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Amazon Holds More Apparel Market Share Than TJX

No matter what the forecasts say, it’s still too early to tell how big of an apparel player Amazon is set to become—but the threat is real.

Morgan Stanley analysts recently noted that the retail juggernaut is number two in terms of overall U.S. apparel market share with just under 7 percent of the pie, behind Walmart and beating Target and Macy’s by nearly 2 percent. Amazon even outranks TJX, owner of off-price empires T.J. Maxx and Marshall’s, which the analysts placed fifth.

“We expect online (primarily Amazon) will continue to take share from department stores, but at an accelerating pace over the next five years given new evidence that Amazon is gaining traction in fashion,” Morgan Stanley wrote, as reported by Business Insider.

That traction has proved difficult to measure, however.

Earlier this year, analysts at investment bank R.W. Baird hit the headlines when they said the number of clothing and accessories SKUs for sale on Amazon surged by 91 percent to 30 million items during the 2015 holiday season, compared with the year before. While more product doesn’t necessarily mean more revenue (and Amazon doesn’t break out the numbers for apparel in its earnings reports), Morgan Stanley estimated that the Seattle-based e-tailer’s clothing sales increased by $1.1 billion in the most recent quarter. By comparison, Macy’s, Nordstrom, Sears, Kohl’s, J.C. Penney and Dillard’s together lost $660 million.

So, does that mean those six department stores are losing their shoppers and sales to Amazon? Or are people simply choosing to buy experiences instead of things? It’s slowly looking a lot like the former. Bloomberg reported last week that a recent Morgan Stanley survey found a fifth of U.S. consumers now “frequently” buy clothes on Amazon. Meanwhile 60 percent admitted they would buy more apparel on the site if a wider selection of well-known brands were available, which doesn’t bode well for Amazon’s fledgling private-label business—but then again, what consumers say and do are two entirely different things.

And the reason people would rather shop on Amazon instead of heading to a department store (which more than likely has all of those well-known brands already) is simple: convenience.

That being said, department stores are switching gears and deigning to become destinations—something Amazon can’t currently do. But can in-store beauty bars and dining options help retailers recapture that lost apparel market share? Only time will tell.