What people don't understand is that many internet sellers have no or very little overhead. So it's impossible for a mom and pop stores to compete.
It's impossible to compete on price, but they can certainly compete on service.
Sadly, it's the "service" where local gun shops start to fall down and it goes beyond a failure to do good inspections of all the firearms they stock to ensure the customer gets a quality firearm
Yesterday for example, I bought another FEG P9 Hi Power (I like them and they can still be found in excellent condition at good prices). The local gun shop had a P9 and a 1st gen P9M. I asked to look at them, given that they are surplus, the excellent exterior appearance isn't the full story so I wanted to field strip them. The guy showing them to me said "no" but was immediately over ruled by his daughter who pointed out I'm a regular and I made a lot pf prior purchases.
She recognized the situation for what it was and in the process made a sale. He stood there looking constipated as I field stripped the P9M, and discovered a rusty and pitted bore and some other internal rust. I showed him the rust and then rejected it as an option (although I may reconsider if they'll knock $100 of the already very reasonable price to cover the cost of a new barrel.)
The P9 got the same treatment, and while it was only about 95% on the bluing, the internal condition was great. So it went home with me.
A surplus FEG P9 is not a firearm I am inclined to buy on-line for the reason made obvious above, and I won't buy one locally if I cannot fully inspect it. The ability to allow a customer to inspect, and/or a no questions asked return policy is the "service" that a local gun shop can offer in this kind of situation and it adds value over an on-line purchase, and thus can justify a higher local purchase price.
In this case, it meant I bought an NRA "very good", near "excellent" condition FEG P9 for $329 ($352 with tax), when I would not buy the same pistol on-line for the $279 they've been selling for recently (given that an on-line purchased FEG P9 would quite possibly be in only "fair" condition, and after shipping and transfer fees would cost around $325 anyway). And if it had a rusty bore I'd be out of luck.
The lack of service applies to accessories as well.
For example, we have another shop in the area where I spend very little money. The reasons are obvious. Recently I was looking for a speed loader for a 686+, nothing fancy just an HKS 587. I could get one on Amazon for $10 with free two day shipping with Amazon Prime. However, I wanted to give the local gun shop a try. This shop normally stocked stuff like this, but did not have one currently. They indicated they could order one for me. (So far so good). I asked "How much?" and "How long?" and they indicated $20 and probably about 2 weeks FROM THE DATE OF THEIR NEXT ORDER - and they were not sure when the next order would go in.
I told them I'd check back in a month or so and see if they had one in stock. That's customer speak for: "Screw that, I'll order it from Amazon for half as much money and have the box on my front porch in 2 days".
The irony here is that if the local gun shop can ALSO order off Amazon, just like I can. All it would take, if they establish a Prime account, is a quick search and a click on the "buy it now with 1 click" radio button. In fact, I just did this in under 30 seconds. The top listing for "HKS 587 speed loader" is $9.99 and the estimated delivery date is tomorrow, given that it's still morning.
Similarly, the LGS could have told me as a Tuesday morning customer that it would be in the shop and ready for pickup probably on Thursday but for sure on Friday. If they took the customer service one step farther, they could take my number they could call me when it arrives to avoid a potential wasted trip if it arrived a day later than estimated.
They would have paid $9.99 just like me, but they still could have marked it up to their normal $20, or knowing they had cash in hand and an already made sale, they could have given me a discount and sold it for $15. They'd have made $5 or $10 for 2 or 3 minutes work, and made themselves the first stop for my shooting accessories.
But they didn't.
They are still stuck in a pre-internet, send in an order form to your supplier every month or so world. They are not going to thrive in the real world.