Given Amazon's success in online retail, and the decline in physical store performance, how will retailers adjust their strategy to compete in the next 5-10 years?
Your question is too broad and non-specific. It's like asking how can I beat richest man in the world in accumulating wealth if I don't have anywhere nearly as much as he does. Basic book answer is win in niche markets and then expand. or. Do opposite than what he does. Please make your question more specific if you want a good answers.
Offer something that Amazon doesn't have. Think about what would make a retail buyer's experience better.
At this point, there are two main differentiators that come to mind for physical stores: 1) The ability to browse and physically see, touch, and try on items before you buy 2) Instant gratification: you go to the store, buy something and have it right away (although amazon is working on rolling out same day deliveries)
Market is irreversibly changing, why resist the tsunami when you can swim with it. Do what your winning competitors proved that works.
Competing with Amazon is anything but easy.
Admitting your shortcomings is certainly the first step to maximize your strengths.
That’s what you can’t do however there are a whole lot options for what you can do
Narrow down your niche: Amazon’s weakness lies in its vastness. Amazon has everything on sale and it can’t be good at everything. But what about you? You don’t sell everything as you just sell a few things
Create a subscription service: In fact; this is the smartest ways to sell a product. Build a screaming fan base: Trust me on this; building a fanatical fan base is not easy. The strategy is to stay small and stay connected.
Remember; whatever you do as a brand ranging from social media outreach to content marketing all must have a close-connected feel to it. It’s all about connection, cohesion & knock-out service if you are serious about competing with Amazon.
Maybe you should also consider how to utilize Amazon's massive reach and architecture to hop on the train and expand your business, instead of going directly against a giant. Without know much more than you wrote, there are really no other suggestions I can make.
Retailers will need to get more revenue per square foot from brick and mortar stores. I expect the "showroom" model (already in use by Apple, Microsoft, etc.) becoming more common. It allows people to interact with products without the square footage necessary for aisles of inventory.
They should think of themselves as a media company first. Create engaging content tailored to their niche. Develop trust, rapport, and reciprocity so their audience wants to buy from them vs Amazon.