Is apparel retail reaching a tipping point, whereafter it becomes a mostly digital experience? And is Amazon about to be the big beneficiary of that change?
That is the question the New York Times posed over the weekend — in the face of data that indicates that online clothing hit something of a numeric tipping point in the last year. Consumers are now buying 21 percent of their wearable items online, according to estimates by Cowen and Company, a stock research firm. And according to a different retail research group, 20 percent is the magic number when it comes to identifying the tipping point of goods truly going fully digital.
And Amazon, it seems, is looking to really turn up the heat — the Times reports that it now has a patent in play for an "on demand" clothing manufacturing system that can pump out custom-made items for customers.
“I do think this year is the year apparel eCommerce takes off,” said Cooper Smith, an analyst at L2.
This is something of a change — online clothing purchase has been something of a late bloomer when compared to categories like electronics for the good reason that fit is important — and it is hard to gauge online. But Amazon, in particular, has looked to at least improve that with better photography, so customers can get a clearer idea of what they are buying, and a relaxed return policy that makes it easy to exchange or just be rid of something that does not fit.
Amazon benefits most from any category going online since it currently earns 43 cents of every dollar spent online in the nation last year, according to Slice Intelligence.
And while Amazon probably can't quite dominate clothes the way it came to own, say, books — that doesn't mean it can’t eat up a lot of marketshare in an already fragmented market.
“We look at it as winner take most,” said John Blackledge, an analyst at Cowen. “That’s their game.”