Amazon’s big moment in apparel

If future anthropologists want to study the rubble of early21st-century retail, a good place to start will be what Amazon.com did to apparel shopping in the few years before and after 2017.

The outlook for physical retailers is grim, the sector roiled by store closings, layoffs and bankruptcies. This year, Amazon will surpass Macy’s, which last year announced it would shut 100 stores, to become the largest seller of apparel in America, by several analysts’ estimates.

It is looking at ways to keep expanding, too. Amazon is exploring the possibility of selling custom-fit clothing, tailored to the more precise measurements of customers, and it has considered acquiring clothing manufacturers to further expand its presence in the category.

If there are tipping points in retail — moments when shopping behaviour swings decisively in one direction — there’s a strong case to be made that apparel is reaching one now, with broad implications for jobs, malls and shopping districts.

Those moments often occur around the time that online shopping reaches about 20 per cent of total national retail spending in a category, the research firm L2 has concluded after studying the evolution of e-commerce. Online clothing and accessory shopping’s share of retail hit 21 per cent last year, according to estimates by Cowen and Company, a stock research firm.

“I do think this year is the year apparel e-commerce takes off,” said Cooper Smith, an analyst at L2.

Apparel has been something of an e-commerce laggard. In years gone by, buying clothing over the internet was only for the fearless, with most shoppers unwilling to take the risk that a dress or a pair of shoes would fit poorly or look terrible on them.

It took time, but shopping habits for clothing are shifting profoundly.

Amazon’s solution was to improve clothing selection, pour money into photography to give internet shoppers a better representation of garments and offer free returns on most apparel so customers could order untroubled by the thought of sending items back.

Pia Arthur, an Amazon spokeswoman, declined to comment for this article.

Amazon is by far the biggest beneficiary of e-commerce growth, accounting for 43 cents of every dollar spent online in the nation last year, estimated Slice Intelligence, a company that measures online shopping.

But there’s little chance Amazon will come to have in apparel the crushing dominance it has established in, say, books, because of the way clothing sales are fragmented among so many retailers. Amazon accounts for half the country’s consumer book market on a unit basis, according to the Codex Group, a book market research firm.

Last year, the company’s gross merchandise apparel sales — Amazon’s direct sales of clothing plus the commission it collects on sales by independent merchants on its site — were $22 billion, or 6.6 per cent of the market, Cowen estimated. By 2021, the firm has forecast, Amazon will account for just over 16 per cent of apparel sales.

“We look at it as winner take most,” said John Blackledge, an analyst at Cowen. “That’s their game.”

Still, Amazon faces hurdles in its apparel business.

By 2021, the Cowen and Company has forecast, Amazon will account for just over 16 per cent of apparel sales