Online retailer Amazon will become the largest clothing retailer in the United States by 2017. A new report by Cowen suggests that the largest online retailer in the United States is growing leaps and bounds in the clothing segment.
The team of analysts, led by John Blackledge, sent out a note this morning predicting that Amazon will become the number one U.S. apparel retailer by 2017, “comfortably passing” Macy’s within two years.
According to the email:
We estimate AMZN’s US retail Apparel GMV [gross merchandise value] grows from $16BN in ’15 to $52BN in ’20, with US market share rising from 5% to 14% and comfortably passing Macy’s in ‘17.
The quick jump in apparel sales at Amazon is impressive. While the company was founded in 1994, it didn’t start selling clothing until 2012. Cowen’s apparel report states:
The company’s Apparel & Accessories footprint has come a long way since it first began selling Apparel in ’02 and numerous comments suggest Fashion is now the fastest growing vertical within Amazon’s largest revenue source, the EGM segment. Additionally, Amazon Fashion President Cathy Beaudoin disclosed Amazon Fashion has over 40MM customers (as of Feb. ’15).
The company still claims 70% of its revenue from electronics and general merchandise, a number that might shrink as more clothing buyers use Amazon Prime and same-day shipping to receive their items.
Over the past six quarters Amazon has beat Wal-Mart and Target in terms of apparel sales growth. The company has average an increase of 29 percent year-over-year. In comparison, Wal-Mart and Target have witnessed three percent and two percent declines, respectively.