There is some interesting research on how bookshops promote a reading culture. It argues that browsing is essential to getting people to read books, and seldom occurs online. This seems counterintuitative, as an Internet search engine should be the perfect mechanism for serendipitous discovery. I suspect that there is something about the physical feel of a book that makes physical browsing attractive in a way that sitting in front of a computer is not. The article also argues that the demise of a bookshop does not mean that it's sales migrate to other channels; most of them just stop.
This seems to me to have an important message for libraries, where you can browse all day for free. Currently, some writers and publishers seem to assume that leading cannibalises their sales, but it seems quite possible that municipal libraries are actually doing exactly what their Victorian founders intended, promoting reading among people who would otherwise not. If so, the book industry should be trying to think of ways to promote libraries and forge links with them.
In response to the comment:
The Willesden bookshop was a business which was suffering from the same pressures as other bookshops, not least its sister outlet on Kilburn High Road. As a frequent user of bookshops, I greatly regret the decline of physical bookshops, but it seems to me that many of the attractions of a good bookshop can also be seen in a library. One reason that bookshops are said to be in decline is that people browse a book in the shop, but buy it on the Internet. Why not browse and try out books via libraries?
Incidentally, the juxtaposition of the Willesden bookshop next to Willesden library for so many years is a point against the Terry Deary argument that they are in competition.
The fact that the bookshop was struggling, the cinema closed and the cafe also closed suggests to me that the existing building is not well designed for retail use. I have remarked before that the frontage does not entice people in.