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Why Amazon’s Apparel Ascendance Isn’t Necessarily a Bad Thing for Brands

For any fashion brands still on the fence about selling on Amazon, recent research suggests it would be smarter to make the retailer an ally rather than a rival.

“Amazon is likely to become the largest clothing seller in the US by the end of 2018, so now is the time for Apparel and Shoes brands to invest in their Amazon strategy,” according to One Click Retail’s Apparel & Shoes Amazon 2017 Review.

The sales data firm, which specializes in e-commerce marketplaces, reports Amazon’s direct and third-party clothing and footwear sales in the U.S. reached $5.5 billion in 2017. That’s a 25 percent gain over 2016 sales numbers.

Given the way people shop for clothes, One Click said Amazon’s sales have been centered around basics rather than fashion goods. “Most clothes-shopping takes places in stores where consumers can browse through a selection of items looking for something that catches their eye and then–and this is important–can try it on before they buy it,” the report noted.

Given the more tactical way men shop, it’s no surprise that menswear leads apparel sales. This category, which grew 27 percent year on year, pulled in about $2.5 billion, with jeans leading the sales at $370 million.

Womenswear, which topped out at more than $1.7 billion, grew by 20 percent over 2016. Though the results seem to indicate that women are still more tied to physical stores, Amazon excels in specific areas.

“One of the key growth opportunities for brands selling through Amazon is to offer items that may be hard to find in store,” the report noted, adding the top seller for the year was a full-figure bra by Lilyette. In fact, full-figure bras were the top sellers overall at $150 million.

One Click attributes the 29 percent increase in children’s wear to the age and stage of Amazon’s core demographic. “More and more of Amazon’s core audience–millennials–are having children, which is driving a major increase in sales of related products including Kids Apparel,” the company noted. Here, girls’ underwear was the leader at $25 million.

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Lead by the athleisure trend, Amazon’s footwear sales reached $3.7 billion last year. Though the category’s growth is much slower than apparel, the retailer continues to invest in it with the launch of a private label brand and the recent Nike tie-up.

Women’s shoes, which topped out around $1.7 billion, grew by 9 percent over the previous year. One Click surmises that the $360 million in sandals sales reflects the need to try before consumers buy. Men’s footwear grew at about the same rate (8 percent) to $1.6 billion with running shoes commanding $170 million. Casual shoes were the go-to in kids, which increased by 7 percent for the year, bringing the category up to $400 million.

Though the most well-known names in footwear led athletic shoe sales, One Click pointed out that smaller brands are finding success in the outdoor and comfort categories.

As Amazon’s success in apparel has grown, so has its commitment to establishing its own labels. And these private-label lines pose a real threat to brands, according to One Click. “When launching a new product line, Amazon will typically undercut a competitor’s price, which usually then causes the competitor’s price to drop,” the report noted. “So in clothing and footwear where margins are relatively high, Amazon has the ability to offer very attractive price points for its private brands, which could then cause prices to fall across the board.”

One Click said it’s not impossible for sellers to capitalize on Amazon’s push into apparel, however.

“For brands, the biggest opportunities come from leveraging Amazon’s infinite shelf to offer sizes and variants that are hard to find in stores, competing in the growing ‘athleisure’ space, and offering premium and luxury product lines on Amazon at a time when there is little competition,” the report said.