Dive Brief:

• Amazon is shutting down Amazon Local, its daily-deal site, and its mobile credit-card processing unit, Local Register, the Wall Street Journal reports. 
• Amazon will stop selling deals via the website and the Amazon Local mobile app on December 18, according to a message on the site’s home page first spotted by Geekwire. Deals already purchased on the site will still be honored.  
• Local Register, a once-competitor with Square, will shut down Feb. 1 and has stopped taking new customers. 

Dive Insight:

Amazon’s news reflects the latest retreat from the once-hot daily-deal model that has now fizzled. These group-buying sites, which took off after The Great Recession, offer shoppers coupons worth about half the regular price of local retailers, products, and services. But over time, the model has proven to be a flawed one — particularly with the proliferation of discounts available to shoppers online. The daily-deal sites negotiated with businesses to arrange these deals, which turned out to be an expensive proposition marketing and manpower wise, and one difficult to wring a profit from, according to the Atlantic.

This month, LivingSocial (owned by Amazon), eliminated 20% of its staff, reflecting its move away from daily deals to an “experience marketplace.”

And last month, Groupon, once the leader the in the space, set plans to lay off 1,100 employees as it works to rebalance its model from a daily-deal site to one built more broadly on local commerce.

And while Amazon is the uncontested behemoth in online retailing, it was never the leader in daily deal space.

“Amazon's daily deals service, originally launched in 2011, has struggled to compete against market leader Groupon, and has also had to contend with a sluggish deals market in general,” according to Seeking Alpha.