I come at this from the other point of view: I used to work as an equity analyst (analysing companies), and I ended up gravitating towards retail.
The issue, as you imply, isn't only that Amazon is very good but the experience at many physical retailers is very poor. It is difficult to simplify this down to one thing imo.
Managers in physical retail are unusually bad. Retail used to be ludicrously profitable, so most companies have a dense layer of MBAs who have no real idea how to adapt or innovate.
I recently read The Secret Life of Groceries (not great tbh, but did cover some useful themes) and towards the end of the book (paraphrasing), it is framed as grocers all "compete" to be the best version of the same thing. They strip all the difference out of their product, usually compete solely on price, and (ofc) someone eventually comes in and undercuts them. That is a failure of incentives and management.
This varies by industry, and is not limited to incentives/management. One reason for the lack of innovation in sports apparel is that there are basically two suppliers, and one of them is moving heavily into DTC. Every sportswear shop is just a Nike distributor, so there is no real differentiation there (the only innovation in the sector has been distributors moving up the chain like Sports Direct and Decathlon in Europe). So the reason why you can't find shoes cheaper is actually because of Nike, not distributors (and those distributors lack any capacity to innovate, management is mostly composed of MBAs who likely have worked at Nike or Adidas at some point).
But the solution is counter-intuitive: keep buying from Amazon. There is nothing structural or inevitable about Amazon's success (compare them with the large Chinese retailers, they actually look quite blundering and incompetent, they have made mistakes in distribution already that are going to choke them). Physical retail needs more innovation which can only come through firms dying, and entrepreneurs thinking about what consumers want (this happened with WMT, there was consolidation then competition as WMT got overrun by MBAs and they lost their edge...Tesco in the UK is a very extreme example of this too).
I wouldn't be pessimistic either: the distinction between online and offline retail really doesn't exist. Look at restaurants like CMG, they are taking most of their orders online...but that doesn't change the product. It is the same with retail: taking an order online doesn't change the fact that the retailer is holding some product somewhere, and is distributing that to you (this is the mistake that Nike is making, they are going into DTC thinking they just can just cut everyone out, and jam up prices...it is MBA, day one strategy, and idiotically wrong). The real difference with offline retail is actually the cost of property, which is going to narrow over time. Ofc, this isn't universal...some verticals like hardware stores are ready-to-go already, others like clothing probably aren't (there isn't much value-add at consumer contact, and they pay v high rents)...but the innovation will come. I don't think physical retail is dead at all though. If anything the weakness of physical retail is that MBAs stripped all the life out of it which left them open to competition from online. Online is just delivering the message that consumers have had enough.
EDIT: I will add that personally I think a lot of the stuff on Amazon is terrible. A lot of retailers in the 2000s were just innovating by going deeper into China, and closer to factories. Amazon just took that to it's logical conclusion. It works for some products, not for everything. Branded stuff also tends to be fake.