How Ecommerce Is Affecting Retail Stores: The 2026 Transformation Guide

Introduction

The signals have been visible for more than a decade.

In 2014, when ecommerce represented roughly 6% of U.S. retail sales, analysts warned that physical retail was not evolving fast enough to survive. At the time, that view was dismissed as alarmist. Department stores like Macy’s and Sears still dominated the rankings. Malls were struggling but not yet collapsing. And the prevailing belief was that consumers would always prefer to touch, feel, and experience products in person .

That argument missed something fundamental: consumer behavior had already shifted; the data simply hadn’t caught up.

As we enter 2026, the retail landscape has been permanently transformed. Excluding autos, gas, and much of grocery—categories where in-person shopping persists largely out of necessity rather than preference—online and digitally influenced transactions now outweigh purely physical sales for the first time . This crossover feels sudden only because the industry has been looking at the wrong numbers—and taking careless comfort in them.

Headline Census data places ecommerce penetration at about 16 to 17% of retail sales in 2025. But that figure relies on a denominator that masks where consumer choice actually exists. In discretionary, higher-margin categories—apparel, electronics, home, beauty, and general merchandise—online already accounts for anywhere between 30 to 50% of sales . These are the categories that once sustained malls and department stores.

This guide is your definitive resource on how ecommerce is affecting retail stores in 2026. Drawing on verified industry data from AlixPartners, Federal Reserve, PYMNTS, and real-world case studies from Cisco, Vijay Sales, and Spar Slovenia, you will learn:

The structural decline of traditional retail formats and why department stores became obsolete
The true penetration of ecommerce when measured against discretionary spending
How physical stores are evolving into fulfillment centers, showrooms, and experiential destinations
The rise of agentic AI and zero-click buying—and what it means for physical retail
Real-world examples: how Cisco Store achieved 40% revenue growth through data-driven physical retail, how Vijay Sales nearly doubled online orders through digital transformation, and how Spar Slovenia grew store sales 7% by adding on-demand delivery
The capital challenges facing retailers attempting to transform their store networks
Expert strategies for surviving and thriving in the new retail reality

Whether you’re a retailer planning your next move, an investor evaluating retail assets, or simply an observer of changing consumer behavior, this guide provides the clarity you need.

H2: The Structural Decline of Traditional Retail

H3: The Department Store Was the Real Inflection Point

This shift did not begin with Amazon, nor did it start with failing malls. It began when department stores lost their reason for existing .

In 1990, department stores accounted for about 14.5% of U.S. retail sales. By 2024, their share had fallen to 0.5%. Dollar sales peaked in 2001 and declined steadily from there .

That decline mattered because department stores were not just another retail format. They were the organizing infrastructure of physical retail. They aggregated demand, curated selection, and subsidized the economics of the mall. Specialty retailers depended on their foot traffic. When the anchors weakened, the ecosystem built around them became unstable.

By late 2024, the consequences were impossible to ignore. Roughly 1,100 U.S. malls remained, with vacancy rates nearing 9% —more than double the broader retail average. Class C malls exceeded 13%. Anchor closures drained foot traffic, and the smaller retailers that relied on it followed .

Even luxury could not escape the logic. The Saks–Neiman Marcus merger in 2024 was framed as a digital-era reinvention, but it increasingly looked like consolidation under pressure. Its bankruptcy at the end of 2025 is likely to put dozens of Class A properties at risk as store closures shift from defensive moves to strategic necessity .

The department store did not fail because it failed to innovate. It failed because its core function—the physical aggregation and curation of products—became obsolete .

H3: What Department Stores Provided Didn’t Vanish. It Moved.

What department stores once provided did not disappear. It just moved online .

The new anchors are no longer buildings. They are:

Search engines that make finding products instantaneous
Marketplaces that offer infinite selection without inventory risk
Social feeds that shape influence and discovery
Recommendation algorithms that personalize curation
AI agents that organize commerce dynamically and personally, in seconds

For more than a century, department stores solved the “too much choice” problem by curating assortments consumers trusted. Digital platforms took over that role by making search cheap and selection infinite. AI agents now take it one step further by acting on the consumer’s behalf—finding, comparing, and deciding without requiring the consumer to browse at all .

