When Amazon opens fulfilment centres in a new country, many commenters predict an apocalypse for all physical retailers and envision a future where all commerce shifts online. We think the picture is more nuanced.

I recently visited the United States to attend RetailX, one of the largest retail conferences in the world. While there, I witnessed numerous examples of the retail bifurcation with low-end and high-end retailers performing well, while those retailers in the middle are struggling, facing apocalypse.

The structural shift to online shopping is a major headwind to retailers occupying the middle. We have all been in these retailers; they typically offer widely available products and use promotions to drive foot traffic, which is no longer effective with price transparency online shopping delivers. They might be in a mall, on a high street or a department store. Typically, these retailers are overpriced, indifferent and uninspiring. An example in the US is bankrupt department store Sears, which was once the largest retailer in the US.