Are physical retailers anything more than a property punt?

The electronics retailer Best Buy would have you believe so. The company was once on the ropes due to "showrooming" - where customers walk into stores, take some snaps and then make their television or laptop purchase on Amazon.

But in the past five years, as Amazon has become an even more ferocious competitor, Best Buy shares have rallied 70 per cent. This week, it reported earnings that were up a healthy 28 per cent for the year.

Those results belied an ugly market for physical chains. Just a day earlier, Target announced a revamp of its business model: the uncertainty caused its shares to tumble by 12 per cent. There still may be hope for bricks-and-mortar retailers. But survivors look to be the ones who acknowledged their mortality some time ago.

About a fifth of Best Buy's sales are classified as online. In truth, the line between digital and face-to-face sales is increasingly blurred. Many customers tap the expertise of sales reps but order electronically at a discount. Slashing overheads and steadily closing stores has helped maintain margins.

Target has doubled its digital sales - but they still only account for 5 per cent of its total. The company says it will contribute $US1bn this year towards lowering prices and thus profit margins (its operating income in 2016 was $4bn).

At the same time, it has not given up on stores as generators of traffic. It will remodel 600 of them in the quixotic belief that the right format can still tug Americans from their phones and keyboards.

Target's relatively low debt load - $13bn against an equity market value of $33bn - contrasts with big name retailers like Sears and J Crew. They have to revamp their business models from within the straitjacket of heavy leverage. Target's headroom may be reassuring to creditors - but its shareholders see little reason for enthusiasm. If only retail was as simple as a property business.