In a world increasingly dominated by e-commerce giants like Amazon, many are left pondering whether brick-and-mortar retail is a relic of the past. Product startups, in particular, are questioning the viability of physical stores as they strategize their market entry. This blog post explores whether traditional retail is truly dead or if there’s still room for brick-and-mortar to thrive in a digital-first world. We’ll discuss challenges, survival strategies, and success stories of startups that have managed to adapt and flourish. Or, listen to our latest podcast on this very subject.
Key Takeways
- Brick-and-mortar retail did not disappear. It narrowed, and the stores that remain are being rebuilt around experience rather than inventory alone.
- Most US retail sales still happen in physical stores, which is why brands that treat retail as optional are opting out of most of the market.
- Shoppers still prefer buying some categories in person, clothing among them, because the tactile experience cannot be replicated online.
- The rivalry framing is out of date. Discovery and purchase now move in both directions between store and screen.
- Fewer, better stores means a more selective buyer per slot, so the evidence a new brand needs to bring has gone up, not down.
- For a product brand, the question is not whether physical retail is alive but whether it is alive in your category.
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Defining Brick-and-Mortar Retail’s Current State
Brick-and-mortar retail refers to businesses with physical storefronts where customers can engage with products and make purchases in person. Despite the rise of digital shopping, physical stores remain a significant part of the retail landscape. According to the National Retail Federation, over 70% of retail sales in the U.S. still occur in physical stores. However, this figure doesn’t capture the full picture, as many consumers now blend online and offline shopping experiences. With the convenience of online shopping, physical stores face pressure to reinvent themselves to stay relevant.
Where the Numbers Actually Come From
It is worth being precise about the evidence, because the numbers most often quoted in this debate come from a particular moment and are frequently repeated without their date attached.
The National Retail Federation figure that is quoted for the share of US retail sales still occurring in physical stores is widely cited and widely stripped of its year. Whatever the current number is, the argument it is used to support is weaker than it looks, because the split between online and physical no longer describes how anyone shops. A purchase made on a phone and collected in a store, or researched in a store and ordered at home, lands on one side of that line for accounting reasons and belongs to both in reality. Treat any single share-of-sales figure as a description of how transactions are recorded rather than of where shopping happens.
Forbes put global e-commerce sales at $8.07 trillion in 2027.
The same applies to the explanation. For several years the standard account of every change in retail was that the pandemic accelerated the shift to e-commerce. That was true, it is now several years settled, and continuing to lead with it frames a permanent change as a recent shock. The interesting questions have moved on: which categories people want to buy in person, what a store is for when the transaction can happen anywhere, and how retailers are choosing to use the space they have.
The honest position for a brand is this. The cost pressures on physical stores are genuine: rent, staffing, utilities and the expectation of a service level that is expensive to deliver consistently. The advantages are equally genuine: people can see and handle the product, the retailer’s own traffic does discovery work that a brand would otherwise pay for, and a physical shelf reaches shoppers who will never encounter you online. Neither of those requires a statistic to be true, and both have been true throughout the period the decline narrative covered.
The Argument for the Survival of Brick-and-Mortar
Despite these challenges, there’s a compelling argument for the continued relevance of physical retail. For one, human interaction remains an essential aspect of the shopping experience. Many consumers still value the opportunity to see, touch, and try products before purchasing. A survey by RetailDive found that 62% of shoppers prefer buying clothing in-store due to the tactile experience it provides.
Furthermore, physical stores can serve as brand ambassadors, offering immersive experiences that reinforce brand identity. Apple’s iconic retail outlets, for example, are designed to be more than just sales points—they’re hubs for creativity and innovation. Such experiences can build brand loyalty and create lasting connections with customers.
Additionally, brick-and-mortar locations can drive online sales by serving as showrooms. Customers may visit a physical store to explore products and then make purchases online at their convenience. This trend, known as “showrooming,” highlights the potential for harmonious integration between online and offline retail channels.
Pro Tip: Before deciding physical retail is worth pursuing, walk the aisle you would be in at three different retailers in your region and count how many brands on that shelf did not exist five years ago. A category admitting new entrants looks completely different from one where the same legacy names hold every facing, and ten minutes in a store tells you more about your odds than any sector forecast.
What the Store Revival Means for Product Brands
The sector commentary answers a question brands do not have. Stores are recovering, or reinventing, or consolidating, depending on whose analysis you read. What a product brand needs to know is what any of that changes about where to sell and how to sell it. Here is the translation.
