As an effect of the exploding e-commerce, an increasing number of stores have been forced to shut down the last years, which has resulted in an increased interest in what will be required of the physical stores in order to survive a digital era.

Digitization has changed the global retail industry for consumers and has changed the playing field for commerce and challenged successful business models. Competition in the retail industry is harder than ever and more companies are expected to step in and take market share. The purpose of the thesis is to increase the understanding of how the physical stores work with their customer relations in order to create customer loyalty in a digital era. Previous research has shown important factors that affect customer relations, but this research is mainly carried out outside Sweden. Therefore, this thesis focuses on physical stores' customer relationship work in Sweden.

In order to gain a deeper understanding of how physical stores work with their customer relations, semi-structured interviews were conducted with standardized questions and follow-up questions and analyzed using previous research in the field. The conclusions of the analysis were that the work with customer relations is an important factor that affects the customer's loyalty to physical stores and the choice of online stores. In addition to that, the personal contact, the expertise and competence of the staff, service, the importance of customer analysis were important factors.