This is the structural reason physical retail lost its advantage. Once aggregation and discovery could happen digitally, continuously, and at scale, the economics of gathering inventory under one roof no longer delivered value to the consumer.

H2: The Real Numbers: Ecommerce Penetration in 2026

H3: Beyond the Headline Statistics

Headline Census data places ecommerce penetration at about 16 to 17% of retail sales in 2025. That figure has long been used to argue that brick-and-mortar remains dominant. But it relies on a denominator that is a mirage .

When you exclude categories where in-person shopping persists largely out of necessity rather than preference—autos, gas, and much of grocery—the picture changes dramatically. In discretionary, higher-margin categories that once sustained malls and department stores, online already accounts for anywhere between 30 to 50% of sales .

Even grocery, long considered the final physical store holdout, continues its gradual digital migration as pickup and delivery become routine. Once consumers experience the convenience of ordering online, the physical aisle starts to feel less like discovery and more like friction .

Reframe the retail universe this way, and the crossover is no longer debatable. The story was simply delayed in the telling .

H3: The Slowing Shift

Between the third quarter of 2024 and the third quarter of 2025, ecommerce’s share of retail inched up just 0.2 percentage points, from 16.2% to 16.4% , per Federal Reserve data . This suggests that the rapid shift from brick-and-mortar to ecommerce may be approaching an equilibrium.

As the shift slows, the battle is now store against store to win share . And friction, once deemed a killer, defines some of the winners. Those gaining on the biggest players have made value plays, but with smaller SKU lists and consumers clamoring for limited-edition or seasonal offerings that may have sold out before customers can get their hands on the item.

The financial strength of HomeGoods and the in-real-life (IRL) “treasure hunt” experience is evidence of this, while in beauty, Ulta intends to compete against Sephora by chipping away at brand exclusivity and expanding its door count .

We also see the foot race playing out in the grocery sector. Trader Joe’s, Aldi, and Lidl notched impressive increases in foot traffic in 2025 (Trader Joe’s grew 6.2% by location, against a 1.2% gain for the sector as a whole, per Placer.ai data), likely driven by their approach to private brands and experience . The 2026 AlixPartners Grocery Shopper Perspectives report identified a leap in the share of value-seeking customers who shopped private brands, up to 47% from 32% a year earlier, as big box and traditional grocers lose share (and hi-lo pricing erodes trust) . The relative strength of ethnic and health stores also points toward an interest in the retail setting itself, and in product discovery .

H2: The New Role of Physical Stores

H3: From Anchors to Execution Points

Physical retail does not disappear in the ecommerce era. But it loses its role as the primary place where discovery happens and decisions are made . Stores become execution points: fulfillment centers, pickup locations, and showrooms. Not the anchors of the retail ecosystem.

This transformation is already underway. In 2026, leading retailers view their physical footprints not as standalone profit centers, but as integrated components of a seamless omnichannel operation.

H3: Real-World Example: Spar Slovenia’s 7% Sales Lift Through On-Demand Delivery

Spar Slovenia, a supermarket chain, demonstrated the power of integrating physical stores with digital channels. When the first store added on-demand delivery through Wolt, sales increased so much in the beginning, up to 7% extra revenue for that offline store .

As Miha Deu, Head of Spar Online, explained: “There was no marketing campaign in the history of Spar Slovenia that increased sales so much” .

Much of this lift came from new customers who rarely visited in person, as well as existing customers who appreciated the convenience of same-day delivery for full-basket orders—not just last-minute top-ups .

Key lessons from Spar Slovenia :

Staff training and store “champions”: Designate a point person in each store to manage online orders, track inventory, and handle questions
Build the right assortment: Dig into data to understand what sells online vs. in-store; some SKUs may be hyper-local
Create a picking path: Establish the most logical route through the store so staff fulfill orders quickly without crisscrossing aisles
Integrate loyalty programs: Link online sales data to existing customer bases to personalize offers and understand who your best customers really are

H3: Real-World Example: Vijay Sales’ Digital Transformation

Vijay Sales, a Mumbai-based retail institution with over 150 stores and a legacy spanning more than 50 years, faced the classic challenge of a legacy retailer: its digital infrastructure wasn’t designed for modern commerce .

