Nov 29, 2016 ยท 5 minutes

Black Friday is finally suffering the long, slow death it deserves.

Once known as “the day after Thanksgiving,” Black Friday took off as a commercial holiday around 2003. That was when department stores and big retail chains, awakening from their denial about the threat of a nine-year-old company named Amazon, began offering deep discounts to drum up more holiday sales. After that, Black Friday was consistently the busiest shopping day of the year.

Black Friday may have saved many shoppers a few hundred dollars each year, but it quickly became the worst of holidays, appealing to some of the less savory instincts of human nature. Part of the Black Friday ritual included yearly viral videos of people exhibiting the opposite behavior that the holidays were meant to celebrate.

Now the tide is turning. On Sunday, the National Retail Federation released its annual press release of spurious, gently massaged numbers from Black Friday weekend sales. But the bad news was hard to conceal. Shoppers spent an average of $289 during the long Thanksgiving weekend, down 3.5% from last year.

And that's only part of the story. Go back and look at previous releases, and it's clear that average spending has declined 32% from the 2012 figure of $423 per shopper. Back then, total spending over the four-day weekend reached $59 billion. This year, spending by 154 million shoppers totaled around $45 billion. The trade group's president tried to put the best spin on this deterioration, saying, “It was a strong weekend for retailers.”

That's understating the reality. The slower sales at retail stores suggests that consumers, perhaps uncertain about their economic futures under a Trump Administration, were holding back. Evidence suggests the exact opposite. The Michigan Consumer Sentiment Index, conducted after the election, came in at 93.8, up from 87.2 in October (and up from 85.0 right before the election). The average figure for a non-recessionary economy is 87.6.

“The initial reaction of consumers to Trump's victory was to express greater optimism about their personal finances as well as improved prospects for the national economy,” said Richard Curtin, chief economist of University of Michigan's consumer surveys.

So why, if consumers are feeling more confident (for now), aren't they rushing to retail stores on Thanksgiving weekend? One reason may be the surge in travel this weekend, with a record 49 million Americans traveling. But the big reason is the one retailers have feared for decades: ecommerce in general and Amazon in particular.

Spending on online transactions totaled $1.9 billion on Thanksgiving and $3.34 billion on Black Friday, according to Adobe, whose marketing cloud technology allows it to track 80% of online transactions from top retailers. That marks an 18% gain over last year and a near tripling of Black Friday ecommerce since 2012. Average online order value was about $160.

That accounts for some of the slowdown in Black Friday traffic at big retailers, but not all of it. There are just too many alternatives to the rock 'em-sock 'em frenzies at your local Wal-Mart, starting with Cyber Monday, which brought in another $3.4 billion in online sales, Adobe said. Amazon upped the ante by offering daily deals that began in early November and will continue through Dec. 22. Many traditional retailers have started stretching out their own deals beyond Black Friday, further weakening its appeal.

This is a subtle move on Amazon's part, more ingenious and probably more damaging than simply offering its own Black Friday deals. Aggressive discounts on the day after Thanksgiving created the monster that became Black Friday. Amazon is using the same strategy, only on more and more days, effectively retraining the consumer hunting for bargains to sniff away from big retailers.

And it's working, not only has Black Friday sales slowed dramatically in four years but, according to a survey by Bankrate, the portion of shoppers who planned to shop in stores last Friday fell to 23% this year from 28% two years ago. A decade ago, according to Customer Growth Partners, Black Friday accounted for 6% of holiday-season spending. Now it's only 4.3%.

Anecdotal evidence weekend underscores the trend. Patrick McKeever, a retail analyst at MKM Partners, said in a report this weekend,

We visited stores last night and this morning and came away generally underwhelmed, as Thanksgiving evening store traffic at our biggest “Black Friday” players, Walmart, Target and Kohl’s, looked down vs. last year (ballpark estimate would be 15%-20%), and Black Friday morning seemed like a complete dud, with an overall feel more like a typical weekend day (handful of registers open, short lines), not a big-time sales event.

That doesn't mean that retailers not named Amazon will necessarily have a bad holiday season. It means that they can't rely on Black Friday anymore, and that if they are going to try to fight the slow, steady onslaught by Amazon – which is executing a game plan it drew up a good while ago – they are going to have to get creative and aggressive, offering deeper discounts for a longer period of time.

There are some who think even that won't be enough, that the long game Amazon has been playing and will play for some time is only starting to cause pain for traditional retailers. On Bloomberg TV, retail analyst Howard Davidowitz explained it this way,

We're in a battle for market share. In America we have three times the amount of square foot per person than any other country. Three times more than England, three times more than Japan, three times more than Canada. We are dramatically over-stored and that's why we're going to close tens of thousands more stores... Everyone sells the same thing. Guess what? The only difference is price. Of course! If the only difference is price, where do you go? The price goes down. The is not rocket science. So retailers in a very tough space.

This isn't a new story. Amazon's backers were predicting this scenario even during the company's darker days in the early 2000s. Traditional retailers came up with some gimmicks, like Black Friday, to stave off the Amazon attack. Now even those tricks aren't working anymore.