This is a great question. I do not think we need to choose one or the other. As long as things are done well both will continue to grow. However, I do believe that things will get more competitive. Let me explain by way of examples.
First, J. Crew was only a online and catalogue company. It did very well and started opening up many store and they still do well. Therefore, they have two streams of income. Amazon.com is another possible example. They are a huge online presence, but now they are considering opening up physical stores. If they did so, I am sure that they would do well. They are so large that they can get good prices. Moreover, they have brand recognition.
Second, many traditional store are seeking online presence. All major stores and companies have an online presence. This trend will continue.
In conclusion, as long as the business model is good, both model will succeed. However, I would say that the biggest growth will probably be online.
Clicks because prices online are cheaper and for a person who doesnt have much time to be going to an overcrowded store and standing in like to check out, online shopping is the easy solution.
I believe the future is in online shopping. Many people nowadays have very busy schedules and do not have enough time as they would like to go shopping so they do it online. I believe stores will still exist but online shopping will be the predominant source when it comes to buying.
I think it depends on the product. For example, we have already seen the dwindling of brick and mortar bookstores thanks to e-books and e-readers, so even the large chains have been going out of business over the last few years. This also goes for video games, dvds, and music. However, certain things such as shoes, clothing, and personal products (shampoo, soap, deodorant, toothpaste, etc.) are still purchased in stores for the most part. This may be because people still want to try things on, feel them in their hands, and look at all the options available before making a purchase...partly because returning something that doesn't fit can be a time-consuming pain in the butt.
I believe online shopping (clicks) will become the future of growth retailing and you can see how many companies are trying to adapt to it by starting online retailing stores, making deals exclusive online, and also by having sales back to back that you would see in a regular store. Also as we begin to see human interaction dwindle many people are opting out customer interaction and rather take their chance at shopping online.