Amazon is America’s largest clothing retailer and there’s no second – RetailWire
March 18, 2021
Amazon.com is the number one clothing seller in the United States, having overtaken Walmart in 2020 to earn this accolade.
The e-commerce and tech giant saw its clothing and footwear sales jump 15% to $ 41 billion last year, according to analysts in Well Fargo. The upward movement reflected a multi-year trend that, no doubt, has received a boost as more Americans confined to their homes have logged in to buy what they need during the pandemic.
Wells Fargo’s Ike Boruchow and Tom Nikic estimate that Amazon sales represent 11 to 12 percent of the total US market and between 34 and 35 percent of what is sold online. Amazon’s revenue is around 20-25% higher than Walmart’s overall, and its online business is seven times that of its closest rival, Macy’s, online. Both analysts expect Amazon sales to grow another $ 4 billion this year to $ 45 billion.
Amazon has benefited from a number of factors to increase its market share. The company has used its influence with over 100 million Prime members, fast delivery times and responsive customer service (this includes its Zappos business, as well) to get consumers to try their essential clothing shopping sites.
The retail giant has responded to this opportunity by expanding its selection of private label items while recruiting third-party sellers, including Lands’ End and The Children’s Place, to sell in its market.
Amazon has further sought to expand its reach by turning to more expensive products and seeking more brand partners. The site introduced Luxury boutiques last September, with Oscar de la Renta as an important first brand partner. While a report of Shiny suggests that things have been slow, to date Amazon has not provided any indication of consumer acceptance and said the brand’s relationships with current sellers are favorable.
Bringing in and retaining key partners has proven to be a challenge for Amazon, with some complaining that the shopping experience on the site fails to leverage 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 focused on its strategic plan to eliminate partnerships that fail to provide its customers with a differentiated experience and focus more on doing it itself with its direct consumer activities.
DISCUSSION QUESTIONS: What do you think are the main factors supporting Amazon’s growth in clothing and footwear sales? What will Amazon need to improve and add in the coming years to maintain its leadership position and further increase its market share?
“The most important factor is simple. Convenience, convenience, convenience.”
“Despite the dedicated branded stores, Amazon still has room to improve the experience for premium brand partners.”
“That makes Amazon ‘the American mall’, not the leading clothing retailer. I think that’s an important distinction.”