Jeff Bezos, head of Amazon, can be seen on the fringes of the company’s novelties event.
Andrej Sokolow | picture alliance | Getty Images
UBS estimates sales of apparel and footwear on Amazon in the U.S. grew roughly 15% in 2020 to more than $41 billion, which is 20% to 25% above rival 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,” UBS said. “We now estimate Amazon will surpass $45 billion in apparel/footwear sales in 2021.”
For years, Wall Street has predicted Amazon will leapfrog Walmart to claim the top spot in the U.S. apparel market. Amazon found early success by offering a wide range of basics, but it has since expanded its fashion business. It now features a growing slate of name brands and, last fall, it launched luxury fashion shops.
The pandemic has only cemented Amazon’s dominance in the apparel sector. Amazon was one of the biggest beneficiaries of the pandemic, with stuck-at-home consumers turning to the online retailer for much-needed essentials like toilet paper and hand sanitizer, as well as non-essentials like office furniture and workout gear. Consumers turned to Amazon for goods and services they might not have otherwise purchased from the company before the pandemic, like grocery delivery.
Amazon now claims a 30 to 35% share of the online apparel and footwear market, UBS said. “To put this in perspective, Amazon sold almost 7x as much apparel/footwear as the second largest player online (Macy’s),” UBS added.
Although Amazon has transformed into a top apparel player, UBS said the company could still make some improvements to the shopping experience, like carrying more of the brands that consumers want. Amazon has turned off some brands in the past and that could be hurting its ability to grow selection on the site, UBS said.
“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,” UBS analysts wrote in the note.
In 2019, Nike grabbed headlines when it announced it would no longer sell its clothes and shoes directly to Amazon anymore. Other brands, including Birkenstock and PopSockets, have also pulled out of Amazon in recent years, citing various issues from counterfeits to aggressive pricing tactics.