The other day I was shopping for a camera lens, and instinctively I went to Amazon first, I found the lens but it was not shipped with Prime, so I went to look for it at B&H and Adorama. The difference to me is that if something says "Prime" then it's in stock and ready to ship, otherwise it will take over a week. B&H and Adorama both have their stuff in stock and are ready to ship the same or next day, so I know I'd receive it within 2-4 days.
Now compare that to the option between waiting almost a week for something from Amazon without prime or picking it up the same day from a local store as you had mentioned. Prime is definitely an incentive for me to even look at Amazon, let alone shop.
Amazon where I live delivers in 1-2+ weeks and has prices which are similar or more then local shops.
Local shops deliver next day, have excellent warranty and customer service and prices are the same or lower... Also no force pushing of prime or getting nickle and dimed for delivery.
There's also the issue of not finding anything good on amazon (lots of knock offs), whereas other shops have curated lists with nice filtering and advice...
Something sold by a local B&M is defective, it has to be "checked by the repair department/importer/subcontracted local service center", for a coue of weeks to a month, then if the people holding your stuff decide to ghost you you're SOL.
And good luck returning things that "technically work" but not really, like a toaster that warms up but doesn't toast bread, or a non-stick pan that sticks.
In EU by law anything sold online can be returned in 14 days. (with some exclusions like personal hygiene)
So i don't see how B&M can skip the 14 days, I could report them to consumer protection agency and they'd get massive fines.
Ironically, amazon is in the 14 day bracket for no questions and 30 days for defective... so worse...
Customer service - I can contact local shops on whatsapp, I can drop by thei physical locations, etc
I cancelled it immediately. Yes, I can afford $2 extra a month.
No, I'm not going to pay $2 extra a month to the most profitable company on the planet to make sure their margins don't decrease even slightly.
I cross my fingers so that they will get punishment from the market.