Amazon'S Massive Consumption Of Clothing Has Become The Biggest Threat To Global Fashion Retailers.

Increasing the size of Amazon in clothing has become the biggest threat to global fashion retailers.

Amazon has successfully defeated WAL-MART, becoming the most popular clothing retailer for American consumers, according to the latest survey released by Coresight Research. The report shows that of the 1732 American adults surveyed, 65% of respondents bought clothing or footwear products on Amazon's website. Clothing surpassed books, cosmetics and electronic products and became the most popular product of Amazon's website.

21.5% of the respondents said they would choose Amazon self clothing brand products, and their self clothing brands sold only in the clothing footwear category after Nike, Under Armour and Adidas. In addition, about 19% of respondents said they planned to spanfer some or all of their clothing expenses from retailers such as T.J.Maxx and Marshalls to Amazon this year, up from 16.6% last year.

Coresight stressed that the findings are bad news for apparel retailers. When respondents were asked to choose shopping places besides Amazon, the answer came from WAL-MART, followed by Target, which means that Amazon had occupied the leading position in the American Apparel Industry, and WAL-MART had long been recognized as the largest apparel retailer in the United States for a long time.

Affected by this, sales growth and passenger volume of traditional retail giants such as Messi's department store and J.C Penny have been severely hit, and the cold winter of us entity retailing continues to deteriorate. According to statistics, in the 48 hours of last weekend, Gap, Wei Ming and Foot Locker and other brands and chain stores have closed 465 stores.

In fact, as early as last March, Axios quoted five sources as saying that US President Trump had talked about using antitrust laws to "chase" Amason, because he was worried about the traditional shopping malls and physical retail outlets or being squeezed out by Amason. Trump also wants to adjust Amazon's tax treatment and publicly call for Internet tax collection for Internet retailers.

Some analysts pointed out that convenient browsing, inexpensive delivery service and a wide variety of commodities have always been the attraction of Amazon, providing consumers with abundant and convenient service through massive brand aggregation, and on the one hand, expanding the choice of diversified products as much as possible. On the other hand, the improvement of delivery speed of its increasingly perfect logistics system is gradually overcome the inherent disadvantages of online shopping.

Since 2012, Amazon began to gradually increase its fashion dress section. In February 2016, it suddenly launched a low-key line of 7 self run clothing brands, namely Society New York, Lark and Ro, Scout and Ro, Franklin and and, MTV, MTV, and so on, covering women's wear, women's bags, children's wear and men's wear, and so on. The product category has increased to 4904.

Since 2017, Amazon has continued to exert its efforts from the clothing sales platform to the upstream apparel supply chain, the self dress brand of the platform and the end consumption experience, so that the pressure of the traditional clothing retailers is increasing.

Amazon is also cooperating with some of the biggest sportswear suppliers to develop its own brand of sportswear, which will trigger new waves in the noisy industry, bringing the world's biggest sports brands to new competition, Bloomberg quoted people familiar with the matter. Amazon has already stepped into its own brand fashion industry, launching Goodthreads, Paris Sunday and other professional wear, jackets and dress brands.

At the same time, Amazon launched the beta Prime Wardrobe "trial and buy" service, that is, Prime members can enjoy the online order to send the clothes that they like to go home for trial wear, choose the clothes left within 7 days, and then put the rest in the Prime Wardrobe box to send this special service. The brands covered include popular Adidas, J.Brand and Levi's, as well as the Amazon self run clothing brand, including Calvin Klein, Hugo Hugo, and other high-end brands.

At present, young consumers are more and more inclined to "pre test and buy". Klarna, a global payment service provider, recently released a research report on "pre test and buy". After investigating 1000 Z generation and millennial consumers, Klarna found that younger generation consumers increasingly attach importance to seamless, personalized and flexible shopping experience. Over 66% of respondents said that a free and simple return policy is a key factor in improving online shopping experience, and indicated that if they could try clothes before buying, they would be willing to pay higher prices.

