Friendly staff is paramount. If the staff sucks, I don't care what the shop sells or how good the prices are, I'll find another shop or go online.
Knowledgable staff is a bonus for me, but not mandatory. I tend to do research online and come in knowing exactly what I want. However, to attract new brewers I guess skilled staff would be super important. Lots of people probably wander in with half a clue. I guess I did the first time!
I will happily pay a small premium to a local store when buying gear, but the price difference compared to online (or to the other store in the neighborhood) has to be reasonable. Sometimes things cost 50-100% more in the LHBS. Even if I love your store, even if that's just how the math works out for you, I won't pay that kind of markup.
My preferred LHBS does CO2 cylinder exchanges, and their price is the same as going direct to the welding store--they buy the cylinders wholesale, and mark them up to be equivalent to the welding shop's retail price. It is a great convenience and it feels like a good value. (My other LHBS has cylinders too, at DOUBLE the cost of doing the swap yourself. Bananas.)
Stock phosphoric acid, not just lactic acid.
Lastly, here is something that I really really love in retail--when a store stocks
good stuff and steers customers to making a WISE decision, not just the cheapest one.
For example, my LHBS stocked co2 manifolds. They were the cheaper variety with the red handles on the valves, not the nicer valves like you see on Keg Connection manifolds. Well, I bought one, and it leaked from one of those cheap rickety valves. They took it back... but then I bought a better one online, for less dough. The better version just wasn't an option at the LHBS.
If there is a dramatically superior choice in gear, only stock the superior choice, and educate your customers as to why you are doing that. Put up signs saying "this is the best _____ because _____." Advocate the good products wherever you can. When a trustworthy shop does this, it is hugely helpful. I work hard on research most of the time but even I can't always know exactly what to get.
I realize that removing choice from the consumer can be risky, and people have to shop to a price point... but at the least, don't sell junk, even if it's popular junk.
Good luck with your shop!