As retailers across categories fawn over shares of millennial spending power, new insight from market research and analytics firm Slice Intelligence indicates that, in terms of apparel market sales, one online retailer appears to have already won the battle. Here are some of the key findings.
First, millennials reportedly accounted for the largest share of online apparel revenue in both 2015 and 2016 across generations — 35.2 percent in 2015 and 34.6 percent in 2016. In 2016, the spending influence from both baby boomers and the silent generation grew a bit in online apparel sales, though millennials still took the majority share.
As for where millennials spend their money, it turns out that Amazon saw the most online clothing sales to millennials. The data from Slice indicated that the 18-to-34-year-old demographic purchased 16.6 percent of its clothing on Amazon, double the online millennial purchase volume of runner-up Nordstrom, which saw 8.1 percent of online apparel sales go to millennials.
Old Navy (5.1 percent), JCrew (4.2 percent), Macy’s (3.6 percent) and Victoria’s Secret (3.6 percent) also placed high among online retailers where millennials spend their apparel budget.
In fact, Amazon is expected to become the biggest clothing retailer in the U.S. in 2017, said GeekWire. According to a report by Cowen & Co., Amazon’s clothing and accessory sales are projected to rise some 30 percent this year to hit $28 billion.
Amazon’s share of millennial apparel dollars could inflate even further in the next few years as the online retail giant continues its private-label push.
Amazon has been building out its private-label offerings for apparel since at least the end of 2015, with the most recent development coming earlier this year when Amazon looked to be preparing to launch its own line of workout clothes.
It is likely Amazon will continue to build out its private-label offerings as a way to fill in gaps in offerings from suppliers (turned competitors) and rake in the revenue from the additional sales. Legacy retailers are sweating thinking about what Amazon had done to book sales. If anything, retailers in Amazon’s private-label path should some extra competition.