Fragmented systems across content, inventory, and order management created friction for both customers and staff. Mobile performance was limited, personalization wasn’t possible, and converting traffic into seamless shopping journeys was increasingly difficult .

The brand partnered with DEPT® to reimagine its entire digital commerce experience, powered by Adobe Experience Manager, Adobe Commerce, Adobe Analytics, and Adobe Target .

The results were transformative :

Monthly visits grew by over 35%
Returning visitors more than tripled
Online order volume nearly doubled
Visits from mobile devices more than doubled
Tasks that previously took hours (syncing inventory, updating product info, launching promotions) now happen in real time

H3: Real-World Example: Cisco Store’s Data-Driven Physical Retail

Cisco Store demonstrated that physical locations can harness the same level of analytics that power ecommerce success. By implementing smart building technology, Meraki Smart Cameras, Cisco Spaces, and Splunk analytics, they transformed their physical stores into data-driven operations .

The results :

40% year-over-year revenue increase
66% reduction in energy consumption through automated scheduling
Zero unplanned downtime with full visibility to detect and resolve issues faster
Enhanced security with Meraki Smart Cameras enabling real-time theft detection
Bridged the gap of online-level analytics in physical stores, enabling analysis of in-store customer demographics, behavior patterns, and purchase conversion rates

As the Cisco team noted: “Online stores have volumes of data about customer behavior and demographics, while physical locations have traditionally operated with limited visibility into what actually happens on the store floor. We can now analyze in-store customer demographics, behavior patterns, and purchase conversion rates to drive strategic adjustments to merchandising and product assortments” .

H2: The Rise of Agentic AI and Zero-Click Buying

H3: From Searching to Buying: When AI Takes Over

The second step of the AI revolution affects purchasing itself—the checkout. Agentic AI systems can take over the buying process rather than merely assisting with search . LLM-based shopping agents act as personal shopping assistants and actually complete the transaction—including ordering and payment.

What sounds like a distant future vision is already being tested today. Consumers can already purchase through agents like Amazon’s Rufus, Walmart’s Sparky, and integrations with ChatGPT, Gemini, and Perplexity .

For retailers, this creates a new sales channel that primarily works through machine-readable product data and integration with AI-powered shopping agents via APIs and structured interfaces. Product visibility will no longer depend solely on how well an item is presented in the shop, but also on how well AI agents can understand and recommend it .

Gartner reports that 29% of marketing leaders “already claim to be in production with AI agents,” and 52% are testing them with customers .

H3: Zero-Click Buying

As AI agents start cropping up everywhere, another expression that is becoming routine in retail circles is “zero-click buying” —meaning people can purchase products without ever clicking a “buy” button or leaving their app .

“We anticipate 2026 to be a hockey stick year in terms of adoption of agentic AI,” Kassi Socha, senior director analyst of marketing at Gartner, told Retail Brew. “2026 will be a building year, a building of inputs, a continued strengthening of content and experiences and actual adoption, not just announcements of agentic AI” .

“Consumers will be exposed to agentic at every touchpoint,” she added. “They’ll walk into stores and have the opportunity to interface with an agent through store displays. They’ll land on a website, and they may experience an AI agent before they actually start clicking. So it won’t just be the promise and announcement of agentic, but it’ll be the true experience maturation year” .

For ecommerce, this means: anyone who doesn’t engage today with machine-readable interfaces, clear data structures, and trustworthy transaction processes simply won’t exist in this new purchasing mode.

H2: Experiential Retail and the Capital Challenge

H3: The Rise of Experiential Retail

As ecommerce erodes the economic viability of traditional brick-and-mortar, some retailers are betting on experiential retail—destination formats that offer experiences beyond mere transactions .

Examples include:

Dick’s House of Sport — expansive sports retail with interactive elements
Immersive beauty flagships — brand theaters with testing, treatments, and education
Brand theaters like Netflix Houses — physical extensions of digital entertainment brands

These formats raise the financial bar well above that of conventional stores . They require prominent, high-traffic locations, extensive buildouts, specialized staffing, and frequent refreshes to keep experiences relevant. These stores often take three to five years to reach profitability, if they do at all through in-store sales alone .

