Well, the prices are always going to be a lot better when you can buy something online, thats just going to remain true unless someone either tries to undercut online sites, which is impossible if you want to make a dime while keeping your doors open; then there is the idea that online retailers will raise their prices to compete with stores.
Years ago I tried selling some Battletech minis online. I didn't want do 2 things.
1. I didn't want to cheat myself out of a fair profit.
2. I didn't want to ruin business for shops.
The first thing I wanted to avoid was personal, why have $5 when you can have $10? The second is because the local game shops were dead. The first was simply out of business while the other store just dropped support for everything but 40k, which is not my game of choice. I didn't want to help cause the problems that led to the demise of the game shops around here. As the wholesalers said, it is the shops that allow people to get into the games that online retailers are trying to sale for a profit.
I got into the L5R ccg because of a stop at GE last summer and from what the staff and regulars had to say about the game. I had known about the game for most of the 15 years it has been around, but I never tried it or really looked into it. It is a game that I enjoy that I wouldn't have gotten into if it was not for a shop where the people had something to say about it. I think the entire board game/ccg/tabletop game market needs to have shops around that are going to be the haunt of those that play it and have staff members that know about the games. Online shops are unlikely to have a paragraph of information other then what the back of the box/book would have.
Personally, if I can buy something cheaper online, I might just do so, but if there is a shop that does more then simply sell product, I am likely to keep buying something from them. I know I can get more booster packs of L5R on the cheap online. I can kill the shipping charges if I can get another person to combine orders, or I just place a decent sized order in order to preserve the savings. Its the simple truth, but sites don't offer a place to play against other players.
There is something that online shops cannot replace that is necessary for these kinds of games. A site cannot reduce their prices enough in order to counter the lack of socialization they can provide. Saving a few bucks is always nice, but these games aren't meant to be played solo. Stores such as GE provide that social aspect that is needed to make these games run. Kind of like trying to sell PS3 games to someone that doesn't have electricity or a TV to hook it up to. Its cheap, sure , but you just can't play it making the game a paperweight.
I am not sure about the PDFs for RPG game books. I have bought some online and while they were significantly cheaper then the book, I cannot use them outside of home. Until there is a e-reader that will work with all file times and within the price range that I find acceptable, books are simply going to be the better choice for gaming. Of course I like having the hardcover book that I can access without the need of anything else, no need for power, no need for a computer or e-reader, nothing. Just grab the book and read away.
One of the shops that went out of business had plenty of tables for gaming, more then GE has. The deal was that they required you to pay $3 to rent the table, or you had to buy something. More tables is nice, but they did not offer drinks or something to munch on while gaming. They didn't have music and wouldn't allow anyone to bring their own. Their hours were also weak in comparison.
The music can be a bit louder, a bit more geared to my personal tastes, but as far as game shops go, of the ones I have seen before, GE has an advantage over them. As for online retailers, it is a completely different animal and there is nothing to do about the difference in prices unless you can find a way to lower the prices, but still make a decent profit. Focus on the environment that the store provides players as that is what is going to bring people back and keep them around. Having people around playing the same games you are selling is a great way to make additional sales as players get to see and try out the products before spending their cash. Its about creating an environment that people want to be in, that enhances their gaming. We are social creatures playing social games, online retailers can't tap into that, but GE and other shops can.
The online presence is something that I and many others have thought is basically a requirement today in order to compete. Nothing annoys me more then a business that does not even have a half baked webpage. Its the modern equivalent of not having a sign, it is that basic. Sites are a basic requirement, social media is the next step. Get some pictures of the interior and exterior of the store. Pics of gaming events that you have and also just every day normal shots. If it looks like a great store people are going to want to check it out. If it looks like people are having fun, people are going to want to game there.
I haven't been there much, but a few things off of the top of my head that might help retain customers and draw new ones in are league play, and a reward club of sorts. People like competition, they like to see how well they can do against other players. Some like bragging rights and a bit of local fame. I am sure you have some already, but just in case I thought iwould put that out there.
People like getting discounts, stores love repeat customers. Maybe you can't compete with online retailers' constant discounts, but you can offer x% off after Y amount of purchases or purchase value. It helps remove a bit of that advantage, while instilling some customer loyalty through incentives, while tapping into that social aspect that online shops can't touch. It might sound nuts, but if there are other personally owned shops around the area that GE customers tend to go to, maybe there could be some kind of arrangement set up where if they visit those shops, that shop offers a discount. It wouldn't really benefit GE directly, but it will add to the reasons why people should buy and game at GE. The other local businesses might not mind losing a bit of the profit on their goods if they know they are going to increase their sales. Why not make 80% of the potential profit off of a sale you wouldn't have gotten otherwise? It is also another means of advertising and increasing customer loyalty. It is a trade for business.