Report: Amazon’s Strides In Apparel Could Be Serious Threat To Brick-And-Mortar Stores

Image courtesy of Mike Seyfang

As if retail chains aren’t already having a rough time of it lately, a new report says Amazon’s clothing business could prove to make things even worse in the future.

A Goldman Sachs report says brick-and-mortar apparel stores may lose some ground to Amazon, noting that the e-commerce giant has grown by leaps and bounds recently and will likely continue to grow, Yahoo Finance reports.

The report estimates that apparel and accessories represent $10 billion in sales for Amazon, accounting for 20% of the online apparel and accessories market. Macy’s is behind it with just $5.2 billion in sales.

Amazon’s success is due to a few things: many brands sell on its site, or to Amazon’s buyers. More will in the future as well, as companies like Gap have said they’d consider working with the online retail behemoth. Others should follow suit, “because they need to migrate to where consumer traffic is,” Goldman said.

“Many wholesale brands still do not sell directly to amazon.com, but access to more brands – which we believe is coming – supports further growth ahead,” the report read.

Online apparel in general has been a growing business, increasing at a rate of 20% per year over the past few years, the report notes, while at the same time, brick-and-mortar sales have flatlined.

In addition to selling other brands’ clothes, Amazon also launched its own private label apparel brands, in an effort to capitalize on its growing success in clothing sales.

Goldman: You’ll be buying more of your clothes on Amazon soon [Yahoo Finance]