Amazon Is Poised to Dominate Yet Another Arena: US Fashion Retailing

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Amazon Fashion women

As if Walmart, Target and Macy’s didn’t have enough reasons to hate Amazon, here’s yet another big one: Within a couple of years, it looks as though Amazon will become the No. 1 US apparel retailer, surpassing all those bricks-and-mortar operations.

Amazon is due to report its quarterly earnings soon, and a team of analysts at the Cowen securities firm is teeing up the company’s report by predicting that Amazon will “comfortably” pass Macy’s to the No. 1 spot within two years. Amazon’s gross value of its apparel sold in the US is estimated to hit $52 billion in 2020, from $16 billion this year, and its US market share is expected to rise to 14 percent, from 5 percent.

Amazon

“The company’s apparel and accessories footprint has come a long way since it first began selling apparel,” said Cowen analyst John Blackledge, according to Bloomberg. “Numerous comments suggest fashion is now the fastest-growing vertical within Amazon’s largest revenue source”—the electronics and general merchandise segment. Blackledge also noted that Amazon Fashion President Cathy Beaudoin disclosed that Amazon Fashion has more than 40 million customers.

According to a Cowen survey, Amazon’s apparel-purchase growth has averaged a 29 percent increase year-over-year for the past six quarters, compared with declines of 3 percent and 2 percent at Walmart and Target, respectively.

Amazon

Besides the multifaceted prowess that Amazon displays across its businesses, one specific tactic that seems to be helping is that Amazon has changed its mind about becoming a luxury apparel retailer. Instead, Amazon has secured partnerships with mid-tier brands such as Lacoste and Theory.

“What we are focused on is developing an experience for our large customer base,” Jennie Perry, chief marketing officer for the fashion division, told Business of Fashion. “That customer seems to have a great appetite for many things.”

Indeed, Amazon has been busily courting apparel retailers. In 2012 it set up a warehouse for photography in the trendy Williamsburg neighborhood in Brooklyn. And it has opened a photography studio in London to support its fashion business, calling it one of the largest of its kind in Europe.

The retailer also continues to find ways to market its growing domination of fashion. It tapped The Daily Show star Samantha Bee for a short video for the upcoming first-ever Men’s New York Fashion Week, in which she engages male fashion models as dim-witted sex objects as part of her examination of “The Plight of the Male Model.”

Having Bee in its corner may goose Amazon’s apparel business and brand at the margins, but either day, this is one fashion juggernaut that seems unstoppable anyway.

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