Cornell research also suggests that only a narrow segment of customers meaningfully increases spend after engaging with experiential concepts , raising the risk that returns fall short of expectations .

H3: The Capital Challenge

Companies will increasingly struggle to secure or generate the capital required to transform traditional stores into experiential destinations and fulfillment hubs, largely because the investment profile of these formats is significantly more demanding at a time of lingering economic caution .

While retail real estate conditions are stabilizing after the turbulence of 2025, with faster lease-up times and strong absorption of quality space, retailers remain hesitant to commit to long-term, capital-intensive strategies. Traditional 10-year leases and large-scale buildouts require confidence in sustained consumer demand, yet inflationary pressures, uncertain discretionary spending, and shifting shopping behaviors continue to constrain balance sheets and investor appetite .

At the same time, retailers are being forced to allocate capital to other critical priorities, particularly supply chain resilience and omnichannel fulfillment . With 70% of C-levels expecting threats from protectionism and trade policies, many are prioritizing investments in nearshoring, supplier diversification, AI-driven visibility, and last-mile efficiency . Stores doubling as micro-fulfillment centers demand additional technology, space reconfiguration, and operational complexity further stretching capital budgets. While these investments promise faster response times and long-term cost savings, they compete directly with experiential initiatives for funding, making trade-offs unavoidable .

As a result, the transition to experiential and fulfillment-centric stores is likely to be uneven. Well-capitalized retailers, such as luxury brands, leading grocers, and digitally native brands with strong margins, can selectively invest in flagship experiences and hybrid formats. However, mid-tier apparel and footwear players, low-margin department stores, and retailers still recovering from recent disruptions may find it difficult to raise or justify the necessary capital .

H2: Omnichannel Success Stories and Strategies

H3: The Barnes & Noble Resurgence

One of the most surprising retail stories is the resurgence of Barnes & Noble. Before activist hedge fund Elliott Management bought the bookseller in 2019, Barnes & Noble had closed more than 150 stores. In 2025, the company announced plans to open more than 60 new locations, following 57 new stores in 2024 .

This counters the narrative that physical retail is dying. Instead, it suggests that retailers with clear value propositions, curated experiences, and community focus can thrive even as ecommerce grows.

H3: Warby Parker’s Physical Expansion

Pure direct-to-consumer strategies have often struggled to scale profitably, with digital-native brands such as Warby Parker building out physical footprints to complement their ecommerce operations. Warby Parker’s expansion began in 2022, when it opened 40 new stores, and the company has continued to invest in retail locations as critical to its growth .

H3: Amazon’s Mixed Results with Physical Retail

Despite its dominance online, Amazon has struggled with the brick-and-mortar transition. The largest ecommerce retailer in the U.S. shuttered its experimental bookstores and scaled back its ambitious AmazonGo convenience and grocery concepts . In early 2026, the company canceled its bets on purely price-based stores, shutting Amazon Go outlets to focus on Whole Foods stores .

This reinforces a key lesson: the skills required to succeed in ecommerce are different from those required to succeed in physical retail. Even the world’s largest online retailer cannot simply transplant its model into physical locations without adaptation.

H3: The Caspari Dilemma: Boutique Prestige Meets Amazon Reach

The case of Caspari, a global publisher of design-driven paper products, illustrates the tensions inherent in omnichannel strategy. Caspari’s products are mainly sold through wholesale channels to high-end retailers, specialty boutiques, and upscale grocery stores. But like many premium consumer goods companies, Caspari faces a shifting retail landscape .

Raj Venkatesan, professor of business administration at the University of Virginia’s Darden School of Business, explains the tradeoffs: “The allure of platforms like Amazon is the reach, accessibility and logistics they offer. However, brands can sacrifice pricing control, have slimmer margins, build direct comparisons to competition, and hand over their customer data in exchange for convenience and scale” .

