Just days before the eCommerce giant is set to release its quarterly earnings, financial services firm Cowen released a note yesterday (July 20) which announced its prediction that Amazon will take its place as the No. 1 U.S. apparel retailer by 2017, replacing the current title holder Macy’s.
In a note seen by Bloomberg Business, a team of Cowen analysts led by John Blackledge said it estimated Amazon’s U.S. retail apparel gross merchandise value will rise from $16 billion in 2015 to $52 billion in 2020. With the company’s U.S. market share increasing to 14 percent, up from 5 percent, Cowen favors Amazon “comfortably passing” Macy’s in 2017.
Amazon’s apparel and accessories segment is the driving force behind the company’s sales of electronics and general merchandise, which Bloomberg said makes up approximately 70 percent of Amazon’s total revenue.
The note from Blackledge and his associates included additional findings from a recent Cowen survey, which showed Amazon’s apparel segment growth is currently beating out both Walmart and Target.
According to Bloomberg, the note stated the growth has averaged a 29 percent increase year over year for the past six quarters, compared with 3 percent and 2 percent drops reported for Walmart and Target, respectively.
In what may be an even more concerning concept for the established retailers, Cowen’s research found approximately 11 percent of apparel customers at Target and Walmart purchased clothing from Amazon during the first half of 2015, up from 8 percent reported in the first half of 2014.
While Amazon took lots of abuse throughout its recent Prime Day offering, there is an undeniable element of “laughing all the way to the bank” in its Prime Day outcome, which may be why some analysts are still siding strongly with the company’s retail rise.
ChannelAdvisor reported Amazon’s daily sales in the U.S. were up around 80 percent as of 12 p.m. EST on Prime Day over last year’s figures, and sales were up 40 percent in Europe.
Perhaps more important than the one-day sales figure, which some analysts suspect Amazon may have lost money on, Prime Day did what it was supposed to do: encourage more people to sign up for Amazon Prime.