I buy local for most stuff. A couple of shops in the area give me discounts that makes them competitive with on-line shopping once you factor in shipping. Oh, there are times when I order on-line because the local guys just can't come close to the on-line price.

In fact, I probably pay about 15% premium to buy locally, but I am willing to pay that. The local store has the parts in inventory, they are a great help, and I like talking with them. We share advise and send each other business. Sometimes the LBS even volunteers to lend me tools.

Better yet, the LBS will quickly and happily change parts if you find out you bought the wrong one.

On-line business will absolutely change all commerce, not only bicycle shops. Obviously, the local guy can't compete on price for every part every time. If you want or need an LBS, then support him/her with your business. Otherwise, you may find yourself on-line more looking for parts and asking for advice on how to fix stuff yourself.