Key questions every retailer should ask :

Can your company maintain brand integrity no matter the platform? Online marketplaces can drive growth, but they can also dilute brand identity if not managed carefully.
What is your company/product’s unique differentiator? For premium and heritage brands, in-store experiences can create emotional connections that ecommerce struggles to replicate.
How can your leadership prioritize hybrid strategies? The most resilient brands treat digital and physical as complementary rather than competing.
How is the experience and assortment differentiated across channels? Online channels provide an “endless aisle,” while physical stores offer curated assortment and the ability to experience products directly.

H2: Common Mistakes and How to Avoid Them

H3: Mistake 1 – Treating Online and Physical as Separate Channels

The error: Operating ecommerce and physical stores as independent silos with separate inventory, pricing, and customer data.

The consequence: Inconsistent customer experiences, stockouts in one channel while inventory sits in another, and missed cross-channel opportunities.

Avoidance: Integrate systems so inventory, pricing, and customer data flow seamlessly across channels. Vijay Sales’ transformation unified previously fragmented systems, enabling real-time synchronization .

H3: Mistake 2 – Ignoring the Data Opportunity in Physical Stores

The error: Operating physical stores with limited visibility into customer behavior, demographics, and conversion patterns.

The consequence: You’re flying blind, unable to optimize merchandising, staffing, or layout based on actual performance.

Avoidance: Invest in technology that brings online-level analytics to physical stores. Cisco Store’s implementation of smart cameras, sensors, and analytics enabled a 40% revenue increase .

H3: Mistake 3 – Underestimating the Importance of Employee Buy-In

The error: Adding new channels (like on-demand delivery) without training staff or explaining the benefits.

The consequence: Employees view online orders as extra work rather than opportunity, leading to poor execution.

Avoidance: As Spar Slovenia discovered, designate store “champions” and share early revenue results to encourage team embrace of new channels .

H3: Mistake 4 – Treating Experiential Retail as a Universal Solution

The error: Assuming every store should become a destination experience, regardless of category, location, or customer base.

The consequence: Capital-intensive investments that fail to generate sufficient returns. Cornell research suggests only a narrow segment of customers meaningfully increases spend after experiential concepts .

Avoidance: Match investment to opportunity. Luxury and high-margin categories may justify experiential flagships; others may be better served by efficient fulfillment operations.

H3: Mistake 5 – Neglecting the “Why” of Physical Presence

The error: Maintaining physical stores without a clear understanding of their role in the customer journey.

The consequence: Stores become cost centers rather than strategic assets.

Avoidance: Define the specific function of each location: showroom, fulfillment hub, pickup point, community space, or brand experience. Design operations accordingly.

H3: Mistake 6 – Failing to Integrate Loyalty Across Channels

The error: Loyalty programs that work in-store but don’t connect to online purchases.

The consequence: As Spar Slovenia noted, “We have 800,000 Spar Plus loyalty members… What we are missing is that we don’t know who our Wolt customers are” . You miss opportunities for personalization and retention.

Avoidance: Integrate loyalty systems across all channels. Use purchase history to personalize offers and understand customer preferences.

H2: Expert Tips and Best Practices for 2026

1. Know Your Numbers—But Know the Right Numbers
Headline ecommerce penetration figures can mislead. Look at your specific categories. In discretionary goods, online already accounts for 30–50% of sales . Plan accordingly.

2. Define Each Store’s Role
Not every store needs to be a destination experience. Some should be fulfillment hubs. Some should be showrooms. Some should be community spaces. Define the role, then design operations to match.

3. Invest in Data Infrastructure
Cisco Store’s 40% revenue increase came from bringing online-level analytics to physical locations . Invest in technology that reveals customer behavior, conversion patterns, and operational efficiency.

4. Designate Store Champions
When adding new channels (delivery, pickup, etc.), appoint dedicated team members to own the process. Spar Slovenia’s “Wolt champions” ensured smooth operations and staff buy-in .

5. Build the Right Assortment for Each Channel
What sells online may differ from what sells in-store. Dig into data. One electronics retailer discovered that it wasn’t just small accessories people wanted delivered—sometimes it was a PlayStation game they wanted immediately .

6. Prepare for Agentic Commerce
By 2027, AI-powered shopping assistants and agents will influence 15% of ecommerce sales . Ensure your product data is structured, machine-readable, and complete. If AI can’t find your products, you won’t exist for a growing segment of shoppers.

