Your client has been running a retail shop for the past 20 years.

The first audience you need to build is the custom audience with the customer database. This audience will allow you to reach out to existing customers and run campaigns to the website. 

The second audience you need to build is a similar audience with the customer database. Since you have a 20,000 baseline, you should be able to build a really good similar audience optimized for similarity. 

Keep in mind that you are looking for quality over quantity in this particular case. You should select a 1% audience size. 

Choose an audience size close to 1 to optimize for similarity. Your Lookalike Audience will likely be small, with a high resemblance to your seed.

Choose an audience size close to 10 to optimize for reach. Your Lookalike Audience will be larger, but less similar to your seed.

There is a third, very important, step that still needs to be done. You need to use the similar audience you've just built and then re-segment that for the 10-mile radius. 

This new saved/core audience based on a similar audience should be your best option for reaching out to new potential customers.