Historically, the generally accepted belief was that online retailers posed little risk to brick-and-mortar apparel stores whose fitting rooms and promise of instant gratification represented distinct advantages; or so it was thought. But millennials – those coming of age early in the new century – seem quite willing to delay gratification and to cope with the hassle of returning unwanted merchandise. This valuable demographic group – 18 to 34-year-olds – accounted for 35% of all online apparel purchases in 2016 according to Slice Intelligence, a research firm focused on online commerce.
Slice reports that Amazon, who leads all other apparel retailers in capturing this attractive demographic segment, garnered a 16.6% share of millennial’s 2016 online apparel purchases. That’s more than twice Nordstrom’s 8.1% share; more than three times Old Navy at 5.1%; almost four times that of J.Crew (4.2%); and four and a half times Macy’s 3.6% share. Demonstrating a serious commitment to the apparel sector, Amazon launched seven private-label clothing brands last year alone. Plus, it’s reported that the company will soon launch Amazon-branded bras and has an active-wear line in development.
Even worse for department stores and mall-based apparel retailers, Amazon continues to gain momentum in clothing categories. Cowen & Company, a diversified financial services company, projects that Amazon’s clothing and accessory sales will jump 30% in 2017, while Macy’s sales, for example, will likely decline 4%. This partly explains Macy’s decision to close 68 of its 728 stores in 2017. Barring some game-changing development, it’s likely that online apparel sales will continue to strengthen and Amazon, in particular, will increase its share-of-mind and sales among this next generation of shoppers who exhibit a strong “digital-first” preference.
Even online-only competitors such as eBay have seen fit to modify policies and practices in attempts to thwart Amazon’s growing prowess, fueled in part by its popular Prime membership program. Amazon Prime promises free two-day shipping on many purchases and unlimited streaming of movies and TV shows. This week eBay announced plans to guarantee delivery of twenty million items within three days, many for free. In comparison, Amazon’s Prime membership offers free, 2-day shipping on more than fifty million items.
Notably, two-thirds of eBay’s orders already ship free and more than three in five arrive within three days. Nevertheless, eBay felt the need to beef up its delivery promises, motivated by research indicating that online shoppers rank having a guaranteed delivery date the number-two decision-making criterion, second only to free shipping. eBay will even offer free returns on items that arrive outside the promised delivery window.
This eCommerce news summary is provided by Butcher Block Co. – an online store specializing in cutting boards, kitchen countertops, furniture, equipment and accessories. BBC strives to keep consumers abreast of key trends in online retailing.
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