Looking at the interchange of online and brick and mortar businesses as an evolution or a devolution of the market as a whole is a vast oversimplification.
I think the first error is assuming the Amazon is the appropriate trendsetter for small businesses to be watching. The amount of power Amazon has over consumer behavior alone sets them outside the normal realm of expectations for business operations. They’re an outlier. This Guardian article does outline some other businesses that are migrating to brick and mortar successfully, but the author based much of the ethos of his article on the notoriety of Amazon. Also of note: the article is two years old (that’s, like, eight years in business cycles).
I’m not saying there isn’t a general trend, because of course there is. People rushed to the dot com and then the dot com busted. But the bubble burst back in 2001 — this isn’t a new phenomenon. Since then, the market has restabilized itself and allowed for re-entry to the online market. But no one is going to thrive well in the online market unless the online market is right for their business.
It all comes down to the little details. This question cannot be answered on a global scale; it must be answered on a local scale — urban versus rural, Canada versus Indonesia, English versus French, wealth versus poverty, book selling versus pastry selling versus computer part selling. Having a brick and mortar store is going to be a lot more important for a bakery in small town Georgia than it is for BarkBox, which makes its money from delivering to vast quantities of people over a large region.
This debate also harkens back to conversations people in the magazine industry have about going online or staying in print. The phrase “go online” is now mostly redundant; most every magazine has an online component, though they may not have a print one — the opposite of how it was a few decades ago. But some magazines (like Geist) function best in print, and some (like Daily Hive) are best fit for online. Neither one is an evolution or devolution of the other; the two markets can coexist, and its unlikely that either will die out altogether.
To tie this all back to the publishing industry, I think that book stores are at less risk than maybe any other market of losing online marketspace — Amazon has made sure of that. Regardless of their growing fleet of brick and mortar stores, accessible only to those who live in coastal urban population hubs, Amazon has carved out an unpenetrable niche in the online book market and continues to cannibalize brick and mortar book sales. It’s not a matter of booksellers having to figure out whether online or brick and mortar is the better option — it’s whether either is sustainable at all. Amazon’s sales strategies aren’t realistically replicable for most businesses. You don’t watch what they’re doing so you can do it too; you watch what they’re doing so you know how screwed you’re going to be down the road.