Though times have been hard and many LHS have closed their doors, it is for mulitiply reasons. LHS owners cry about the impact of the internet has had on their sales. Some will tout that internet businesses don't have the 'overhead' which is totally untrue.
There are some 'out of the closet' internet retailers out there who collect orders all week, pool them, order the items from their distributors, get the stock and simply redistribute it to the customer thus filling the order. They stock very little, thus turn around time is longer and they offer a slightly lower price...they are mearly a jobber or 'kit broker' for a lack of a better term. Their impact is minimal.
Any business that has been successful or has failed basically boils down to decisions the owner of that business has choosen to make. A good business decision equals prosperity a bad one failure or a step down the road to that end.
Many LHS owners fail to remain viable for several reasons, reasons that we hope to reeducate them about at next years iHobby Expo. The HMA is working to develop materials for seminar(s) to help them revitalize their businesses. By the way...if you look at the economic figures LHS overall are holding their own. Abeit, some better than others...again it is based on making the right business decisions.
LHS have to regain their status as destinations for hobbyist. They need to have not only product selection, but solid customers service...not some old crankster behind the counter or some punk chatting on the phone or on the computer ignoring the customers. The clerks need to have a working knowledge of the various categories or know whom to source to get the answers the customers are asking.
In many stores, you can tell who has a working knowledge of what categories by the sales of any given day. Plastic sales will do well when the clerk has a passion/knowledge for the category, and on another evening when the RC guy is there his category will do well. Finding a balance of information is crucial to evening the sales statistics. Training! You walk in, ask a simple question and you are met with an 'I dunno' you're likely not to return. A customer lost because of attitude and lack of training.
Location location location...is important, but if you don't have products, service and knowledge you won't draw customers. Price. Well modelers are notoriously cheap...but they will pay to get what they need and want. Look at the prices paid for stuff on eBay!
More LHS are jumping into the frey of the internet and internet sales. They have to to survive. I've had discussions and in the coming months training materials will be developed, articles penned and conversations initiated that the internet is/could be another 'branch location' of an existing brick and motar operation. As a LHS you have to approach it in just that way...another store with staff and yes...overhead!
Today, the younger generations, and it is trickling up into the older generations as well, one doesn't look at the Yellow Pages to find a source...they go online! Having an internet presence (properly done) opens the LHS to a greater geographical footprint than a simple Yellow Pages add...and comparible in costs.
Don't rule that the death of the LHS is imminate, infact I believe you will see a resurgance of LHS presence in the market. Why, without them where will the manufacturers turn to sell their products and service their customers. Many companies have opted to eliminate their 'distribution level' to increase profit...but if you strictly believe that direct sales to the end user is the creme de la creme your drastically wrong depending on the product line.
Some of us remember (and in some locations there still are) separate stores for...meat...bakery...dry goods...dairy...now we visit and purchase it all under one roof...grocery store. Tailor...cobbler...appliances...toys...greeting cards...pet supplies...we call this a department store.
My appologies for the long winded speach...but if we take on the mindset that the world is ending...it will. We open ourselves up to stupid people promoting stupid idealologies...remember any?