The Amazon Effect Is Hitting The Apparel Industry

Apparel, Footwear, Fashion

The Amazon Effect Is Hitting The Apparel Industry

1. In 2016, the total value of the US apparel market - both online and offline - was US$ 200 billion, with Amazon claiming about US$ 3.4 billion of that, according to new report from One Click Retail.

2. While total US apparel sales climbed 3% last year, Amazon's apparel sales within the US saw a 25% increase over the same period.

3. Most recently, Amazon announced Prime Wardrobe, its take on a clothing subscription service.

Women who feel "awkward" buying bras and underwear at brick-and-mortar retailers are now ringing up their lingerie purchases online instead, and this is helping Amazon gain coveted market share, a new report from sales analytics firm One Click Retail has found. The so-called Amazon effect is striking again, and this time in the clothing department, where it had been low-key till now.

In 2016, the total value of the US apparel market - both online and offline - was US$ 200 billion, with Amazon claiming about US$ 3.4 billion of that, One Click Retail said. While total US apparel sales climbed 3% last year, Amazon's apparel sales in the US saw a 25% increase over the same period.

The top-performing apparel categories on Amazon.com in 2016 included men's bottoms, which pulled in US$ 375 million in sales; women's intimate apparel, which boasted US$ 250 million in sales; women's denim, with revenue of US$ 170 million; and men's underwear, with sales of US$ 165 million, according to data from One Click Retail.

In Amazon's "sneak peak" of Prime Day deals, the company said its Prime Exclusive clothing, handbags and more, would be 40-50% off. Prime members can also save 30% on select clothing, shoes and more for men, women, kids and in the baby department, Amazon said. In the spring, Amazon introduced Simple Joys by Carter's, a line of children's clothing sold in bundles; the Carter's company designed this line to sell exclusively to Amazon and its Prime members.

Before this, Amazon was selling its own private-label clothing brands, but they were hardly being marketed online. Thus far, Amazon's so-called bread and butter when it comes to apparel has been more "everyday essentials" & not as much luxury.

"Our data shows that the company is having great success with necessities and everyday items such as jeans, socks, underwear and men's work clothes," One Click Retail's report said. Though, "in their efforts toward a hassle-free shopping experience, Amazon is investing in innovation: in payments, order fulfillment, product selection & now, with Amazon Prime Wardrobe, return policy flexibility."

It's possible that Amazon's reach in the market for clothing will extend to the physical world. One reason Amazon might look to make a real estate heavy acquisition in the future: department stores, discount stores and specialty stores remain the top store formats where women shop most often for clothes, according to a recent research report from Fung Global Retail & Technology.

Meantime, a whole host of specialty retailers have filed for Chapter 11 bankruptcy protection this year alone, including clothing brands The Limited, Wet Seal, BCBG Max Azria, Rue21, Gymboree and just last week True Religion.