The rush of publicity and expectations surrounding Amazon's   (AMZN - Get Report)  second-ever Prime Day appeared to be lifting the entire e-commerce sector Tuesday, but longer-term, the pressure will no doubt be on Amazon's rivals to keep up.  

Jeff Bezos' e-commerce empire kicked off Prime Day at midnight Pacific Time on Tuesday, boasting about offering over 100,000 deals in 10 countries and more than doubling the number of participating sellers from last year. 

Shares of Amazon briefly hit an all-time high on Tuesday morning, before slipping 1.5% Tuesday afternoon to $742.21.

Amazon's Prime Day may be having a positive effect on the e-commerce sector as it underscores the growing shift to online shopping, Edward Jones analyst Josh Olson said. Shares of online craft marketplace Etsy (ETSY - Get Report) were up about 8% to $10.44 and e-commerce enabler Shopify (SHOP - Get Report) were up 3.3% to $32.89 on Tuesday afternoon, apparently on general enthusiasm for online shopping as a result of Prime Day. 

But on the flip side, Amazon's Prime Day success could force the hands of both traditional retailers and e-commerce players to be more aggressive on pricing.

Brick-and-mortar retailers such as Wal-Mart Stores (WMT - Get Report) and Gap (GPS - Get Report)  are offering their own deals and shipping promotions this week as a response to Amazon's Prime Day. And especially as Amazon increasingly moves into apparel, mall-based retailers such as Abercrombie & Fitch (ANF - Get Report) will have to be prepared for the competition.

The e-commerce giant is also targeting small business sellers by making it easier for them to sell products on Amazon, said Morningstar analyst RJ Hottovy.

This could eventually pose a big threat to eBay (EBAY - Get Report) , which counts on small business sellers as a significant portion of its seller base, Hottovy said.

On Tuesday afternoon, shares of eBay were trading up 0.9% to $25.09 as Robert W. Baird reiterated its "outperform" rating and $30 price target on the stock. The company also announced on Monday that it had acquired Israeli-based AI firm SalesPredict to help with its machine learning and data science efforts.

While eBay has largely under-performed since spinning off PayPal Holdings (PYPL - Get Report) , it could eventually look to introduce a promotional initiative resembling Prime Day to spark some much-needed excitement around the business. 

Chinese e-commerce giant Alibaba (BABA - Get Report) turned Singles Day -- an anti-Valentine's Day held every year on Nov. 11 in China -- into a huge commercial event in 2009. Last year, it generated $14.3 billion in gross merchandise volume on the holiday.

Etsy (ETSY - Get Report) , too, could adopt an initiative such as Prime Day or Singles Day, but the company may not be able to ring in a huge volume of business due to its more niche focus on vintage and craft products.

At the same time, it's still hard to fully quantify Prime Day's halo effect, said Needham & Co. analyst Kerry Rice, while acknowledging that at the core of the initiative is Amazon's goal to increase its Prime membership.

"Prime members are really more engaged with the company," Rice said.

Amazon held its first Prime Day in 2015 to celebrate its 20th anniversary, and was estimated to bring in $375 million to $400 million of additional sales last year. Analysts are expecting the company to haul in as much as double that amount of revenues this year as it receives additional publicity and ratchets up the number of deals offered.  

Still, Amazon's 2015 Prime Day was hit with some criticism from consumers complaining about the product selection. And earlier on Tuesday, Amazon tweeted that it was addressing checkout issues some customers reported.

But Prime Day is still expected to be a big boon for Amazon. 

"Not only does it pull in business for Amazon, it takes away from other players," said Wedbush Securities analyst Gil Luria, adding that other e-commerce players across the board have a disadvantage on Prime Day.

"Anybody that sells online today will be out-shined by what Amazon is doing," Luria further said. "I think Amazon is very careful in how it promotes and engages its customers year-round."

And despite trading at near record levels, Amazon may still have more room to run up.

"I see Amazon as being not inexpensive," said Jim Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio. "[Its] market cap can get bigger because there's still a lot of growth ahead."