Amazon has become the top apparel retailer in the US, overtaking Walmart, Target: report

Amazon has become the top apparel retailer in the United States as the coronavirus pandemic dramatically accelerated the shift from traditional retail to e-commerce, according to new data from Wells Fargo.

THE LABOR MOVEMENT TARGETS THE AMAZON AS A FOOT IN THE SOUTH

A group of retail analysts at the bank estimate the e-commerce giant’s U.S. sales of apparel and footwear, including third-party sellers, grew 15% in 2020 to $41 billion. The increase represents 11-12% of all clothing sold in the United States and 34-35% of all clothing sold online.

“While this was only a modest +15% increase, we believe overall apparel demand has been stifled by the pandemic,” analysts wrote in the report. “Amazon customers were more focused on ‘essential’ items and/or items that fit the new work-from-home environment.

Teleprinter Security Last Change Change %
AMZN AMAZON.COM INC. 3,268.16 -29.62 -0.90%
WMT WALMART INC. 141.95 -1.85 -1.29%

Still, the total is 20-25% higher than Walmart, which is the second-largest player in the U.S. apparel market, selling around $33-34 billion worth of softlines a year. Walmart recently announced that it has hired American fashion designer Brandon Maxwell as creative director for two of its house brands, Scoop and Free Assembly.

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The Wells Fargo report notes that only six other US players in the market sell $10 billion or more in softlines a year, including TJ Maxx, parent company TJX, Macy’s, Target, Kohl’s, Gap and Ross Stores.

Teleprinter Security Last Change Change %
TJX THE TJX COS. INC. 59.48 -1.65 -2.70%
M MACY’S INC. 25.73 -1.17 -4.35%
TGT TARGET CORP. 216.72 -6.05 -2.72%
KSS KOHL’S CORP. 60.73 -1.15 -1.86%
GPS GAP INC. 14.07 -0.72 -4.87%
ROST ROSS STORES INC. 89.74 -1.94 -2.12%

Looking ahead, Wells Fargo analysts predict Amazon will grow its softlines business at a “fairly modest +10% rate,” selling more than $45 billion worth of apparel and footwear in 2021. Gross Merchandise Value Amazon’s U.S. apparel and footwear business is expected to grow to over $4 billion in 2021.

However, Wells Fargo expects online sales to remain flat in 2021 as consumers return to shop in stores as distribution of the COVID-19 vaccine ramps up. As a result, the share of softlines sold online is expected to decline to around 34%, but still above the pre-COVD level of 25%.

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While brick-and-mortar retailers have always viewed Amazon as a competitive threat, Wells Fargo analysts say there has been a surge in partnerships on the platform.

“Many vendors are partnering with Amazon to establish a comprehensive brand presentation on the site, with assortments that minimally compete with existing channels,” the analysts wrote. “Perhaps, most importantly, partnering with Amazon allows brands to better monitor third-party distribution on the site and retain control of their brand image/equity.”

Examples include Haines Brands, PVH Corp., VF Corp., Skechers, Steve Madden, and Carter’s Inc., which created a brand, Simple Joys, specifically for Amazon.

Teleprinter Security Last Change Change %
HBI HANE BRANDS INC. 14.89 -0.51 -3.31%
HPV PVH CORP. 80.18 -1.36 -1.67%
VFC VF CORP. 55.65 -1.06 -1.88%
RL RALPH LAUREN CORP. 116.37 -0.91 -0.78%
IRC CARTER’S INC. 93.14 -2.20 -2.31%
SKX SKECHERS USA INC. 39.81 -1.53 -3.70%
SHOO STEVEN MADDEN LTD. 39.32 -1.00 -2.48%

Amazon launched its “Luxury Stores” section in September, luring Oscar de la Renta as the first luxury brand on the platform. Additionally, the company has more than 100 private label clothing brands on its website.

The company also launched Prime Wardrobe in 2017, which offers a “try before you buy” model for Prime members, including name brands like Calvin Klein, Levi’s and Adidas. In July 2019, the company launched a Personal Shopper service for $4.99/month in addition to an Amazon Prime membership, focusing on convenience and giving shoppers a stylist who provides personalized recommendations.

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Overall, Amazon’s gross merchandise value in the United States in 2020, excluding Whole Foods Market, was $290 billion, a 22% year-over-year increase.

“Given that Amazon’s addressable market (as we define it) grew by $180 billion, that means Amazon accounted for about 50% of market sales growth in 2020,” the analysts added. . “This is the 21st consecutive quarter that AMZN’s growth share exceeds 20%, demonstrating just how dominant AMZN is becoming in the retail landscape.”

An Amazon spokesperson did not immediately return FOX Business’ request for comment on the Wells Fargo report.

Anne G. Cash