The Wal-Mart model can't last indefinitely. Sooner or later the suppliers -- particularly the Chinese suppliers -- are going to move to sell directly to the consumer.
Want an MP3 player for $25.00? Come and get it.
Stores provide two things internet sales never will be able to:
Tactile testing, a lot of products you want to feel it before you buy it, we've all seen some really nice looking incredibly uncomfortable chairs in our time.
Instant gratification, when making fun purchases getting it home immediately just adds to the fun, and when making necessary purchases you frequently need it now not in a week or two.
Those two factors will make sure brick and mortar never become a sideline in retail. The internet will continue to take away from in store purchases for a while, but eventually it will level out, and I think brick and mortar will keep over 50% of retail.