Report reveals 30 percent annual growth in FY17 of clothing sales at Amazon
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A new report from Cowen&Co indicates that Amazon is expected to surpass Macy's to become the biggest apparel seller in the US next year, leaving behind former US sales champions such as Kohl's, JC Penney, and Macy’s.
In related news, Morgan Stanley forecasts Amazon will account for roughly 17 percent of the US apparel market by 2020, selling around 51 billion dollars’ worth of clothing items per year.
A recent survey conducted by Morgan Stanley suggests Amazon's fashion business is quickly growing in popularity while eating into the market traditionally owned by the likes of Macy's and JC Penney.
"These data points continue to support our thesis that Amazon is quickly gaining consumer traction in apparel at the expense of department stores and select special retailers," Morgan Stanley wrote in the note Tuesday.
The survey, which polled 2,000 US teens and adults, says 58 percent of the respondents shopped at Amazon in the past six months, making it the most popular apparel retailer in the country. Kohl’s follows up with 37 percent of the votes, with JC Penney (33percent), and Macy's (27 percent.)
‘Business Insider’ highlights that the three retailers also saw the biggest declines in year-over-year purchasing activity, which nothing but strengthens the market’s sentiment regarding a huge shake-up for the apparel industry, which has long been dominated by department stores like Macy's, Nordstrom, and JCPenney, as well as big-box retailers including Walmart and Target.
Amazon’s fashion sales expected to grow to 28 billion dollars this year
The company's clothing and accessory sales are expected to grow nearly 30 percent next year, to 28 billion dollars, according to the Cowen analysts. Macy's apparel sales, by comparison, are expected to drop 4 percent, to $22 billion, in the period.
And, as Amazon's sales grow, so will its share of the apparel market in the US. The online department store currently owns about 6.6 percent of the market. That share is expected to increase to 8.2 percent by next year and further expand to 16.2 percent within five years, according to Cowen analysts.
By 2021, Cowen expects Amazon to generate 62 billion dollars in annual apparel sales, compared to TJ Maxx’s expected sales of 26 billion dollars, and Macy's forecast of 23 billion dollars in sales.
Over the past couple of years, Amazon has improved its fashion profile by launching its own private-label clothing brands and sponsoring the first New York men's fashion week. The hire of executives from luxury fashion companies, such as former Barneys NYC’s fashion director Julie Gilhart, and Vogue editor Caroline Palmer are also understand to be part of the company’s shift towards conquering the fashion scene in the US.
This shift has taken the industry by storm, as Amazon is not known precisely because of its curation. However, customers praise Amazon Prime, highlighting the convenience and free two-day shipping as the biggest advantage of shopping for clothes on Amazon. They also praised Amazon's customer service and product reviews.
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