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Target is Falling Victim to Amazon Prime-Fueled Apparel Sales

When it comes to apparel, Amazon has made its intentions clear over the last year as it has rolled out a slew of new private label collections and forged alliances with big name brands. And it seems its efforts are working—much to the chagrin of its competitors. And one retailer in particular seems to be losing more than the the others.

A new report from CoreSight Research shows that Amazon, fueled by the shopping habits of its Prime members, is becoming a go-to for apparel sales, especially among Target shoppers.

While Walmart has maintained its status as the most shopped apparel retailer in the U.S., Amazon is now on par with Target for the No. 2 spot.

Of the 1,699 American adults queried for the survey, CoreSight found that 46 percent of them shopped for clothing or footwear on Amazon in the last 12 months. That number swells to almost 66 percent among Prime members, making Amazon the leading apparel and footwear retailer for this group. Notably, non-Prime members are much less likely to purchase apparel on Amazon. For them, Amazon is ranked as the seventh most shopped retailer.

“This implies that growth in Prime membership will underpin Amazon’s expansion into clothing and footwear,” according to the report. As other analysts have noted, the growth of Prime could be slowing as it reaches a saturation point. This report shows that 64 percent of respondents have access to a Prime account either their own (43 percent) or someone else’s (21 percent). “So, Amazon may need to focus on driving up purchase frequency and average spend in order to support its market share gains.”

Euromonitor estimates Amazon’s U.S. clothing and footwear sales reached $24.6 billion in 2017 with $20 billion coming from third-party sellers. CoreSight said if so, that would put Amazon on par with Walmart.

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As apparel purchases increase on Amazon, those dollars are coming from somewhere. CoreSight asked participants where they used to shop and more than any other retailer, the answer was Target. Of respondents that spend more on clothing on Amazon than they have in the past, 30.3% have switched from Target. Walmart (24.9%), Kohl’s (23.5%), Macy’s (23.1%) and J.C. Penney (21.1%) round out the top five retailers that are losing share to Amazon.

More than 58 percent of Target shoppers intend to buy clothing on Amazon in the next 12 months.

The report further illustrates the overlap between Target and Amazon shoppers by noting that 48.6% of Target shoppers have a Prime membership. Only 38.8% of Walmart shoppers have Prime.

By category, adult footwear and casualwear are the site’s best sellers. The top three apparel brands on Amazon are Nike, Under Armour and Hanes. Collectively, Amazon’s private label collections, including Amazon Essentials and Lark & Ro, snag the fourth spot.

The survey found that 1 in 9 Amazon apparel shoppers have purchased something from Amazon private label.

Shoppers ages 18 to 29 indicated the most interest in Amazon’s apparel offerings, whether it’s private label goods, the Prime Wardrobe service or even a potential Amazon brick and mortar store. More than 35 percent of these respondents want to see more apparel and footwear options on the site.

Overall, shoppers say they opt for Amazon because the site is easy to navigate and because they get cheap delivery through Prime. “These findings are contrary to some commentators’ perceptions that the Amazon website does not provide a quality experience when it comes to shopping for fashion because the site was designed to sell specification purchases (such as books and electronics),” the reported noted. “Responses to our survey suggest that Amazon’s website does indeed deliver the experience apparel shoppers seek.”

In addition to these top intent drivers, it’s interesting to note that 31.6% of those who’ve purchased apparel and footwear on the site have done so through “force of habit” since they’ve become used to turning to Amazon for a variety of purchases.

Even given the company’s success in apparel, it has one stigma to overcome. CoreSight found that 48 percent of shoppers expect a deal on apparel and footwear on Amazon.

“Amazon appears to be tackling these perceptions already: its work in building out its private-label ranges and bringing brands such as Nike on board should support its move into the mainstream as a full-line fashion retailer,” said CoreSight.