Amazon is predicted to become the U.S.’s biggest apparel retailer, surpassing Macy’s, by the end of this year. In 2017, apparel sales on the platform climbed 30%; in addition, Amazon launched more than a dozen private label brands, introduced Prime Wardrobe, debuted the Echo Look—and they’re just getting started. Meanwhile, traditional retailers continue to struggle, relying on discounting to drive consumers into stores and online shops.
What’s Selling On Amazon
When analysts looked at Amazon’s best-seller rankings for July, they found men’s basics, such as undergarments, t-shirts, socks, and polo shirts led the apparel category, accounting for more than half of menswear sold on the site. While legacy brands like Hanes, Levi’s/Dockers, Fruit of the Loom, Under Armour, and Champion currently represent about half of all sales in the category, they shouldn’t get too comfortable. Amazon’s private label brand, Amazon Essentials, is encroaching on the best seller rankings and, as Amazon continues to put strategies in place to boost sales of its private label brands, you can bet it will pose a threat to those legacy brands.
While men focused on the basics, July’s best-sellers in the women’s category were dresses (26%), swimwear (20%), workout wear (18%), and bras (18%). But here’s where it gets interesting—the vast majority of best sellers in the women’s category are independent brands that traditionally only sell wholesale as opposed to direct-to-consumer. Also notable: all products in the women’s top 100 were under $50, with 89% selling for $20 or less. Although Amazon’s private label brands have yet to break into the best seller listings, Amazon is gathering a tremendous amount of data that reflects how women are searching and shopping, what they’re buying, and exactly how much they’re willing to spend. This data will no doubt inform the development of Amazon’s private label lines.
How the Gray Market Can Hurt Brands
Amazon’s private label apparel isn’t the only threat to legacy brands. Third-party distribution of branded products—both real and counterfeit—continues to be an issue for contemporary fashion brands on Amazon. The practice, often referred to as the “gray market,” can hurt brands that don’t officially distribute products on the platform as prices, quality, and authenticity aren’t regulated by Amazon. Brands like Nike have been hard-hit by gray market practices; Nike has consequently entered into an official distribution partnership with Amazon to protect their brand. Additionally, Amazon recently began extending its anti-counterfeiting Transparency program to third-party retailers. The program, officially developed as a test for Amazon’s private label brands, allows brands to place Amazon’s blue Transparency label on items. When scanned with the Amazon app, the codes reveal information about the provenance, manufacturing date, and other product details which signals to the consumer that the product is authentic.
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