One of the biggest challenges for brick-and-mortar retailers is finding a strategy to compete with online-only sellers such as Amazon. Although Walmart and JCPenney, for example, have invested substantially in e-commerce operations to complement their physical stores, the economics facing these hybrid retailers remain daunting. Both chains announced store closings in 2016.

A version of this article appeared in the July–August 2016 issue (pp.22–23) of Harvard Business Review.