Here are some ideas to add some more services to these shops other than the usual buy/sell/repair
Craft: this would require the creation of a new item (ore) which can be found while looting dungeons or killing enemies. If you have a piece of ore, you can ask to forge a weapon or piece of armor you want (for a cost of course). The kind of ore that a smith is able to craft depends on the quality of the shop (eg poor quality ones are able to craft iron, steel and silver, while high quality ones are able to craft even dwarwish or orcish)
Special treatments: with this a smith can make a weapon or armor piece fire/Ice/shock resistant or add some damage benefit
Paint: this would allow the player to choose a motif to be painted on shield or curiass
Rumors: if any of those could be implemented the NPCs of a city can sometimes give hints to the player, like "You know, <name of the smith> in <name of the shop> is able to craft dwarwen weapons"