With skyrocketing rates of digital adoption and collapsing traffic in physical stores, retailers face an existential question: Are their in-person locations relevant anymore? Over the past ten years, e-commerce has built overwhelming advantage. But there are four retail functions where physical stores still have a chance at shaping superior experiences: ultraconvenience, product touch and feel, immersive exploration, and personal, trusted advice.

Deployed effectively across these four functions, emerging technologies such as augmented and virtual reality could allow physical commerce to flourish. But stores must employ these tools within a specific strategic context—or the advantages will be short-lived.

To determine whether maintaining a physical presence still makes sense, retailers must go back to first principles. If it does, they must prioritize one or two of the four functions that can allow their stores to create unique and defensible value.