Amazon (NASDAQ:AMZN) has quietly become a major player in the the apparel/fashion industry.
In fact, in the United States, the company has become the No. 2 player in the category with $20.3 billion in clothing gross merchandise sales in 2016, and a 7.4% of the overall market, according to a Morgan Stanley study. Only Wal-Mart has a bigger piece of the pie, and Amazon’s gains have come at the expense of Target and department stores including Macy’s (NYSE:M), Kohl’s (NYSE:KSS), J.C. Penney (NYSE:JCP), and Sears (NASDAQ:SHLD), according to the Morgan Stanley research. All of those chains are struggling on some level, or teetering on the edge of bankruptcy, in the case of Sears.
Now, Amazon has major plans to increase its apparel sales. The company is preparing for a massive hiring push in the space and has a number of new private-label brands. Perhaps most importantly, it also has a new Alexa-enabled tool designed to help customers look their best.
How is Amazon attacking fashion?
As of the end of April, Amazon had nearly 450 jobs with the word fashion in the title or prominently in the description posted on its careers page, eMarketer reported. Many of those openings are related to the seven private-label apparel brands it has introduced for Prime members, Goodthreads, Amazon Essentials, Paris Sunday, Mae, Ella Moon, Buttoned Down, and Lark & Ro.
The company has not promoted these brands much, but items from them are for sale on its website. They include basics and fast fashion for both men and women. In addition, the Mae line offers women’s underwear and bathing suits.
“Amazon will use private label selectively, which should both enhance the offering and induce traditional apparel vendors to sell to Amazon,” KeyBanc Capital analyst Ed Yruma wrote in a research note, continuing:
While apparel is one of Amazon’s fastest-growing categories, more work must be done for the business to scale. We expect the challenges the company has faced in courting the fashion community to remain, but we think Amazon will continue to evolve its strategy.