Conform to Cowen & Co, Amazon is going to become America’s number one clothing retailer in 2017. Despite the constant turmoils in the fashion and apparel retailers for the last few months, Amazon’s shares keep going up.
It is a sound effect, thanks to the company’s constant advances in the apparel e-commerce space and the market analysts at Cowen & Co are positive that Amazon is on its route to displace Macy’s as the number one clothing retailer by the end of 2017.
The Cowen & Co team made this call two years ago, back in July of 2015, when they were saying that Macy’s would lose its top spot within two years as a direct consequence to Amazon’s plans to use its powerful e-commerce platform for selling clothes, shoes and accessories.
Two years later, their prediction came true. Just by looking at only the revenues from general merchandise and electronics at Amazon, the trend becomes quite evident. Even more, since the deployment of its Prime service, Amazon has seen continued growth with its e-commerce and retail business model.
On the other hand, after seeing a significant drop in sales following the recession and before the sales went back up, Macy’s overall stance is one of the leading causes of concern.
The Chinese Clothing Retailer JD Reported a 47% rise in revenue
The company’s stock prices also reflect the trend. Macy’s is now down more than 50 per cent over the past year, in comparison to Amazon that is 65 per cent up from the same period last year. In 2016, e-commerce is king.
The fashion industry must recognise that and use it to its advantage, or the so-called tech-based companies will take over, in unexpected market mergers and moves.
Similar Read: Top 5 E-Commerce Startups Changing The Fashion Industry
Despite the uncertainty in the fashion world, e-commerce sales are booming. It is not only Amazon making significant gains with its e-commerce apparel sales. For example, China’s No.2 e-commerce company, JD.com Inc has also reported a 47 per cent rise in revenue.
As the sales on its platforms surged, JD’s earnings for the second quarter are expected to reach almost 10.17 billion US dollars, at a growth rate of 44 percent.
On that note, it appears that Macy’s administration recognises that the department store type of retail model needs urgent changes and that the fashion sales are “moving” online.
“We are not pulling back our commitment to digital and omnichannel retailing.” Mobile is our high priority; we focus and invest on,” said Macy’s Chief Financial Officer Karen Hoguet.