To combat returns, Zalando's AI analyzes a user's photos, purchase history, and data from similar customers to predict the correct size for a new item. The ultimate goal is to become so confident in its predictions that for some products, the user won't even need to select a size at all.

Best Buy is leveraging its massive physical retail footprint as a unique advertising channel. This "in-store takeover" capability allows brands to create immersive experiences using window displays, digital walls, and interactive screens, reaching customers at the crucial point of purchase.

Sephora combats intense competition by applying a "game of inches" philosophy to its physical retail space. Every section, from teen-focused fragrance displays to strategically placed checkout-line minis, is optimized to sell. This meticulous space utilization creates a highly profitable, frictionless customer experience without any "wasted" space.

Best Buy Ads offers "in-store takeovers," allowing brands to use its physical stores for immersive, measurable campaigns. This transforms window displays, digital walls, and checkout counters into a powerful advertising medium that engages customers at the point of purchase.

In a future where AI agents conduct e-commerce, fraud is the biggest hurdle for used and collectible goods. GameStop's 1,600 physical stores could become verification centers, providing a 'physically verified' stamp of authenticity. This creates a defensible moat against purely online marketplaces for high-value, fraud-prone categories.

Fashion retailer Aritzia removes mirrors from dressing rooms to encourage shoppers to interact with stylists and other customers in communal areas. This creates a memorable, consultative experience that, despite some complaints, contributes to significant sales growth by making trying on clothes a social event.

Large retailers are moving toward having effectively the same massive product catalogs via marketplaces. As selection becomes commoditized and ceases to be a differentiator, retailers will be forced to compete on the next level: deeply personalized service and unique customer experiences.

To avoid being disintermediated by AI agents that could direct consumers elsewhere, retailers can leverage their physical assets. An AI agent will still prioritize retailers with extensive infrastructure and forward-positioned inventory to ensure fast and efficient delivery, creating a competitive moat against pure-play e-commerce.

For brands with both physical and wholesale channels, physical stores should serve as marketing assets. Instead of scaling the number of locations, invest heavily in making a few stores so visually appealing and experience-driven that customers are compelled to share on social media, generating free buzz.