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If recent events prove to be bellwethers, digital in-store work is shaping up as a key battleground among interactive agencies going into 2013.

SapientNitro increased its bet on digital in-store today, acquiring Portland, Ore.-based Second Story for an undisclosed sum. The boutique focuses on interactive shopping features and counts Coca-Cola, Nike, National Geographic and the Museum of Modern Art as clients.

“Digital is now a critical part of our daily physical lives,” SapientNitro’s Don Chesnut, chief experience officer, said via email. “Because of the seismic shift in consumer behavior, digitizing the physical space is the newest frontier for brand storytelling and … [connecting] companies and consumers in innovative ways.”

Second Story’s 35-person team will remain in its Oregon office, while the firm’s co-founders, Julie Beeler and Brad Johnson, will report to Chesnut. The 17-year-old agency will continue operating as its own brand while getting pitched as part of the SapientNitro product family.

Chesnut said the acquisition strengthens SapientNitro’s ability to craft “storytelling for today’s always-on consumer.”

The development comes on the heels of his company releasing a dense research report called Insights last month. Its key finding was that big retailers like Victoria’s Secret and the Gap were failing to deliver meaningful interactive store experiences.

Digital in-store seems to be all the rage right now. Three weeks ago in Atlanta, Razorfish opened a 750-square-foot space dubbed Emerging Experience Practice, where current and potential retail clients can see tech bells and whistles designed to create cool marketing features. For instance, they might personally test image-recognition software that identifies characteristics like gender and age before digitally displaying targeted offers in real time.

“From a retailer-versus-retailer perspective,” said Jonathan Hull, Razorfish managing director for the Emerging Experiences Practice, “I think this is going to be something of a battleground. This is one of the hottest areas. You are going to start seeing companies one-up each other."