Very interesting article in Inside Retailing this week predicts that the future is ok for mega size/ mega cheap retailers at one end and small highly specialised niche retailers at the other end, but those in the middle will not survive.
The customers who want good price and not much else will flock to the mega stores and the customers who want product connection and personal value will go to the niche retailers. That leaves stores like Harvey Norman, Myer, and David Jones (who try to do everything) in no mans land.
Having, or finding a point of difference appears to be the key for market traders.