their ability to do omnichannel.
They realise that the omnichannel process is obsolete because they need to look at the frequency of omnichannel on an hourly or even minute-by-minute basis rather than daily. So, this is another trend definitely.
And the fact that assortment is growing—I think fast fashion specifically is dictating new norms here. I don’t think retailers will be able to get away with not increasing their assortment over time. They are global trends, but they are further intensified in India.
Q: Since consumer behaviour is changing rapidly and even disruptors in technology are evolving too fast to keep up with, are retailers in India able to balance overstocking or stockouts while maintaining profitability?
A: Yes. I think that’s really the space where we need advanced technology. It is very tough to manage with human capabilities and traditional tools—definitely not possible in Excel. There is a need to go beyond the data resolution that is being used, and there is a need to work on big data.
And this is where AI can help a lot. People think about AI as – I will use AI to predict the future. So, yeah, there is a field in AI about long-term prediction and how to consider different parameters in that prediction—macroeconomics and external factors. But AI can also help us get very quick insights and modify our process quickly through ongoing learning. Where we use AI is mostly in execution. Just to give you an idea—take fast fashion as an example.
In fast fashion, the life cycle of a product can be as short as five weeks because brands are introducing hundreds of designs, sometimes on a daily basis. With the giants, it can be a hundred designs per day. Now, with such short life cycles, there isn’t enough time to respond. We need the ability to get predictions very fast—not by just collecting signals and trying to create a forecast, but by identifying similar products based on demand behaviour and clustering them together. This way, we can determine with higher certainty which stores can sell a product and which cannot.
The second need is optimising decisions. At any given point, there are hundreds of possible transactions that can be made by mobilising inventory between stores. In fast fashion, we’re not just moving products—we’re moving sizes. We need to consolidate sizes into sets, and that can be overwhelming. Because of this complexity, retailers typically do it infrequently—maybe once a season or once a month.
We need to move to something much more frequent. With technology, we can reduce this massive process into identifying only cost-effective transfers and doing them in manageable chunks week over week. The goal is to achieve just a few percentage points of improvement in full-price sales—that alone is enough to turn unviable stores into profitable ones.
Q: Most retailers and brands have integrated AI in some way. But do you see an actual return on investment? Can they quantify the financial benefits of their AI investments?
A: The way I put it is like this—I’m working in a retail tech company, and we sell tech. But I look at AI from a business point of view, not a tech point of view. AI is a tactic, not the objective.
Eventually, the objective needs to be very well-defined. AI should be used as a tactic to achieve that objective, and it needs to be measurable—whether you achieved your objective or not. Just adopting AI because it’s a buzzword is not a good idea.
We come from a Theory of Constraints (TOC) background, and we are very focused on constraints. The ultimate constraint for retail is traffic—it’s the only thing they cannot control. Beyond that, they need to exploit traffic as much as possible. That means achieving higher sales conversion, better generalisation, and, if possible, increasing ticket size.
If AI can help them achieve those goals, then yes, it’s a big business improvement. But it has to be clearly defined with KPIs to evaluate its impact. Ultimately, whether AI benefits a business depends on the specific technology they’ve adopted and how effectively it aligns with their objectives.
