Clothing is fast becoming one of the hottest growth categories online, along with a recent report shows that will mean big sales for Amazon.com Inc., enough to unseat department store Macy\’s Inc. as the top U.S. apparel retailer by 2017.
The prediction comes just weeks after the web retailing giant started selling clothing and footwear online in Canada – two of the few categories the Canadian site had not yet imported from the U.S. site.
Although online apparel shopping in Canada is in its infancy, it’s very likely that Amazon\’s momentum in The united states will spur further retail industry consolidation, mergers and acquisitions and bricks-and-mortar store closures, analyst John Blackledge at Cowen and Co. said in the research report.
\”While Nike, Under Armour and other global brands should benefit, \’middle of the mall\’ retailers are in most risk near-term, with longer-term risks to department stores and broadlines,\” the report cautioned.
\”We see non-differentiated retailers at greatest risk,\” it added, referring to retail companies selling a broad swath of merchandise in multiple categories -?Wal-Mart Stores Inc. and Target Corp. in particular.
The firm cites its proprietary survey data being an indicator that Amazon’s apparel sales are growing dramatically as it increases its selection of top brands and improves fulfilment capabilities.
Traditional retailers, meanwhile, face the chance of greater price transparency driving down their merchandise margins and Amazon\’s speedy distribution.
\”As Amazon expands, the biggest risk most of the global vendors face is maintaining uniform pricing and brand equity on Amazon\’s website,” the report said. “The goal of many of the global vendors is to maintain a full-price selling environment within the wholesale channel.\”
Cowen estimates Amazon\’s U.S. apparel business will soar to some gross merchandise worth of US$52 billion in 2020 from US$16 billion this season. That implies its share of the market in U.S. apparel and accessories will rise to 14 percent from a current degree of five percent, and displace Macy\’s as the top U.S. apparel retailer by 2017.