A Cornerstone of Retail Lives On. Why?

By Arianne Cohen

July 31, 2025

In nearly every town and city, they are still there: retail stores. And in nearly every case, the question is there too: Why?

Not too long ago, it looked like e-commerce was unstoppable. Growing at a double-digit pace every year, it had everything going for it: convenience, wider selection, and a customer base of 5 billion potential shoppers—many of whom are prone to late-night click-and-splurges. What could possibly slow down this giant?

Turns out, plenty. Although e-commerce, to many, may seem dominant, in terms of retail it’s actually not, with digital sales accounting for only 22 percent of all retail sales. Every single week, remarkably, nearly three-quarters of shoppers still set foot in a store and enact a choose-and-buy process that hasn’t changed in over a century. “There’s no question that brick-and-mortar is here to stay,” says Jessica Grisolia, director of retail industry solutions for Swiss data firm Scandit. “Online sales are growing very modestly.”

To be sure, e-commerce is still promising, with people buying certain goods, like electronics, online much more often than in person. But the stubborn resiliency of brick-and-mortar is a glaring reminder of how hard some human habits are to change, and of the limits of digital transformation—both of which may impact AI’s growth someday. For example, since the pandemic, young shoppers in particular have shown a curious penchant for pushing their own carts around real-life stores, no doubt pausing to touch the fashion and cosmetics offerings, on trips that take quadruple the time of digital shopping. “Turns out Gen Z likes to shop in-store much more than older generations,” says Craig Rowley, a senior client partner and retail expert at Korn Ferry. 

Retailers increasingly like it that way too, after realizing that e-commerce stuck them with doing much of the work that customers used to do, such as pushing carts, checking out items, and transporting items to their homes. “That’s additional workload on top of already razor-thin margins,” says Joel Brock, partner at digital-services consulting firm West Monroe. 

Then there’s the debacle of returns, which have proven to be a circus for retailers and customers alike. (Who among us doesn’t have a home littered with “I meant to return that” items?) “The most important issue for retailers is that reselling that item is extremely difficult,” says Grisolia. Many returns come from season-specific, online-exclusive promotions, which have often ended by the time a return commences. To sell the item, the retailer must discount it. “Now the customer is buying that discounted item instead of buying something else,” she says. And if the return is an exchange, the retailer has already provided two to three items, and the customer has only paid once. We won’t even broach the return-fraud problem, which has been especially pervasive in Europe.

E-commerce’s failure to dominate offers a fundamental lesson: Some in-person experiences cannot be replicated online. Trying on pants, or holding up two items of apparel to make an outfit, simply cannot be done from home. Surprisingly, grocery delivery has been ground zero of this realization. “You just never get the same bananas that you’d pick out yourself,” says Brock.

Photo credits: Kilito Chan/Getty Images