Source: Retail Dive
Date: 20th May 2025

Physical stores remain dominant in retail sales despite the growing role of e-commerce.

According to recent insights from a commercial real estate firm, retail’s era of e-commerce disruption has largely passed, with brick-and-mortar stores continuing to account for the majority of core retail sales.

While e-commerce’s share is still growing, the pace of that growth has slowed significantly in recent years.

The shift is largely due to a realization by direct-to-consumer brands that physical stores remain a crucial channel, and many traditional retailers, once caught off guard by the rise of online shopping, have since adapted by incorporating e-commerce into their strategies.

In addition to serving as a point of sale, stores are increasingly important for handling returns, which have surged due to e-commerce growth. Physical locations are integral in managing the omnichannel experience, with stores fulfilling a significant portion of online orders through in-store pickup or ship-from-store services.

While many retailers have reduced their store footprints, closures are mainly attributed to operational challenges or oversaturation, not the rise of e-commerce. Conversely, some international brands are expanding into the U.S., contributing to low national vacancy rates.

The evolving role of brick-and-mortar stores goes beyond mere transactions; experiential elements and personalized customer experiences are becoming key to driving loyalty and conversions.

Retailers are investing in store design and digital tools to meet rising consumer expectations, ensuring that in-store experiences complement their online offerings.

As costs rise and tariffs continue to affect the industry, retailers are looking for ways to diversify their revenue streams, reinforcing the need for a robust omnichannel strategy.