The answer is category-specific, not general.
Physical shelf space is expanding in some categories and contracting in others, and a national trend line tells you nothing about the aisle you would occupy. Walk the stores that would carry you. Count the facings, look at how much space the category holds now against what you remember, and see whether new brands have appeared in it. That is your data, and it is better than any forecast.
A store built as an experience judges your product in person.
Retailers investing in the in-store experience are choosing products that demonstrate, that look good in hand, that invite someone to pick them up. That is a different selection than a feed optimizes for. If your product is compelling to hold and dull in a thumbnail, physical retail is where you should be, and you should say so in the pitch.
Fewer, better stores means more selective buying.
When a retailer operates a smaller estate and invests more per location, each shelf slot carries more weight and the evidence bar for a new vendor rises. Expect to be asked for proof rather than a story. Sell-through from anywhere, review data, performance in another channel. Arrive with it unprompted.
Omnichannel means you are expected to bring demand, not just absorb it.
A retailer running one integrated operation does not see itself as a source of free foot traffic for your brand. Increasingly the question in the meeting is what you will do to send shoppers into the store. Have an answer: geo-targeted advertising to the store catchment, a where-to-buy page naming their locations, a launch campaign built around the account.
Physical placement is evidence that travels.
A product that sells on a shelf, in front of shoppers who had never heard of it, is the most persuasive proof of demand there is, and it carries into every other conversation you will have. That makes even a small regional placement worth more than its revenue, and it is a reason to take a limited test seriously rather than holding out for a national order.
The requirements are real and they are fixed.
Packaging that works at shelf distance, case packs, barcodes, compliance documentation, insurance, the ability to ship to a distribution center on somebody else’s terms. None of that is optional and none of it can be arranged in the week after a retail buyer says yes. If physical retail is where you are heading, the readiness work starts now, not when the order arrives.
Strategies for Modernizing the Brick-and-Mortar Experience
To thrive in today’s retail environment, brick-and-mortar stores must evolve and adapt. One strategy is to leverage technology to enhance the in-store experience. Digital tools like augmented reality (AR) and virtual reality (VR) can create engaging, interactive experiences that captivate customers. For example, furniture retailers can use AR to allow customers to visualize how a piece would look in their home.
Another approach is to focus on creating community-centric spaces. By hosting events, workshops, or pop-up shops, retailers can foster a sense of belonging and encourage repeat visits. These activities also provide opportunities to showcase new products and gather valuable customer feedback.
Finally, adopting an omnichannel strategy is crucial. Integrating online and offline channels ensures a seamless customer experience across all touchpoints. This can include offering in-store pickup for online orders, enabling easy returns, and using data analytics to personalize marketing efforts. By breaking down silos between digital and physical operations, retailers can meet consumer expectations more effectively and capitalize on cross-channel synergies.
Pro Tip: If you sell online and want to know whether your category still moves in stores, look at where your own returns come from. Categories with high online return rates, anything judged on fit, feel, scale or finish, are the categories where physical retail holds its ground, and they are the easiest ones to argue into a buyer meeting. Your return data is a category signal about shoppers, not just a cost line.
How Physical and Online Channels now Feed Each Other
The framing of online against physical belongs to an argument that is over. Retailers who are investing in stores are not defending them against e-commerce, they are running one business with two front doors. For a brand, the practical consequence is that you cannot judge the two channels separately, because each one is generating demand that the other converts.
| Physical store | Online | |
| Discovery | Unplanned, driven by shelf position and packaging | Intent-led, driven by search and social |
| What convinces a shopper | Handling the product, seeing scale and finish | Reviews, comparison, price |
| Who controls the experience | The retailer | The brand |
| Margin | Lower, shared with the retailer | Higher, but you carry acquisition cost |
| Payment | On the retailer’s terms, after delivery | At the point of sale |
| What it proves to a buyer | Sell-through, the number buyers trust most | Demand exists, which is where the conversation starts |
Read down the two columns and the loop is obvious. A shopper sees a product in a store, reads reviews on their phone, and buys either there or later at home. Another sees it online, wants to know how big it actually is, and goes to look at it in a store. Both directions happen constantly and neither shows up cleanly in either channel’s numbers.
