I think if local gaming stores want to build a loyal customer base, they need to offer a rewards membership that differentiates itself from the competition. By that, I mean something that highly incentivizes rare trades and rewards customers for it. Or something that encourages trading in using that credit to buy a new game on the spot. I could trade a game at the store and immediately run to Best Buy to buy it for 20% cheaper. What more are shops doing to ensure my money stays within the business?
I see very little in the realm of customer appreciation among mom and pops, which you mention. I get it might not be feasible to offer 20% off of everything with a membership but there's better ways to draw customers outside of Buy 2 Get 1 Free on all Preowned games. The Gamestop model is obviously floundering as we're seeing with this ThinkGeek bullshit cluttering the stores. If I buy a rare game, I think stores should be offering a coupon of 20% off your next purchase in-store. I'm sure any of us could come up with innovative ideas. There's so many different ways to incentivize customer to purchase at your store. Granted, I'm no business owner, so maybe this would be difficult to execute, but many of these stores lack creativity. They seem like they're always run by young college dudes or middle-aged geeks who didn't really know what to do with their lives so they opened up a game store. Nothing wrong with that, but their business model is always underwhelming and you pick up on the lack of business savvy.
So many of the stores I go into have shelves of games you can just tell people unloaded all their shit just to get rid of it. It's crap like Madden '05, Spongebob: Battle for Bikini Bottom, Mario Party 27, Peter Jackson's King Kong. I don't want spend my money on the sale price of Shrek 2 at $3 instead of $5. There lacks an ecosystem that encourages quality, at least from what I've seen.
I think the other poster is right in that stores typically operate both physically and online. I also think the other, probably main problem, is inventory, at least with new games. You order too many games, they sit on the shelf 4 months and plummet in price. You order too little, nobody comes to your store. I imagine most of these shops don't have a sophisticated inventory management system. Gamestop can go and sell their games online. They'll be one of the first search results on Google next to Amazon. Gary's Gonzo Game Store is shit out of luck with their 20 extra copies of No Man's Sky.