In the era of knowledge economy, information technology is developing rapidly, and the continuous innovation and upgrading of Internet technology has brought unprecedented changes to people's consumption patterns and consumption habits. On the one hand, the accelerated pace of life pushes consumers to choose more efficient and quick purchasing methods, and the consumption patterns of traditional retail companies are obviously difficult to meet this demand of consumers. On the other hand, the increase in rent, labor and other expenses has increased the operating costs of traditional retail enterprises. Based on a clear transformation strategy, innovation in business models, channels and technologies has been realized. This article analyses and discusses the transformation of traditional retail enterprises in the Internet age based on discussing the challenges that the traditional retail industry faces in the Internet age.