Which leads to the point that matters in a buyer meeting. Your store performance and your online performance cannot be assessed as separate businesses, and a retailer increasingly will not assess them that way either. Expect to be asked what you will do to bring shoppers into their stores rather than divert them to your own site. A brand whose answer is a national advertising campaign aimed at its own checkout is answering the wrong question.
Choosing a Regional Chain over a National Account
A hardlines brand with a good product and limited production capacity gets an opening with a national retailer and a smaller regional chain at roughly the same time. The national order is larger, more prestigious and, in this case, beyond what the brand could fund and supply reliably. Choosing the regional chain meant a smaller first order, a manageable number of stores to support, and a sell-through record that could be built properly and taken to the national buyer later. The cost was a year of slower growth and the discomfort of telling a national buyer not yet. What it avoided was the far more common outcome: an opening order that cannot be restocked, an out-of-stock shelf within weeks, and a delisting that follows you into every subsequent conversation.
Moving from Online-Only into a Specialty Retailer
A brand selling well through its own site assumes retail is the same product with a barcode added. It is not. The pack that worked as a shipping carton does not work as a shelf pack, the pricing built for direct sale does not survive wholesale margin, and the case pack and labeling requirements arrive as a surprise. The brands that make this transition successfully do the readiness work before the first meeting rather than after the first yes, and they price backward from the shelf rather than forward from their own cost.
Discovering What the Physical Channel Demands that was Never Planned For
The recurring items are the same across categories: product liability insurance with the retailer named correctly, compliance and testing documentation the online channel never asked for, the working capital to fund a production run that gets paid for months later, and the operational capability to ship to a distribution center on the retailer’s terms rather than your own. None of these is difficult on its own. All of them take time, and all of them are discovered at the worst possible moment by brands that treated the purchase order as the start of the preparation rather than the end of it.
Conclusion: The Future of Retail and the Role of Brick-and-Mortar
While the digital age presents significant challenges for brick-and-mortar retail, it also offers opportunities for growth and innovation. By adopting modern strategies and technologies, physical stores can complement online channels and provide unique value to customers. For product startups, blending the strengths of both worlds can create a powerful formula for success.
In conclusion, brick-and-mortar is far from obsolete. Instead, it holds the potential to be a vibrant and integral part of the retail landscape. By embracing change and adapting to evolving consumer expectations, product startups can ensure their physical presence remains a key driver of growth and an essential component of their overall strategy. By reimagining the role of physical stores, we can look forward to a future where brick-and-mortar and e-commerce coexist in harmony, each amplifying the other’s strengths.
If you’re ready to bring your product into major retailers but need help navigating the process, Retailbound can guide you every step of the way. Schedule a free consultation with one of our retail experts and discover how to get your product retail-ready, connect with the right buyers, and drive long-term retail growth.
Frequently Asked Questions
What is the future of brick-and-mortar retail?
Reinvention rather than decline. Physical stores are being rebuilt around experience, service and fulfillment rather than inventory alone, and the category mix is shifting. For a product brand the practical consequence is that shelf space is still available but the evidence required to earn it has gone up.
Are brick-and-mortar stores doing well?
It depends entirely on category and format. The sector-level headline hides wide variation, so the answer that matters to a brand is whether stores are doing well in your category, at the retailers you would sell through, which you can check by walking the aisle.
Will brick-and-mortar stores make a comeback?
The comeback framing assumes they left. Most retail sales in the United States have continued to happen in physical stores throughout the period people described as a retail apocalypse. What changed is which stores, in which formats, and what a store is for.
Will brick-and-mortar stores become obsolete?
Not in categories where shoppers want to handle a product before buying it. Anything judged on fit, feel, scale or finish keeps a strong physical channel, which is why in-store preference stays high for categories like clothing.
Should my brand sell in stores or stay online?
Both channels answer different questions. Online proves demand exists and gives you margin and control. Physical retail gives you reach and the sell-through data buyers trust. Most brands do not choose, they sequence, and the sequencing depends on whether your operations can carry retail payment terms and order sizes yet.
About the Author
Yohan Jacob is the President and Founder of Retailbound. Retailbound is a comprehensive retail channel management consultancy that helps brands launch and scale their products in over 150+ retailers in both the US and Canada. Specializing in bridging the gap between product creators and retailers, Retailbound offers a range of services from retail strategy development, buyer engagement, sales management and channel marketing support. Whether the client is a startup or an established brand, Retailbound provides expert guidance to increase their retail presence, navigate buyer relationships, and drive sales growth both in-store and online.
