Chart: Amazon Prime Day depresses retailer foot traffic

Senior Writer
Yahoo Finance

Amazon Prime Day is rattling foot traffic at brick and mortar businesses, making the event a microcosm of the Amazon (AMZN) narrative at large.

The week of last year’s Prime Day was the lowest foot-traffic week for the retail industry during the entire summer, according to new data from Foursquare. The company used its location intelligence technology to analyze visits to physical stores the week of Prime Day 2017 as well as the week after.

Amazon Prime Day (Foursquare)
Amazon Prime Day (Foursquare)
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Foursquare compared the foot traffic the week of July 10 with that of the average summer week in 2017, excluding July 4. (Foursquare editor-at-large Sarah Spagnolo calls the week of Independence Day an anomaly because there is a spike in last minute shopping for the holiday.)

All major retail categories — including department stores, big box, clothing, discount, and electronics — had significantly fewer shoppers perusing their stores.

Physical retail did see some recovery the week following Prime, though the self-created holiday still dragged down foot traffic.

Physical stores still account for 90% of total sales

While e-commerce is driving the retail industry’s growth, Americans still do the majority of their shopping in stores. While e-commerce is certainly driving growth in the overall retail sector, physical stores still account for 90.5% of total sales, according to the Census Bureau.

This makes Prime Day’s impact on brick-and-mortar retailers even more impressive.

In order to offset the negative effect Prime Day has on in-store visits, many retailers have been offering online-only deals in an attempt to capture some of Amazon’s clicks. Physical retailers like Walmart, Macy’s, and Nordstrom are finding opportunistic ways to offer free shipping and “Christmas in July” deals. As the adage goes, if you can’t beat them, join them.

With the fourth annual Prime Day kicking off on July 16 at 3 p.m. ET, Foursquare’s Spagnolo anticipates that the e-commerce behemoth will put a damper on physical shopping once again.

“We’d guess that Amazon continues to be successful at driving shoppers online. Deep discounts and convenience seem to beat out brand loyalty and experiential shopping—and thus, Prime Day does the job.”

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Melody Hahm is a senior writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm.

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