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How Prime Day is creating a 'Halo effect'...for Amazon's competition

As Internet commerce soars, Amazon’s (AMZN) retail competitors may be positioned to see their best sales yet during Prime Day, according to a new analysis.

Amazon’s sales bonanza, which will take place next week, has forced brick-and-mortar retailers to adapt with sales of their own — but with decidedly mixed results. However, data from Adobe Analytics shows that big retailers are improving at leveraging Prime Day sales to boost their own traffic.

“The big e-commerce competitors are becoming better and better at reaping the benefits of this artificial holiday,” Adobe’s analysts noted. “Online retailers are seeing an increasingly strong ‘Halo effect’ on Prime Day.”

Adobe forecast a revenue boost of 79% for Amazon’s web retail competitors, and predicted Prime Day would top $2 billion in e-commerce spending — third behind Labor Day and Memorial Day in terms of retail spending.

With e-commerce on the rise—Adobe estimates the sector has gained 12.8% year over year in the first half and will continue to post double-digit gains — the rising tide may be enough to lift all retail boats.

“Over the past 3 years the big retailers have improved significantly how they convert the traffic on Prime Day,” according to the firm.

Yet much of those gains are concentrated among retailers with bigger-than-average growth, and therefore are able to leverage their retail presence into traffic boosts.

In fact, physical locations play a role in Prime Day shopping, which is a mostly online affair.

According to Adobe, consumers often utilize buy-online-pick-up-in-stores (BOPIS) for less expensive items that result in a smaller average order value. In addition, Prime Day brings BOPIS order values up closer to the online average.

In fact, BOPIS saw a record 65% increase in usage during the 2018 holiday shopping season (Nov. 1 to Dec. 31),” wrote Adobe analyst Giselle Abramovich.

Amazon has also moved to take advantage of the in-store- market, extending Whole Foods’ sales seven days last Prime Day. This year, Amazon is offering consumers $10 for Prime Day if they spend $10 at Whole Foods.

The proliferation of web shopping is also making the smartphone an integral part of the shopping experience. Adobe’s research found that about $1 in $3 is spent using a mobile device — which will become the primary way for checking out online sales by May 2022.

By then, smartphones will “account for more than 50% of revenue by the end of that year,” Adobe said.

More Prime Day coverage:

Donovan Russo is a writer for Yahoo Finance. Follow him @Donovanxrusso.

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