"Physical bookstores" refers to brick-and-mortar stores where you can go and browse and buy books in person, rather than buying them online or in digital formats. Full definition
You, an author, want your books in physical bookstores because readers can browse there and discover — something that's much easier in a bookstore than online. (castlegatepress.com)
The other big difference for me is I don't view the loss of physical bookstores as a major loss. (killzoneblog.com)
Since giving up my traditional publisher, I don't have massive print distribution into physical bookstores any more, but hopefully some day that may happen again. (barbarafreethy.com)