the title said retail not customers

I HATE the idea of purely digital. The hype around all digital is strictly that. Hype. Almost NO ONE wants it as the only means of purchase. As long as we, the consumer, don't want it, it will never fully be adapted. To me, the biggest reason is (for me especially) I love having my game collection, love the idea of a disc that I can collect, keep, trade, sell, give away, hell I can throw it away if I want. I have about 4 full digital games on my console, and I have noticed I rarely play those games, even given their convenience of being pre-installed and ready to go. I applaud what you're trying to get at here.... but it is greatly flawed. Because YOU feel this way, doesn't make it so. Much like my opinion being the way it is doesn't make my way the right way either. I hope we never go full digital, and honestly, I doubt we ever will. Not anytime soon anyways. The consumer dictates, and right now, they don't want it. We like it as an option, but I don't see it ever being anything more than an option for those who want it. Physical is here to stay, for now and the foreseeable future.

Ok.  And if customers have no reason to buy physical copies because all of the benefits of physical media are taken from them, how does this help retailers?

Perhaps I'm missing something somewhere, but your argument seems to be:

"Retail should support X-Box One DRM because DRM will cause companies to go fully digital which will then bar retail from making any money whatsoever."

...how exactly is that a good idea for retail?

Full digital is a ways off yet. Even Developed countries have poor broadband infrastructure and data caps. Still waiting for fibre to come to my area and have a data cap of 250GB/Month. Games are 10's of GB to download (Retail games) and if PS4 was download only that cap would be filled soon, especially considering there's gonna be 2 PS4 's in the house on top of netflix streaming and the usual.

All that extra effort would lead to nothing in return for them. It would only damage them.

Also, i don't support digital only, why should i? I should be able to get a refund or sell on if i demand to. Also, it is far from convienent for me. GTA IV on steam took me 4 to 5 hours to download. I might as well go to the game shop and buy it. Also, is it convienent on handhelds like 3DS or VIta? which require you to buy memory cards which are not always cheap. I don't think it is. Not only that, but digital versions of retail games are a rip off even for some games on steam (£35 for a Digital PC game!) but especially on consoles. 

because at least they had the disc.  i.e. something for retailers to put in stores.  once its all digital it would reduce gamestop to selling nothing but used games

DRM is far more liable to cause companies to switch to fully digital faster. Once a company gains rights over resale of a disc, it's a much smaller step to then gain rights over who gets to be the primary seller, as opposed to having rights over neither and then suddenly claiming both.

Besides, the vast majority of retail stores (such as Gamestop's) income comes from buying and selling used games/accessories/hardware. Giving up there would essentially be dooming the company to failure right off the bat.

I don't agree.. first off digital is not as convenient as some think for too many people.. with limits that you have on Data or whatever you wish to call it.. still out.. poor Inet speeds still going on.. and some areas where the Internet services needed for this to take place.. either not being available.. or sometimes not affordable.. it takes hours and hours to download a game.. for me.. it would take a day or two most likely.. and to top it off..it hurts my collection.. (Not that I have a big one but still) anyway when it comes to digital if I have a choice between hours of dloading and just making a 15 minute trip to my GS... or having it delivered from Amazon D.O. R I just make the trip.. or preorder.. I don't ever get the retail games off the Internet.. and once again I would point out.. that the idea was to save money for everyone.. not just one side.. and that most of the time.. when retail goes on sale in digital.. you can find the physical copy for the same price.. and sometimes cheaper.. plus as was mentioned.. games are taking up more and more memory... and if you have to buy cards.. (Like on the portables) that can be a pain.. so anyway... and may I ask a question.. why did you have to have DRM or get none of the other features on the XBOX One.. that kind of smacks of laziness and or greed.. I mean seriously please tell me why you can't share the apparently.. timed demos with your friends and family??

They were only doing that so the retailers would carry their console and wouldnt completely block it. I dont know why anyone would go and buy their digital copies in the shop for the old Xbox1 model. There was no point. Its not like you could resell the disc.