How do I let customers pick up orders from my shop?

Use Click & Collect.

1. Make sure the Click & Collect plugin is active (Plugins).
2. Open Inventory → Store Locations (or click Manage store locations on the Click & Collect plugin page) and turn on Pickup point for the store. Store Locations is part of the Inventory module, which is included on higher plans only; if you don't see Inventory in your menu, upgrade your plan first.
3. That store now appears in the pickup picker at checkout. The shopper pays no shipping and skips the delivery address.
4. When the order is packed, set its status to Ready for Pickup, then Collected on handover. If you use the Push Notifications plugin, signed-in customers get a "ready to collect" alert.