Shopping on Amazon.com, Inc. (NASDAQ:AMZN) is usually not associated with clothing. However, the company is trying to change that thought process. The clothing and accessories industry in the US is around $250 billion market, mostly owned by traditional brick ‘n’ mortar traders. However, Amazon is fast catching up.
As per an investment advisory firm, Cowen Group, Amazon is set to become the biggest apparel and accessories retailer in America few years down the line. By the coming year, Amazon could overtake, Macy’s, Inc. (NYSE:M)’s to reach the number one position as the seller of clothing in America. Cowen forecasts that in 2020, Amazon will have over $52 billion of sales from apparel and accessories accounting for 14% of the market in the US.
The number of items put on Amazon in its clothing and accessories categories has increased 91% over the previous year to 30 million items. That’s equal to the total number of items, not just clothing, sold in approximately 250 Wal-Mart Stores, Inc. (NYSE:WMT)’s supercenters combined.
Amazon launched its apparel & accessories store in 2002 with products from over 400 brands made available via marketplace sellers such as Gap Inc (NYSE:GPS), Nordstrom, Inc. (NYSE:JWN), Target Corporation (NYSE:TGT), Lands’ End, Inc. (NASDAQ:LE), Foot Locker, Inc. (NYSE:FL), Marshall Fields and Eddie Bauer LLC.
At the apparel store launch, Amazon founder and CEO Jeff Bezos said that Amazon’s goal was to provide a complete apparel selection and give it the Amazon- with simple navigation, a single shopping cart, user ordering and payment data already available and plenty of helpful information.
The organization has acquired companies, trialed formats, got high profile sponsorships and established a fashion division populated with industry veterans. Many retail chains earlier associated with Amazon have cut ties with it as it has become a major competitor.
Amazon now sells apparel itself, purchasing items wholesale from designers as well as clothing manufacturers. Certain high-end brands have stopped selling or refuse to sell to Amazon as it tried to safeguard their prestige image and please the boutiques and the department store that are their main clients.
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A lot of the apparel for sale on Amazon originates from outside merchants who purchase wholesale from suppliers and regard Amazon as another sales channel with their own websites and in certain cases physical outlets. Others are purchasing overstock goods and trading them at a discount on sites such as Amazon. Those traders give Amazon.com, Inc. (NASDAQ:AMZN) a cut of every sale and the Amazon marketplace is a large business.