Amazon.com, Inc. (NASDAQ:AMZN), which is already the biggest online clothing store, appears to be bullish on brick and motor business. According to a report in Bloomberg, Amazon could create problems for its brick-and-mortar rivals in fashion industry. The company might soon overtake most of those rivals in fashion sales, the report said.
Amazon is biggest seller of clothes online
Amazon is betting big on fashion business and the company is expected to boost its U.S. apparel market share. Over the next five years, Amazon’s share is likely to triple in the U.S. apparel market, according to the Bloomberg report.
The report said that Amazon is currently the biggest seller of clothes online in the U.S., with its apparel sales totaling $16.3 billion last year. Currently, the America’s largest apparel seller is Wal-Mart, with a total of $24 billion in clothing sales.
In the list of top 10 clothing sellers in U.S. in terms of revenue, Amazon is at no. 4 with $16.3 billion in annual apparel sales. The company is not too far from Macy’s $21 billion in apparel sales and TJX Cos. $17 billion, according to Bloomberg.
Department stores are facing a tough competition and their sales are falling. In the second quarter, collective sales at the six largest U.S. department stores fell $660 million year-over-year. Most buyers went to Amazon, whose clothing sales rose $1.1 billion in the quarter from a year earlier, according to Morgan Stanley analyst Kimberly Greenberger. A survey, conducted by Morgan Stanley in April, revealed that a fifth of U.S. consumers “frequently” buy clothes on Amazon.
Why fashion brands view Amazon as the enemy
Fashion brands view Amazon as the enemy. Many brands stopped selling goods on Amazon.com because of its cluttered website and the risk of counterfeit goods. They either started their own website or continued to sell from their department stores.
The e-commerce giant decided to jump on the fashion business by making its own private-label clothes. The company started selling t-shirts, leggings, and jeans, things that people love to buy online.
In 2009, the online retailer acquired Zappos, an online shoe and clothing shop based in Las Vegas, Nevada, in an all-stock deal worth about $1.2 billion.
The company upped the number of apparel and accessory item on its website by 87% in 2015 from the year before, according to trade publication Internet Retailer.
In addition to focusing on apparel and accessory products, the e-commerce giant is also bullish on opening physical bookstore. As part of its plans to become a national bookstore chain, the online retailer is opening bookstore in the U.S. The company opened its first bookstore in Seattle last year and plans to open another bookstore near Boston. The company’s CEO Jeff Bezos in May told shareholders that his company is considering more brick-and-mortar bookstores.