Amazon to become ‘top US clothing retailer' by 2017

Online retail giant Amazon is currently on track to displace Macy’s as the number one US apparel retailer by 2017, according to analysts at financial services company Cowen Group.

John Blackledge, the bank's analyst, who also predicted in a report last July about Amazon overtaking Macy’s in clothing sales within two years, has stated that the recent earnings reports by Amazon and Macy's painted a clearer picture.

“In light of Amazon and Macy's recent results, we feel more confident that Amazon will displace Macy's as the No. 1 US apparel retailer by 2017,” Blackledge said in the research report. “Amazon's Apparel and Accessories business is one of the key drivers of Amazon's EGM (electronics and general merchandise) segment.”

Blackledge added: "[Our calculation] implies a gain in US Apparel and Accessories market share from 5 percent to 14 percent. We have seen a continued shift away from more traditional retailers. In the first quarter of 2016, Amazon Apparel purchases were up 19 percent year-over-year, while apparel purchases fell 1 percent year-over-year and 5 percent year-over-year at Wal-Mart and Target, respectively.”

Amazon's success in the apparel category is being driven by a “dramatically” larger selection than it rivals, as well as its recent improvement with brand relationships, superior fulfilment and technology innovations. The online retailer’s clothing business is continuing to grow, while traditional US retailers such as Wal-Mart and Target are in decline, Blackledge stated.

Blackledge noted that for the past three years, Cowen's monthly survey of 2,500 US consumers has consistently shown that Amazon is adding shoppers, while the number of Macy's shoppers hasn't changed, and it expects this trend to continue.

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