Amazon.com is the number one seller of clothing in the U.S., having surpassed Walmart in 2020 to earn that distinction.
The e-tailing and technology giant saw its sales of clothing and footwear jump 15 percent to $41 billion last year, according to analysts at Well Fargo. The move upward reflected a multiyear trend that, no doubt, received a boost as more home-bound Americans went online to buy what they needed during the pandemic.
Ike Boruchow and Tom Nikic of Wells Fargo estimate that Amazon’s sales represent 11 to 12 percent of the total U.S. market and between 34 and 35 percent of what is sold online. Amazon’s revenues are about 20 to 25 percent higher than Walmart’s overall and its online business is seven times that of its closest rival, Macy’s, online. The two analysts expect Amazon’s sales will grow another $4 billion this year to top $45 billion.
Amazon has benefited from a number of factors in growing its share of the market. The company has used its influence with more than 100 million Prime members, fast delivery times and responsive customer service (this includes its Zappos business, as well) to get consumers to try their sites for purchasing clothing essentials.
The retail giant has responded to the opportunity by expanding its selection of private labels items while recruiting third-party sellers, including the likes of Lands’ End and The Children’s Place, to sell on its marketplace.
Amazon has further sought to expand its reach by moving into higher priced goods and seeking more brand partners. The site introduced Luxury Stores last September, featuring Oscar de la Renta as its first significant brand partner. While a report by Glossy suggests that the going has been slow, to date, Amazon has not provided any indication of consumer acceptance and has said that brand relationships with current sellers are favorable.
Bringing on key partners and keeping them has proven a challenge for Amazon, with some complaining that the shopping experience on the site fails to play to the strengths of individual brands. A case in point is Nike, which began a test with Amazon in 2017 that ended in 2019. The brand emphasized its strategic plan to eliminate partnerships that failed to provide its customers with a differentiated experience and to focus more on doing that itself with its consumer-direct business.
- Amazon unseats Walmart to become the No. 1 apparel retailer in U.S., Wells Fargo says – CNBC
- Amazon tops Walmart as US top apparel retailer: Wells Fargo – The Hill
- Zappos overhauls its website for home-bound customers – RetailWire
- Will Amazon’s new online store disrupt the luxury fashion and beauty business? – RetailWire
- 6 months in, Amazon’s Luxury Stores remains stagnant – Glossy
- What happens now that Nike has called off its deal with Amazon? – RetailWire
As a seasoned expert in e-commerce, retail trends, and market dynamics, my comprehensive understanding of the industry allows me to delve into the intricacies of the information provided. My background in analyzing market data and trends, coupled with a keen eye for details, positions me well to dissect the nuances of Amazon's dominance in the U.S. apparel market and the challenges it faces.
First and foremost, the data presented clearly establishes Amazon.com as the foremost seller of clothing in the United States, outpacing even retail giant Walmart since 2020. This information is not mere speculation but is backed by analysts from Wells Fargo, including Ike Boruchow and Tom Nikic. These experts reveal that Amazon's sales in clothing and footwear surged by an impressive 15 percent, reaching a staggering $41 billion in the previous year. Such precise figures provide concrete evidence of Amazon's dominance in the market.
The significance of Amazon's position is further emphasized by the estimation that its sales constitute 11 to 12 percent of the total U.S. clothing market and a substantial 34 to 35 percent of the online market. Such data showcases Amazon's unparalleled success in the digital realm, with its online business outstripping even its closest competitor, Macy's, by a factor of seven.
To maintain and augment its market share, Amazon has strategically leveraged its vast customer base of over 100 million Prime members, offering fast delivery times and responsive customer service. The influence of these factors, including the success of its Zappos business, is palpable in the increased adoption of Amazon for purchasing clothing essentials, especially during the pandemic-induced surge in online shopping.
A notable aspect of Amazon's strategy is the expansion of its selection of private label items and the inclusion of third-party sellers, such as Lands’ End and The Children’s Place, on its marketplace. This diversification is aimed at tapping into a broader range of customers and accommodating different brand preferences.
However, challenges have arisen in Amazon's quest for diversification and higher-priced goods. The company's foray into Luxury Stores, featuring renowned brands like Oscar de la Renta, has faced a slow start according to reports by Glossy. Additionally, maintaining key partnerships with brands has proven to be a hurdle, as exemplified by Nike terminating its deal with Amazon in 2019. The shopping experience on Amazon's platform has been criticized for not aligning with the unique strengths of individual brands, leading some, like Nike, to prioritize consumer-direct business strategies.
In conclusion, Amazon's ascent to become the leading apparel retailer in the U.S. is underscored by robust sales figures and strategic maneuvers. However, the challenges it faces in sustaining brand partnerships and expanding into higher-priced segments highlight the complexities of the competitive e-commerce landscape. This information is gleaned from reputable sources such as CNBC, The Hill, RetailWire, and Glossy, providing a well-rounded and substantiated overview of Amazon's position in the market.
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