Amazon going bespoke as it eyes bigger piece of apparel market

Amazon is exploring the possibility of selling custom-fit clothing. Analysts say it is set to become the largest seller of apparel in America this year.
Amazon is exploring the possibility of selling custom-fit clothing. Analysts say it is set to become the largest seller of apparel in America this year.PHOTO: NYTIMES

SEATTLE • If future anthropologists want to study the rubble of early 21st-century retail, a good place to start will be what Amazon.com did to apparel shopping in the few years before and after 2017.

The outlook for physical retailers is grim, the sector roiled by store closings, layoffs and bankruptcies.

This year, Amazon will surpass Macy's, which last year announced it would shut 100 stores, to become the largest seller of apparel in the United States, by several analysts' estimates. It is looking at ways to keep expanding, too.

The online giant is exploring the possibility of selling custom-fit clothing, and it has considered acquiring clothing manufacturers to further expand its presence in the category.

"I do think this year is the year apparel e-commerce takes off," said Mr Cooper Smith, an analyst at research firm L2.

Ms Pia Arthur, an Amazon spokesman, declined to comment.

Amazon is, by far, the biggest beneficiary of e-commerce growth, accounting for 43 US cents (60 Singapore cents) of every dollar spent online in the US last year, estimated Slice Intelligence, a company that measures online shopping.

However, there is little chance Amazon will come to have in apparel the crushing dominance it has gained in, say, books, because of the way clothing sales are fragmented among so many retailers.

But its apparel team is exploring the possibility of offering "on-demand" clothing that would be made only after an order is submitted, using a customer's precise measurements, according to a person briefed on the discussions.

Last year, the company's gross merchandise apparel sales - Amazon's direct sales of clothing plus the commission it collects on sales by independent merchants on its site - were US$22 billion, or 6.6 per cent of the market, Cowen and Co estimated. By 2021, the stock research firm has forecast, Amazon will account for just over 16 per cent of apparel sales.

"We look at it as winner take most," said Mr John Blackledge, an analyst at Cowen.

Still, Amazon faces hurdles; some apparel makers have been frustrated by the prevalence of counterfeit versions of their products on Amazon.

Last year, Birkenstock stopped selling its footwear directly to Amazon, becoming one of the biggest brands to do so. But the sandal maker has since warmed again somewhat to Amazon, allowing authorised independent sellers to continue to sell its products on the site.

NYTIMES

A version of this article appeared in the print edition of The Straits Times on May 02, 2017, with the headline 'Amazon going bespoke as it eyes bigger piece of apparel market'. Print Edition | Subscribe