Without marketing you're a dead duck and with low margins you can't afford to market. The idea that you lose money to gain customers who will eventually prove to be profitable seems like an untested concept. If you get them on price you can lose them on price and there will always to someone who will sell a little cheaper. The failure ratio on price cutters is always high. A company needs to husband capital, not spend money to generate losses.
Ingrained habits die slowly.
The excitement of shopping trips and entertainment at the mall can't be replaced by e-commerce. Furthermore, a lot of business is sold. Salesmen on the phone or in person cause business to happen. Without them those purchases would not occur. A lot of business is spur of the moment.