When Bezos said "Your margin is my opportunity." he was talking to consumers and not completion. Amazon is killing off small business and forcing tax payers to take up the brunt of Amazons expansion.
But buying toilet paper, towels, and other random supplies is not a fun or enjoyable experience. There is nothing fun about going to a big box store, walking down crowded aisles, loading up a rickety, squeaky cart, and pushing it to a checkout lane with a long line. No one likes going to the store to shop for boring stuff so Amazon delivery is a clear winner there.
But brick and mortar isn't going anywhere. It will always continue to be successful for sales that are actually fun and enjoyable things to buy.