I would like to offer an insider's (who saw the writing on the wall) view on some things mentioned.
The internet was a very, very little part and only so much as the general (or percieved) lower prices on the same goods was concerned , and in this regard the Big(er) Box stores were a much, much larger problem.
Advertising and targeting to a segment of the market that is shopping on price and treating these goods as commodities is ultimately only successful if you are going to be the cheapest on the same gear or offer cheaper gear, Tweeter did neither.
Trying to sell install services to these same people who can either barely pay for the equipment itself, or who are so cheap that they'll give up three weeks of evenings to get everything set-up right, or to the hobbyist who believes that they are ultimately going to do a better job than a Tweeter installer, is also a non winning strategy.
Doing a better job of showcasing cheaper product categories (ie; power-point front projectors) is also a loosing proposition, fortunately , this they didn't do.
There are a whole category of tv buyers who are looking for biggest for cheapest (or nearly so) and this has been true since rear projections started apperaring many, many years ago , the differance is that setting up a $2k projector (or any front projector) as opposed to other displays and getting it to look right requires time, money, effort, and a little expertise so the more your store cuts costs and services, the harder that would be to do. Also, the effort put into such a thing for such a small market segment who are looking at such low dollar AND low margin products is not worth the few dollars you MIGHT make , even in the unlikely event that these people want installation and anything approaching hi quality audio (which , again , isn't likely).
Even at Tweeter , years ago when people would come in and ask why we didn't have a slew of square footage and dedicated rooms allocated to these low return sales, we would explain that cheaper commodity items sell themselves (based on numbers and price) while higher quality products need to be shown looking good to demonstrate the better picture and justify the higher price.
This is still the way it is in Boutique stores, the differance being that some will let customers bring in and set-up their own less expensive projectors for comparison purposes.
To date there have only been a VERY few places around the country that has tried to target the "Low Price front projector w/mid-low-fi audio , cheap seats, cheap screen" and from what I know of them, they are failing at it, as , again, this customer is using them to get an idea of what it will look and sound like (demoing station) and then getting a shopping list to take to CompUsa , BB, etc....Even when they are sold their instal teams are not able to generate enough profit (at street prices for instal) to make up for the low dollar, low margin product sales.
Tweeters only hope , years ago, would have been to take the Pro buying Group chiefs around to all the manufacturers of slightly step-up products and say that there will come a day when you all (manufacturers) will realize that without demo facilities your product will get lumped in with all the other commodity goods to be sold on price as no one can show or explain the need to spend more on your stuff than stuff made by Matel , and that Tweeter (and the other members ) would only carry product not available in places that couldn't properly showcase product (Walmart, CompUsa , and on-line would have to be cut-off). The stupidity in not taking that strategy (as many independants have since been doing) has garaunteed that Tweeter would be selling commodity goods and providing slightly better sales staff , slightly better demoing rooms, and at slightly higher (at least perceived) prices.