local delivery set up

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Right now we use a third party app for local delivery and in store pick up. It works fine, just costs $30 a month. So I'm looking at switching to Shopifys new built in system to do this. 

We have a store front as well as ship through out store. Which means, we have some items that are large and we don't offer them to for shipping, just local delivery. They show up on our website, they are tagged for local only, and if someone out of area tries to buy it, it only gives them the option of local pick up or delivery. Our current app has a feature where we put in a tag of "pick up only" to make this function work.

My question, how do I do this with the built in Shopify app? I want items listed on our webstore that can only be for local delivery or pick up, people can't check out and have them shipped.

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