I expect that if we are speaking of a 'decline' in the bricks & mortar audio industry (and while I see anecdotal evidence of such, I have never seen industry-wide annual sales numbers shown), it has far more to do with the change in what the customer wants and the way the customer wants to do business than any shift towards worse service on the part of the dealer.
Now, customers can do a great deal of research before they set foot in the store. It used to be that the only way to get the compare the specs, sound qualities, and hear anecdotal evidence was to go talk to the dealer (or other members of your audio club). The internet has made everyone so inclined into 'experts' and has reduced the amount of naked trust extended by potential customers to the dealer. The dealer himself has not lost the expertise he used to have, but for many customers, the ritual of going to the store, asking what's new, learning about the new piece, whether people who have listened have upgraded, about what else might be coming up, and walking out with a brochure and a good feeling because one had learned something new - that ritual is meaningless now. Some dealers may be bitter about this and they hold on to the old model and we think they are stuffy or arrogant. Other dealers have adapted to the change in customer - some by offering stuff so esoteric that it is only available through dealers for the first several years. I can think of at least one dealer who has frequented the Audiogon forums over the years (now less than before) who has made his living this way. If you want the latest and the greatest, you can go to him, or 2-3 others, but they effectively control the market so it will only matter who has the customer first. Some dealers have been successful by offering the service Rsorren1 speaks about above to the clients who still prize that (albeit, it helps to be in a location which supports that model). And others have built a customer service around the home theater installation business.
Personally, I find it interesting that noone puts the blame on the advent of the walkman. When I was a kid, before walkmans, every kid wanted their own stereo. After the advent of walkmans, every kid wanted a walkman and huge numbers of my friends who had showed interest in stereos when they were 12 couldn't be bothered when they were 16. They could play a walkman as loud as they wanted and their mother wouldn't yell at them, it was easy to use (no tweaking), it was cool (new models showed up all the time), and lots of people who were getting their first stereo were interested in music playback more than they were interested in really great sound so something simple like a walkman clicked all the buttons. The way I saw it, the walkman changed the way the masses thought about music. The young people who were willing to stick a walkman on their head for hours a day got their music loud and intimate, and the ritual of playing music in the basement or in one's room (after cleaning a path across the floor) was changed. When discs came out, we got the diskman, but lots of people I know just switched from recording LPs to cassettes on their parents' stereos to recording their friends' CDs onto cassettes. How many kids do you know who have component stereo systems vs how many have iPods or similar MP3 players? How many of those kids even aspire to having a stereo set-up?
