They offer a service that can be consumed for free: physical interaction with product on the show floor.

If you consume this and then buy on Amazon, Amazon is effectively unloading the marginal costs of running show floors to the brick-and-mortar stores.

OP is talking about a small toy store, but regardless - an international franchise that has a location in your home town employs people from your home town, whereas Amazon (for the sake of argument in this case) does not. That's the core argument of 'buy local'.

Pretty sure the person who delivers my packages doesn't live in another country.

A tiny fraction of the alternate, yes. Though of course much of the logistics planning an operations is easily outsourced.

Though it may be an international franchise, it still provides local jobs.

Amazon provides salaried jobs at their regional warehouses, and revenue to the resellers, and revenue to affiliates.

Perhaps the only thing missing is a way to sort results on Amazon by locale.

Amazon may be local to my state but the small toy store is local to my _city_. The warehouse four hours away means less to me than someone who pays taxes in my city and lives two miles away.

If there were an Amazon warehouse nearby would that change things for you?

I live about 2 miles from both amazon and jet warehouses, and that doesn't make it feel any more like a local business.

I don't think the size of the warehouse matters - that's like caring how a big the kitchen is at a great restaurant. It's the experience of finding the thing you spend money on, and then getting whatever value it is you hoped for.

There is a physical constraint aspect to local businesses that create an inherent diversity. Being next to a huge store curated by one entity is much different.

Would you rather live next to a Wal-Mart or a thriving strip/block with a dozen or so various options? It depends on your needs and desires I suppose.

A slight price increase can be more than worth getting an item immediately instead of waiting for it to ship, while 1 to same day delivery would be generally much more expensive.