The scenario outlined is UBS’s baseline. If e-commerce penetration grows faster than expected, more stores might need to close. If it moves slowly and retailers quickly pivot stores to filling online orders, UBS believes store counts might even grow.

Either way, stores are under more pressure than before to justify their existence. There are those that will continue to be vital because they provide necessary services to a local community, as many grocery stores do. But numerous others need to do more than that, like acting as showrooms for customers to see and test products, or providing immersive branded experiences. And many will need to find ways to work with e-commerce, not despite it.

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