There is a story that has been told for about a decade now, and it goes like this. Online retail is winning. Physical stores are losing. The future is screens and warehouses and delivery vans, and the only people who shop in person are the ones who have not figured out how to do it any other way.
That story is not really true anymore.
It was true for a while. There was a real moment, maybe from 2015 to about 2022, when the convenience of online was eating physical retail at a pace that made every brick-and-mortar owner worry. The categories that had survived the first wave of e-commerce, books and music and electronics, were finally falling. Anything that could be reduced to a SKU and shipped in a box was going to a screen.
But somewhere in the last few years, a counter-trend started showing up. Quiet at first. Then less quiet.
People started walking into stores again. And not because they had to. Because they wanted to.
What Online Was Missing
For years, the assumption was that the in-store experience was a luxury. A nostalgia indulgence. The functional version of shopping was online, and the in-person version was for people who had time to kill.
That framing turned out to have it backward.
The in-store experience is not a luxury. It is a tool for getting things you cannot get any other way. You cannot smell a coffee bean through a screen. You cannot feel the weight of a knife. You cannot see the actual color of a paint sample under the actual light in your house. You cannot ask a person who has used the product whether the new version is better than the old version.
These are not small things. They are the things that determine whether you end up with what you actually wanted or with a return label on your kitchen counter.
The dirty secret of online retail is the return rate. For a lot of categories, the percentage of items that get sent back is staggering. Clothing returns run high. Furniture returns are a logistical nightmare. Even electronics, which seem like they should be easy to buy sight unseen, have higher return rates than the industry wants to talk about.
Every one of those returns is a person who bought the wrong thing because they could not see it before they bought it.
The Categories That Stayed Physical
Some categories never really left the physical store, and the reasons why are instructive.
Cars are still bought in person, mostly. So is most furniture, even after a decade of online furniture startups trying to change that. So are eyeglasses, despite a handful of online players. So are wedding dresses, suits, and anything that requires fit. So are most musical instruments, because feel matters and no two are identical. So is most fresh food, because you need to see it before you decide if it is the version you want today.
What these categories have in common is that the product is not really a SKU. It is a specific physical thing that varies in ways that cannot be captured in a photo and three bullet points.
The first wave of e-commerce won by digitizing the categories where the product really was just a SKU. A specific book is a specific book. A specific DVD is a specific DVD. Online retail handled those categories beautifully because there was nothing being lost in the digitization.
The categories that resisted were the ones where digitization actually destroyed information. The categories where the difference between two seemingly identical items mattered, and you could only tell by being there.
The New Categories
What is interesting now is that this resistance is showing up in categories that were not on the original list.
Boutique hemp products are one example. For a few years, the assumption was that this category would go entirely online, because the items are shippable and the audience is comfortable with e-commerce. That has not really happened. The category is still mostly bought in person, and the in-person retailers are growing faster than the online ones in a lot of markets.
The reason is the same as with coffee or olive oil or fresh produce. Inventory varies. The category is not a single SKU. What you are buying on Tuesday is not the same thing you would have bought a month ago, even if it has the same name. Quality, smell, freshness, presentation. These things matter, and they cannot be captured in a product listing.
In Kansas City, the Crossroads Arts District has a small shop on Southwest Boulevard that has built its entire model around this. Customers walk in, look at the actual items, talk to the actual person at the counter, and choose based on what is in front of them. The whole thing is organized around the idea that for this category, the physical experience is not optional. The shop is 21-and-over only; you can read more here for a sense of how that plays out in practice.
It is one example of a broader pattern. The categories that physical retail abandoned in the 2010s, it is now starting to take back.
What People Actually Want
If you talk to people about why they are walking into stores again, the answers are not what you might expect.
It is not nostalgia. It is not a rejection of technology. People still buy plenty of things online. They just want to be selective about which things.
What they want, mostly, is to not be wrong.
Buying something online and having it arrive wrong is a particular kind of small misery. The package shows up, you open it, the thing is not what you thought, and now you have a choice between living with the disappointment or going through the return process. Both of those options are worse than just having gotten the right thing in the first place.
The in-store experience eliminates that risk. You see the thing. You touch the thing. You ask questions about the thing. You walk out with the thing, or you do not, and either way you know what you are getting.
For categories where the cost of being wrong is high, either in money or in the actual experience of using the wrong product, the in-store option is starting to look like the smart move again.
What The Retail Data Shows
You can actually look at this if you want.
The Census Bureau’s Monthly State Retail Sales data publishes year-over-year percent changes in retail sales, broken out by state and by NAICS retail subsector. The data product is a blend of the Monthly Retail Trade Survey, administrative records, and third-party data, and it lets anyone see how retail spending in particular categories is moving in particular states from one year to the next.
What it does not do is tell you a story. It is a table. Whatever narrative you want about online versus in-person retail, you can build out of those numbers, but the numbers themselves are just numbers.
What is worth noting is that the data exists at all. Until a few years ago, state-level retail sales information was only published every five years as part of the Economic Census. The shift to monthly granularity reflects how much more carefully retailers, analysts, and local governments now want to track which categories are moving and where. The fact that the demand for that granularity is so much higher than it used to be is its own answer to the question of whether physical retail still matters.
Where This Is Going
The next ten years of retail are not going to look like the last ten. The all-online prediction did not pan out. Neither did the all-in-store reaction.
What is showing up is a more sensible split. Some things you buy online because they are SKUs and the speed and selection win. Some things you buy in person because the product varies and the experience matters and you cannot afford to be wrong.
Smart retailers are figuring out which side of that split they are on. The ones who pick correctly are doing fine. The ones who try to be on both sides usually end up on neither.
If you have a category in your life where you have been buying online out of habit, and you have been a little unhappy with what shows up, this is your sign. Find the physical store. Walk in. Talk to the person at the counter. You might be surprised how much of your dissatisfaction was actually just a missing pair of eyes and hands and a real conversation.
Physical retail is not dead. It is selective now, in a way it was not before. And the people who run it well are doing better than they have in a long time.