Amazon

Amazon to Overtake Macy’s in 2017

July 23, 2024         By: Steven Anderson

Anecdotally, we’ve known for a long time that online retailers have been making major moves for years and gaining a new level of prominence that no one really saw coming. But a new note from Bloomberg Business detailed just how big online retail is getting…big enough to challenge some of the biggest names in brick and mortar retailing.

The Bloomberg Business note, which came out just a little ahead of Amazon’s quarterly earnings report, noted that by 2017, Amazon would likely become the number one apparel retailer in the United States, taking the crown right off the head of no less than Macy’s itself.

The note was said to come from a roster of Cowen analysts, led by John Blackledge, that estimated Amazon’s gross merchandise value for U.S retail would rise to $52 billion by 2020, a huge spike from its 2015 value of $16 billion.

That’s going to drive Amazon’s market share to 14 percent from 5 percent, and that’s also going to be sufficient to “comfortably” pass Macy’s figures.

The apparel and accessories market segment is reportedly the major force behind electronics and general merchandise, which reportedly makes up about 70 percent of total revenue for Amazon.

Amazon’s growth in the apparel field is reportedly passing both Walmart and Target, with reports suggesting that their customers are also frequently shopping through Amazon. This has increased from 8 percent in the first half of 2014 to 11 percent in the first half of 2015.

When an online retailer is not only holding its own against brick and mortar retailers, but also clearly surpassing them in some ways, it’s signaling a fundamental change in the retail landscape, and also a major opportunity for mobile payments.

We’re looking at a field in which an online retailer-readily accessible from most any mobile device-is just as, or even more popular than its physical retail competitors.

It’s important to note that this is outward projection for the next couple of years, and so it could be that Cowen’s predictions ultimately fail to come to fruition. However, even if these don’t prove to be the case, the fact that Amazon could even get this close is an outstanding feat in its own right.

There was likely little doubt on any front that online, mobile capable retailers were substantial threats to the brick and mortar segment for a long time. Now, any doubt left must be dispelled, and if retailers haven’t already been working to counter the online and mobile threat, it may be too late.