Amazon.com Set to Become America’s Leading Clothing Retailer in 2017

Amazon.com Set To Become America's Top Clothing Retailer 

The results of a new report done by Cowen and Co. indicate that Amazon.com will surpass Macy's as the country’s top clothing retailer in 2017.

A Major Milestone For Amazon.com and eCommerce

This marks a major milestone for Amazon.com and eCommerce. Brick and mortar based stores like Macy's, Nordstrom and JCPenny have dominated the industry up to this point. This change in the hierarchy of clothing retail has been long in the making. Over the past couple years, Amazon.com has poured millions of dollars investing in its hold of the fashion industry. It has launched it's own private label clothing brands and even sponsored New York Men's Fashion Week.

The Numbers

According to the report, Amazon.com's sales are expected to grow around 30% in the next year to $28 Billion while Macy's sales are expected to drop 4% to $22 Billion over the next year. With sales growth comes market share growth. Amazon.com currently holds 6.6% of the market which is expected to increase to 8.2% by next year. Look forward 5 years and that 8.2% is expected to increase to 16.2%. In 2021 Cowen and Co. states that Amazon.com will do $62 billion in annual apparel sales alone.

The Problem of Buy Before You Try

But Amazon.com doesn't have an outright advantage on brick and mortar and private channel luxury brands. Customers who buy apparel on Amazon.com obviously cannot try on clothing before they buy it. However, the convenience of Amazon.com Prime's two-day shipping and Amazon.com's simple return policies often outweigh the inconvenience of "buy before you try" since returns are as easy as mailing your purchase back. It will be interesting to see how Amazon.com handles an influx of returned items as their apparel sales increase.

Luxury On Amazon.com

Another issue is that Amazon.com's site isn't as highly curated as many luxury eCommerce sites and their products aren't as well merchandised. This is an issue that Amazon.com can potentially solve with custom design, pages, and interface for their luxury brand apparel. But these aesthetic issues will not prevent Amazon.com's customers from buying these items on their marketplace. Amazon.com's success is based on its shopping experience convenience and great customer service reputation which stems from the fact that Amazon.com always puts its customers first.

source: Chen, Oliver, CFA. "Cowen Co Group." Cowen Group. N.p., 24 Oct. 2016. Web.