@westcoast: what you described is exactly what we're seeing. We're an e-commerce with over 20 years online, and we always follow the rules and get no where. Every time we do what Google says, Google traffic drops. Every time we do nothing, Google traffic drop.
The problem (probably) isn't your site but with Google. We switched to https everywhere, invested in full responsive design, got our pages to load in 55ms and made a much better looking and higher converting design. Conversion rate doubled, Bing traffic doubled, Google traffic plummeted the day after the new site was launched by 45%. And for over a year since that launch our Google traffic is consistently down 45% month over month. There were no technical mistakes in the implementation.
Before that, we updated all of our site descriptions. A real person actually TRIED the thousands of items we carry (this process took years!) and we hand wrote thousands of unique, detailed and useful descriptions. No improvement.
We had tons of spammy links pointed at us by someone. It's obviously spam and it's still constantly being built, about five links per week. We went through Majestic, hrefs, and the GWMT reports and disavowed all the junk in May. Every week, I add and update new disavow files. No change in ranking until this September, where, our actual keyword positions have not changed, but converting traffic seems to be turned off. We should have recovered.
But then, all of the other improvements we've done at Google's behest over the years should have gained us something too. We're the best looking and easiest to use site in our niche. We meet all of Google's guidelines. There are only five competitors (and that includes "no-service Amazon" and "we-don't-actually-carry-it Walmart"), so we should be, at the very least, #5. But for many of these words though, we're in the #40 - #70 range. And if you go, page by page through Google results, you will see that after page one, it's just irrelevant junk for 6 pages, then finally there we are. For example, if our page was "Tennis Rackets" and someone typed in "Tennis Rackets", we would be #70 and you would get gems like, "kitten humps tennis racket" (youtube), and random news articles about Clinton and Trump and pretty much 50 random pages from Google's index in between the real competitors and us.
So at this point, I'm calling for a vote of no confidence in Google. They are either incompetent or malignant and it doesn't really matter which. I'm going to give Penguin/Google a few more weeks to see if ANYONE is recovering, and if not, then I'm going black hat because it works. Totally serious by the way. Why would I follow Google's guidelines to avoid a penalty when following their guidelines results in nothing at best and a demotion at worst? Our competitor makes over $50mil a year running a site that's built on paid links, do-follow affiliates and spam. They rank #1 or #2 for almost everything.