To further enter the luxury high-end market, Amazon finally faced up to its counterfeit problem this year, and for the first time in its annual report to the securities and Exchange Commission, it said that the company could not prevent the sellers from selling illegal, counterfeit or pirated products that Amazon might sell through Amazon. CNBC analysts stressed that this report reflects Amazon's concerns about its platform fakes, which had never been mentioned in the annual report.

Last week, Amazon stepped up its efforts to crack down on counterfeiting products and launched a new project called "Project Zero" to allow Brand Company to delete counterfeit products on its own. It is reported that Amazon will combine the self branding of brands, automatic identification of logo and trademark on the website, and the unique code that helps confirm the authenticity of the products. The brand that will join the plan will be able to delete the counterfeit products it considers, without having to report to the Amazon.

According to fashion headline data, Amazon's revenue reached $232 billion 900 million in 2018, and its profit exceeded $10 billion for the first time. In the fourth quarter, Amazon's revenue grew 20% to $72 billion 400 million compared to the same period last year, with a profit of $3 billion, which has been more than 1 billion US dollars for fifth consecutive quarters. Among them, the number of members of Amazon Prime has reached 101 million, and 62% of American users have become Prime members, with an average cost of $1400 per year, and non Prime members spend an average of $600 per year.

Some analysts believe that in the visible time, Amazon will continue to wrap up the middle end and light luxury brands, and the brands such as Michael Kors and Kate Spade, which are dragged down by the US Department store industry, are also demonstrating to Amazon.

It is noteworthy that Amazon has also focused its attention on the Chinese market, especially after its expansion in the India market has been hindered. This year, Amazon China will launch the "fashion +" project, combining its global fashion resources with China's market resources, and set up a fashion category seller's exclusive service team to help Chinese fashion sellers better develop their overseas fashion business and create their own brands through their platform, covering five major categories: clothing, jewelry, luggage and so on.

But Amazon also needs to be vigilant while accelerating its expansion. Some analysts say that it has reached a large scale before creating a high profit business, and the threat of strong competition will hinder its earnings growth. WAL-MART, the world's largest entity retailer, will become the most terrible nightmare of Amazon in the next two years.

In March last year, WAL-MART launched four self owned clothing brands, including women's brand Time&Tru, women's wear Terra&Sky, children's wear brand Wonder Nation and men's wear brand George, ranging from 5 to 30 dollars, and specially set up special fashion and furniture website, regarded as the first step of the retailer's benchmarking Amazon.

In order to better compete online with Amazon, WAL-MART announced the acquisition of Israel's start-up Aspectiva in February this year. The company mainly analyzes the UGC content of the social platform through AI technology, such as consumer product reviews, and combines it with the browsing behavior of shoppers to provide product suggestions for online and store shoppers, similar to the concept of "new retail".

According to the latest data, WAL-MART's electricity sales increased by 43% in the fourth quarter. In 2018, it achieved 40% of online sales growth, and the growth rate has surpassed Amazon. The group's chief financial officer, Brett Biggs, predicts that every quarter's growth will be between 30% and 40% this year, and the annual sales of e-commerce will continue to grow by 35%.

According to Edison Trends research, sales of Messi department store increased by 24%, and Target department store's online sales rose by 48%. The department store will also launch three underwear brands this month, mainly selling bra, underwear and pajamas. The price of the product is 1/3 of the average price of 60 dollars, and the highest price is not more than 22 US dollars. It is expected that sales will exceed 1 billion dollars in one year. Amazon launched its own underwear brand Mae in 2017, priced between $10 and $22.

At the same time, WAL-MART and other retailers in the field of digital advertising are also weakening some of the growth prospects of Amazon, and constantly challenge the position of the online retail giant in this field. Considering that Amazon has only earned $207 billion from the retail sector and AWS has earned more than $25 billion, WAL-MART actually has a larger retail business to attract advertisers, especially advertisers who are looking for cross selling between online and physical stores.

To be sure, the days of easy grabbing market share in the clothing retail market dominated by giants and almost saturated are no longer the same. With the change of consumers' shopping concept, the online and offline battle between Amazon and WAL-MART has just begun.

Amazon's stock price has risen 8.6% this year, and its market capitalization is about $833 billion 100 million.