An unlikely company is about to become the biggest clothing retailer in the US
The shift would represent a huge shakeup for the apparel industry, which has long been dominated by department stores like Macy's, Nordstrom, and JCPenney, as well as big-box retailers including Walmart and Target.Amazon is a relative newcomer to the fashion world, and it has made a swift rise to the top.
As Amazon's sales grow, so will its share of the apparel market in the US.Amazon currently claims about 6.6% of the market. That share is expected to increase to 8.2% by next year, and further expand to 16.2% within five years, according to Cowen analysts.
By 2021, Cowen expects Amazon to generate $62 billion in annual apparel sales. TJ Maxx is expected to be the No. 2 clothing seller with $26 billion in sales and Macy's is expected to claim the No. 3 spot with $23 billion in sales.Over the past couple of years, Amazon has ramped up its investment in fashion by launching its own private-label clothing brands and sponsoring the first New York Men's Fashion Week.
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Also in the past few years, Amazon has started to shift its fashion strategy toward offering more high-end designer names, such as Zac Posen and Stuart Weitzman.
That shift has had some industry experts scratching their heads. Luxury fashion websites are typically well-merchandised and highly curated - not things for which Amazon is necessarily known.Amazon's weaknesses with curation were highlighted in a shopper survey by Cowen & Co. that was conducted in July.
"Amazon Fashion got a very lukewarm review for site personalization and ease of use," Cowen analyst John Kernan said in a conference call Tuesday. Shoppers said it "wasn't particularly easy to browse."
Amazon also has the disadvantage of having no brick-and-mortar stores where shoppers can try on items or return purchases, he said.So why do people choose to shop at Amazon for clothes?
Shoppers cited the convenience and free two-day shipping as the biggest advantage of shopping on Amazon for clothes.Shoppers also praised Amazon's customer service and breadth of product reviews.
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
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