Athlete Service in Henley on Thames (no connection) have a large workshop just inside the door opposite their proper Italian coffee machine and cake shop. They have picnic tables inside to sit at which have sample bike computers to try as you sip your latte. This means the mechanic can chat and serve customers while remaining productive. Also gives confidence to see them work!
If you walk past all this they also have some bikes and parts for sale at the back next to where you can park your bike indoors while you have a coffee.
This to me is the future of LBS. The profits come from coffee and cake. They make a bit from high quality bike servicing and both of those fund enough stock parts to rescue a ride.
I don’t see any point in mtb demos at a LBS. Trail centres have demo days for mtb and are a better location because you can actually try the bike properly. I can see road bike demos starting at a bike shop, and participated in a clothing demo day at AS where we discussed the product over coffee afterwards.
Personally I’m a bad use case for LBS as I build my own including wheels and my components are never stock items because, well, I’m a bike snob. I’d hate to lose local shops so all these ideas to keep them in profit are great.
Let’s face it though, coffee is probably the answer looking at the high street!