But when I need clothes, car parts, electronic components, computer parts, any physical product with a non-zero chance of failure or an immediate desire really - knowing I can try something on or walk in 10 minutes later and return something and get it replaced on the spot is a killer feature - one that online shopping cannot replace.
I'd go so far as to argue that real stores are always better than online stores - online stores can only win on price and selection. For every other metric around, delivery time, replacement effort, ability to compare and to try, there's just no replacement.
For me, very often the delivery time is less important than time spent shopping. If you want/need something, but not immediately, it is much less effort to click "Buy" on Amazon, and get the item in 2 days, than to spend an hour on driving to the store, walking around to find whatever item you want, waiting in line to make a purchase, and then driving back.
For most people, getting ready to go out, getting to the mall, parking, walking to the store, browsing, buying, then getting home - the total amount of time required for that is way more than ten or twenty minutes.
Re "non-zero chance of failure", that doesnt mean that there's necessarily much of a chance of failure, so plenty of these are fine to get online
There's definitely some things that do work out pretty well to buy online: clothing and shoes are the biggest ones. Kitchenwares are also no cheaper online, according to my recent experiences. I think the big factor is how much volume do people buy locally. Pots and pans are things that just about everyone buys, so local works out there. However, how many people need brake pads for a 1993 Volvo 840 in your local area? Online shopping's biggest strength has long been getting obscure parts that just aren't profitable for local stores to keep in stock. It's not profitable for your local Autozone to carry weird parts for decades' worth of dozens of manufacturers' cars, and for the Autozone 10 miles away to have all the same stuff, but it is easily profitable for one business with a warehouse somewhere to stock this stuff and be ready to ship it anywhere in the country on-demand. No, local stores do not win on delivery time when they have to special-order stuff for you and you have to make another trip to go pick it up instead of just having Fedex drop it at your doorstep.
Of course there are exceptions and extreme price differences where it's worth it to go online, but if it's within 10% or 15%, or sufficiently cheap in general, I'll probably take a store. Shipping often involves going out of my way to pick something up because no one is at my house during the day and even the local post service decides to drop things off in the next town over. Often I have to wait an extra day just for it to show up there and go through a huge hassle to pick something up.
Of course with more obscure stuff or a large price difference, you'll choose online, but in my experience that's surprisingly rare - I shop everything major I buy around and with smaller stuff it just makes more sense to go local. I order IEMs and some electronic components, things I can predict needing in advance direct from China for price and that's about it. I've never placed an amazon order in my life, their prices and selection just aren't competitive in my experience - but I suspect mostly that's because Amazon Canada is a lot worse than Amazon US.
Where I am, I live in a small town about an hour from a major metro area. The only shopping where I am is a super-Walmart. If I want to buy anything that Walmart doesn't sell, it's a minimum 30-minute drive to the nearest commercial district, and that's over a bridge that I have to pay $4.50 to go back home on. In the other direction (no bridge, no tolls), it's a minimum 40 minutes to that town, and the traffic there is terrible so it's a minimum 50 minutes to the shopping district. Both these districts just have the basic retail chain stores that every such place in the US has (except for hh Gregg which was in both locations, but just went out of business).
So, for me to get anything "locally" means a minimum of 1.5 hours in driving and running around.
You seem to have some weird problems with shipping. For me, I order stuff and if I'm not home, they leave it on my doorstep. There's no theft here that I've ever heard of. As for your "huge hassle", it sounds like you have some really serious problems with your postal service there. Over here, the USPS works great, and Fedex/UPS work fine too for the most part. The only time I've heard of people having to go to some other town to pick something up is when they live in an extremely rural area where there's no residential delivery.
Now, for an alternate view, I also have a girlfriend who lives in the metro area, about 1 hour away from me. She lives in a big high-rise condo, and is less than 2 miles from a quaint "old town" area with local shops, plus lots of typical big-box shops in other directions. This is one of the largest metro areas in the US (I'm guessing #5-7 by population), so there's certainly no shortage of shopping. Shipping is easy for her too: the staff at the front desk takes packages for the building residents. But they take a LOT of packages (many are frequently piled up in the front lobby when I visit; I even saw a mattress there one day); people in that building buy a LOT of stuff online. Why? Simple: time. Even though she's in the city, driving to some random place, even on that side of the metro area, is still a good 20 minutes in my experience, if not more, because of traffic and having to stop at so many red lights. You're not going to be able to get anything without spending at least an hour of your time driving there, dealing with parking, picking it out (assuming they even have it), and driving back. Why waste all that time when you can just get it with a few clicks and pick it up in a couple days when you come home?
Maybe I just have bad luck, but as is, ordering online is way more hassle and I only do it for absolute extremes.
I have heard some horror stories from other Americans though in other regions, where they live in someplace so rural that Fedex/UPS don't even deliver without an extra charge (or at all) and they have to pick up their USPS mail at some other town's post office. But that's what you get when you live in an extremely remote place. For people living in or even remotely near any city of any size, receiving packages doesn't seem to be a huge problem here in general. People do complain about getting packages requiring a signature when they're at work, but IME most deliveries from online sellers do not require this, only particularly high-dollar ones.
And of course, since modern men's clothing is so horribly dull and men just wear a t-shirt and jeans usually, that means the large majority of square footage in the mall is dedicated to women's clothing.
Back to those stores that aren't at the mall: 1. Bookstores are still at the mall, but only some malls. It's called "Barnes & Noble". Lots of malls have them. But you don't see the small ones like Waldenbooks any more; they're all gone. People aren't reading books as much any more, and a lot of people who do buy e-books. 2. Not many people buy physical music any more. If they do, they get it on Amazon. Otherwise, everything is either MP3/AAC downloads or streaming music services. 3. No one buys software in a box any more; you just get it online. And a lot of application software has gone by the wayside, to be replaced with SaaS, web apps, etc.
But it's not like music where no one buys music at a local record store any more, except perhaps for some secondhand CD shops that may have survived near colleges. Or worse, software, where they just don't sell it in boxes any more AFAICT and everything is sold online.
I've noticed that Barnes & Noble is downsizing some of their mall stores. There used to be a nice 2-level one with tons of selection at an upscale mall near me. They closed it and replaced it with one with maybe 1/3 of the floor-space in a different location.