Amazon tops Walmart as US top apparel retailer: Wells Fargo
Amazon has surpassed Walmart as the top apparel retailer in the U.S, according to an analysis released by Wells Fargo.
Wells Fargo estimated that Amazon’s apparel and footwear sales in the U.S. jumped by 15 percent in 2020, raking in $41 billion in sales. This placed the tech giant 20 to 25 percent above Walmart.
“This represents highly impressive 11%-12% share of all apparel sold in the U.S. and 34%-35% share of all apparel sold online,” Wells Fargo analysts Ike Boruchow and Tom Nikic wrote. “We now estimate Amazon will surpass $45 billion in apparel/footwear sales in 2021.”
According to the banking giant’s analysis, Amazon now claims about 30 to 35 percent of the online apparel and footwear market.
“To put this in perspective, Amazon sold almost 7x as much apparel/footwear as the second largest player online (Macy’s),” Boruchow and Nikic noted.
Wells Fargo noted that this massive growth was fueled by a boom in e-commerce shopping brought on by the coronavirus pandemic as more consumers avoided in-person shopping.
Amazon’s free shipping and enhanced speeds pose the greatest threat to other retailers, according to Wells Fargo, as other companies usually require added fees for 1 to 2 day shipping.
“As an increasing number of consumers become Prime members (an inevitability, as Amazon accounts for a growing portion of wallet share), the average online shopper will only come to expect more from online retailers who are competing with the behemoth site.”
The bank also noted that Amazon’s performance is causing other companies to improve their own online shopping experience, but many have found that website improvements are not enough to compete with the tech giant.
“Many vendors are partnering with Amazon to establish a comprehensive brand presentation on the site, with assortments that minimally compete with existing channels,” Wells Fargo wrote. “Perhaps more importantly, partnering with Amazon allows brands to better police 3rd party distribution on the site and maintain control of their brand image/equity.”
Despite this, Wells Fargo said in its report that Amazon could still improve on some areas, such as carrying more brands that consumers want. CNBC noted companies like Nike, Birkenstock and PopSocket have said they will no longer sell products directly to Amazon due to issues regarding counterfeits and aggressive pricing tactics.
“Until Amazon becomes a platform that works with companies to elevate brands, rather than viewing the relationship as transactional, companies who are fiercely protective of their brands (e.g. Nike), will not sell to Amazon,” the analysts added.
–Updated at 2:46 p.m.