George Anderson
Amazon.com is the number one seller of clothing in the U.S., having surpassed Walmart in 2020 to earn that distinction.
The e-tailing and technology giant saw its sales of clothing and footwear jump 15 percent to $41 billion last year, according to analysts at Well Fargo. The move upward reflected a multiyear trend that, no doubt, received a boost as more home-bound Americans went online to buy what they needed during the pandemic.
Ike Boruchow and Tom Nikic of Wells Fargo estimate that Amazon’s sales represent 11 to 12 percent of the total U.S. market and between 34 and 35 percent of what is sold online. Amazon’s revenues are about 20 to 25 percent higher than Walmart’s overall and its online business is seven times that of its closest rival, Macy’s, online. The two analysts expect Amazon’s sales will grow another $4 billion this year to top $45 billion.
Amazon has benefited from a number of factors in growing its share of the market. The company has used its influence with more than 100 million Prime members, fast delivery times and responsive customer service (this includes its Zappos business, as well) to get consumers to try their sites for purchasing clothing essentials.
The retail giant has responded to the opportunity by expanding its selection of private labels items while recruiting third-party sellers, including the likes of Lands’ End and The Children’s Place, to sell on its marketplace.
Amazon has further sought to expand its reach by moving into higher priced goods and seeking more brand partners. The site introduced Luxury Stores last September, featuring Oscar de la Renta as its first significant brand partner. While a report by Glossy suggests that the going has been slow, to date, Amazon has not provided any indication of consumer acceptance and has said that brand relationships with current sellers are favorable.
Bringing on key partners and keeping them has proven a challenge for Amazon, with some complaining that the shopping experience on the site fails to play to 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 emphasized its strategic plan to eliminate partnerships that failed to provide its customers with a differentiated experience and to focus more on doing that itself with its consumer-direct business.
DISCUSSION QUESTIONS: What do you see as the biggest factors supporting Amazon’s growth in apparel and footwear sales? What will Amazon need to improve upon and add in the years to follow to maintain its top position and further grow its share of the market?
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