Store closures keep accelerating but it's not about online vs offline
Denmark has lost 1,170 retail stores in five years. That's a 7.5 percent decline, and the pace is picking up. Between 2023 and 2024 alone, roughly 4 percent of stores closed, the steepest annual drop in the period.
The numbers come from an analysis by SMVdanmark, and two categories are hit hardest: consumer electronics down 24 percent since 2020, apparel and footwear down 15 percent.
The easy answer would be to blame e-commerce. To say online has taken over. But that's not what the data shows.
E-commerce isn't filling the gap
The most striking finding in the analysis is that in none of Denmark's 98 municipalities does online growth offset the loss of physical stores. In 59 municipalities, the number of online businesses has actually declined.
This isn't a story of retail moving online. Businesses are disappearing. Both online and offline.
So if e-commerce isn't the villain, what is?
Customers have gone digital, but stores haven't followed
Customer behavior has shifted significantly. They research online before entering a store. They ask friends and family via messages and social media. They compare prices, read reviews, and pull inspiration from content created by other customers. The entire decision process happens in a digital layer, long before their foot hits the shop floor.
DI Handel's Retail Consumer Compass shows that 36 percent of all in-store purchases involve prior online research, while only 16 percent of online purchases involve a store visit beforehand. The physical store is still where customers land. But they walk in with a completely different set of expectations than ten years ago.
And that's where the closures start to make sense. The stores shutting down are often the ones that haven't followed the customer journey. They're built as a place you buy a product, not as a place you get an experience that extends everything happening in the digital layer.
Stores need to be relevant, not just available
Physical retail no longer competes only on price or assortment. It competes on relevance.
That means:
Meeting customers with something they can't get online: personal advice, product experience, inspiration
Not stopping the digital experience at the door: using in-store technology to extend and amplify the customer journey already in motion
Becoming a place people share, talk about, and return to, not just a pickup point
It requires retailers to think of the store as part of a larger ecosystem, where the customer's digital footprints get an extension in physical space. Where technology isn't a gimmick, but a tool to make the experience more relevant for the specific audience you want to reach.
What now?
SMVdanmark is calling for a political action plan for physical retail. As Kasper Munk Rasmussen, Head of Industry and Education at SMVdanmark, puts it: "Part of the answer is cutting bureaucracy and regulations, and doing more to digitize physical stores."
That's an important conversation. But regardless of what politicians do, the bigger task sits with retailers themselves.
Store closures aren't inevitable. But they aren't solved by complaining about e-commerce either. They require retailers to understand where their customers already are, and meet them there.
The stores that will thrive over the next five years are the ones that treat the physical space as an experience relevant to their specific audience. Not as a place that just needs to get people through the door.
This is exactly what we're building at Social Mirror
We work with retailers who understand that the physical store needs to do more than sell products. Our interactive mirrors sit in stores across Denmark, turning fitting rooms and product areas into moments where customers get advice, share with friends, and interact with the brand in ways that would only otherwise happen online.
The result isn't a gimmick. It's a store experience that meets customers where they already are: digital, social, and expecting more than a rack of products.
If you're a retailer thinking about how to make your physical space relevant to today's customer, we'd love to talk.
Sources: SMVdanmark analysis based on data from Statistics Denmark, published 6 July 2026. DI Handel Retail Consumer Compass.
