Amazon's U.S. Fashion website offers more than 880,000 products across almost 2,800 brands for both men and women. But a majority of the marketplace's sales are still from third-party sellers, as just 13.7% of products are sold by Amazon. And Amazon's focus for its first-party inventory appears to be on higher-end fashion, according to recent aggregated data.
In addition, data revealed that Amazon' 834 private-label products on the site tend be clustered in specific categories, reflecting a segmented approach.
The recently published report says that shoppers feel a greater reassurance on product authenticity, shipping and return charges and return policies when they buy direct from Amazon than from a third-party seller, as 38% of Amazon apparel shoppers prefer to buy direct from Amazon.
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The research indicates that Amazon has the ability to strengthen its own brands and loyalty through offering both Prime shipping and a greater selection of first-party inventory.
Almost 80% of Amazon's private-label apparel is womenswear, and the biggest label is Lark & Ro. The Amazon clothing lines tend to be clustered in categories. For example, Lark & Ro is primarily dresses, while Goodthreads is focused on men's shirts.
"One interesting finding is just how much of the total offering is accounted for by a small number of brands," Deborah Weinswig, founder and CEO of retail think tank Coresight Research (formerly Fung Global Retail & Technology), said. "The top 30 brands account for 30% of all clothing products listed on Amazon Fashion. The remaining 2,768 identified brands make up the remaining 70%."
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So what is keeping Amazon from expanding its base of private-label fashion products?
"Amazon is pursuing a highly segmented approach to its private labels: the company tends to focus each of its own brands on a particular consumer type or product category. Such segmentation may limit opportunities to grow the ranges very quickly as compared to Amazon taking a more generalist approach to its private-label offering," Weinswig said.
Despite this slow approach, Weinswig says she is confident that there is still a lot of opportunity for growth in Amazon Fashion, due to three key findings:
- First, Amazon Fashion is still heavily reliant on third-party sellers. As many shoppers feel a greater reassurance on delivery and return policies when buying from Amazon, the company could expand its first-party listings as it continues to strengthen its relationship with major brands.
- Second, Amazon’s private-label products account for only 834 out of almost 1 million on the site, indicating that the retailer has much room yet to run in private-label apparel.
- Third, more products can be brought onto the site under existing brands. Almost 1,400 brands list fewer than 50 products each, suggesting that Amazon Fashion has further opportunity to grow its already substantial brand offering.
However the marketplace chooses to grow its site, it's likely to have a major impact on the fashion retail industry.
"First, as it builds out its branded offering, the USP of multibrand retailers such as department stores gets further depleted: shoppers will have more options when looking to buy branded apparel, and this will pressure long-standing multibrand retailers, including exerting downward price pressure," Weinswig said. "Second, we expect to continue to see private-label development from rivals as they seek to compete with Amazon."