7. Consider Collaborative Partnerships, Not Ownership Battles
As George Antonakakis from Kotsovolos put it: “I think that no one owns the customer. We own some experience of the customers and we try to focus on providing the best experience to them” . Partner with platforms to create better experiences rather than fighting over who “owns” the customer.

8. Create a Picking Path
For stores handling online orders, establish the most logical route through the store. This prevents staff from wandering aisle to aisle and speeds fulfillment .

9. Review Stock Levels Daily
Spot which items ran out the day before and address it as soon as possible. Small oversights become ongoing problems if not caught quickly .

10. Stay Connected
IDC predicts that 70% of large retailers will invest in data modernization by 2027 . Connected systems across partners, channels, and functions enable faster response, better decisions, and sustainable growth.

H2: Frequently Asked Questions (FAQ)

1. Is ecommerce killing physical retail stores?

No, but it is transforming them. In discretionary categories like apparel, electronics, and home goods, online already accounts for 30–50% of sales . Physical stores are evolving from primary shopping destinations into fulfillment centers, showrooms, and experiential touchpoints. The total number of stores may decline, but successful retailers are finding new roles for physical presence.

2. What percentage of retail sales are online in 2026?

Headline Census data places ecommerce at about 16–17% of total retail sales . However, in discretionary, higher-margin categories that once sustained malls, online already accounts for 30–50% of sales . The real story is category-specific, not captured in broad averages.

3. Why are department stores disappearing?

Department stores’ share of U.S. retail sales fell from 14.5% in 1990 to 0.5% in 2024 . They failed because their core function—physical aggregation and curation of products—became obsolete when digital platforms made search cheap and selection infinite. What department stores provided didn’t disappear; it moved online .

4. What is the new role of physical stores?

Physical stores are becoming execution points: fulfillment centers for online orders, pickup locations, showrooms for product discovery, and experiential destinations. They are no longer the primary place where discovery happens and decisions are made .

5. Can physical stores compete with ecommerce?

Yes, but not by trying to be the same. Successful physical retailers offer what ecommerce cannot: immediate gratification (instant pickup), sensory experience (touch, try, feel), human interaction, and curated discovery. Spar Slovenia grew store sales 7% by adding on-demand delivery . Cisco Store increased revenue 40% by bringing online-level analytics to physical locations .

6. What is agentic AI and how will it affect retail?

Agentic AI refers to AI systems that act on the consumer’s behalf—finding, comparing, and purchasing products without requiring the consumer to browse. Consumers can already purchase through agents like Amazon’s Rufus and Walmart’s Sparky . Gartner predicts 2026 will be a “hockey stick year” for adoption . Retailers must structure product data for machine readability or risk being invisible to AI shoppers.

7. What is zero-click buying?

Zero-click buying means customers can purchase products without ever clicking a “buy” button or leaving their app . As AI agents handle more of the shopping journey, transactions become ambient and automatic. The checkout process, once a critical conversion point, increasingly disappears into the background.

8. Are malls dying?

Roughly 1,100 U.S. malls remain, with vacancy rates nearing 9%—more than double the broader retail average. Class C malls exceed 13% vacancy . However, successful malls are reinventing themselves with experiential offerings, dining, entertainment, and unique retail concepts. The mall of the future looks less like a collection of stores and more like a community destination.

9. How are successful retailers integrating online and offline?

Successful omnichannel retailers:

Unify inventory across channels (Vijay Sales)
Bring online-level analytics to physical stores (Cisco Store)
Use physical stores as fulfillment hubs for online orders (Spar Slovenia)
Integrate loyalty programs across channels to understand customer behavior
Create seamless experiences where customers can research online and pick up in-store

10. What is the biggest challenge facing physical retail in 2026?

The capital challenge. Transforming traditional stores into experiential destinations and fulfillment hubs requires significant investment—often taking three to five years to reach profitability . At the same time, retailers must invest in supply chain resilience, technology, and omnichannel capabilities. Well-capitalized retailers can make these investments; mid-tier players may struggle .

