The margin is already there today, but it’s “under siege” by Amazon prices. My model would shrink it a bit
per item (getting closer to the Amazon one) and then recoup it
in aggregate by dramatically reducing local inventory while ensuring the same (or higher) amount of total sales. Basically you shrink costs while making it easier for customers to give you money.
Obviously you cannot stop people from going to Amazon anyway, but if you make it easy enough and convenient enough for customers to buy stuff right away (including ebooks, which currently are not sold in-stores at all), I think you have a good chance to compete.