Basically, it just changed to where small businesses need to be niche stores. You simply can't sell things that you can get at WalMart, or easily online.
This is why Antique shops, specialty boutiques, restaurants, etc. are what you'll find in most downtown shopping in small American towns.
Good example, I have a local hardware store near me. Mom and pop, run by that family for years. But, their odd hours and limited inventory (as well as a lot of cheap stuff from China), generally has me going more to the Lowes further up the road. I'm not sure how they are still in business.
It's one of the reasons I'm urging the wife to abandon the Tack Shop business (we have a saddle shop and sell bits, bridles, and other horse gear). Nowadays, it just costs too much to keep inventory in stock, in the hopes that someone buys a $700 saddle. Granted, same saddle may be $800-$900 online (and we paid like $400 for it wholesale), but still, that's $400 that is just sitting there doing nothing for months on end. Multiply that by a few saddles, and now you see the issue. Right now, it doesn't really COST us anything to have the shop, but we're not really getting much out of it either (maybe a profit of about 3 grand a year). With a different business, I'm sure we could double that...so here's hoping I can convince her.