11. How is AI being used in physical stores today?

Retailers are using AI for:

Customer analytics: Cisco Store analyzes demographics and behavior in real-time
Inventory management: Real-time tracking and automated replenishment
Personalized offers: Using purchase history to tailor promotions
Security: Smart cameras detecting theft in real-time
Energy management: Automated scheduling reducing consumption 66%
Staff assistance: AI agents helping customers via mobile devices

12. What is the “Amazon effect” on retail?

The “Amazon effect” refers to the pressure ecommerce places on traditional retailers to offer lower prices, faster shipping, and broader selection. However, in early 2026, Amazon canceled its bets on purely price-based stores, shutting Amazon Go outlets to focus on Whole Foods . Today, it’s a mistake to view the landscape as purely a race between the cheapest and fastest .

13. Can boutique retailers survive against ecommerce giants?

Yes, by focusing on what makes them unique. Boutique retailers offer curation, expertise, and personal relationships that algorithms cannot replicate. The Caspari case illustrates the tradeoffs: platforms like Amazon offer reach but can dilute brand identity. Successful boutiques know when to say no and analyze the tradeoffs—whether margin, cannibalization, or scale .

14. How important is data for physical retailers?

Critical. Physical stores have traditionally operated with limited visibility into customer behavior. Cisco Store’s investment in data infrastructure enabled a 40% revenue increase . Without data, retailers cannot optimize merchandising, staffing, or layout. Without connected data across systems, even advanced tools fall short .

15. What is the future of retail in 2026 and beyond?

The future includes:

Agentic commerce: AI agents shopping on behalf of consumers
Zero-click buying: Transactions happening automatically
Stores as fulfillment hubs: Physical locations serving online orders
Experiential retail: Destination formats for engagement
Connected data: Seamless information flow across channels
Resilient supply chains: Investment in flexibility and visibility

H2: Conclusion – The New Retail Reality

So, how is ecommerce affecting retail stores?

The answer is not “ecommerce is killing retail.” That narrative is too simple and fundamentally wrong. The answer is that ecommerce is transforming retail—forcing physical stores to evolve from anchors of the shopping ecosystem to integrated components of a seamless omnichannel experience.

The department store did not fail because consumers stopped shopping. It failed because the function it performed moved elsewhere . Aggregation, curation, and discovery now happen digitally—through search engines, marketplaces, social feeds, and AI agents.

But physical retail does not disappear. It evolves.

Spar Slovenia grew store sales 7% by embracing on-demand delivery
Vijay Sales nearly doubled online orders through digital transformation
Cisco Store increased revenue 40% by bringing online-level analytics to physical locations
Barnes & Noble is opening new stores while ecommerce grows
Trader Joe’s, Aldi, and Lidl are growing foot traffic through value and experience

The retailers that succeed share common characteristics:

They integrate channels rather than operating silos
They leverage data to understand customer behavior across touchpoints
They define clear roles for physical locations: fulfillment, showroom, experience
They invest in technology while being realistic about capital constraints
They prepare for agentic commerce by structuring data for machine readability
They treat digital and physical as complementary, not competing

The path forward:

Know your category-specific numbers. Headline ecommerce penetration figures mislead. In discretionary goods, online already accounts for 30–50% of sales .
Define each store’s role. Is it a fulfillment hub? A showroom? An experiential destination? Design operations accordingly.
Invest in data infrastructure. Physical stores need the same level of analytics as ecommerce sites. Cisco Store’s 40% revenue increase proves the value .
Integrate, integrate, integrate. Inventory, customer data, and operations must flow seamlessly across channels.
Prepare for AI. By 2027, AI agents will influence 15% of ecommerce sales . If your products aren’t easy for AI to find and buy, you’ll lose share to competitors.
Be realistic about capital. Experiential retail requires significant investment with long payback periods. Match ambition to resources .

The retail landscape has been permanently transformed. The question is no longer whether ecommerce will affect retail stores—it already has, profoundly. The question is whether you will adapt to the new reality or be left behind.

The data, the case studies, and the expert insights all point in the same direction: retail’s future belongs to those who embrace integration, leverage data, and create seamless experiences across every channel their customers choose.