Amazon will pass Macy’s as the number-one US apparel retailer in 2017, and it will become the number-two US consumables retailer by 2018. Those are the bold predictions published in a new report by Wall Street firm Cowen and Company.
And while it says Amazon is winning in ecommerce and expects that to continue in 2016, the firm prudently states its estimates could be too conservative or, it notes, Amazon could lose ecommerce market share, could see a dramatic slowing in unit growth, or could experience a slowdown overseas.
So who is positioned to possibly take ecommerce market share away from Amazon? “Either eBay or a niche etailer,” Cowen writes.
But that may be unlikely – its “base case” assumptions are a 21% annual growth between 2015 and 2020 for Amazon with expanded share in global retail ecommerce, accomplished “by expanding products and geographies while growing peripheral businesses.”
Cowen estimates Amazon’s US retail Apparel GMV will grow from an estimated $16 billion in 2015 to $52 billion in 2020, with US market share rising from 5% to 14%. The firm lists the drivers of its winning strategy in the apparel category:
- Rising 1P brand relationships;
- Large selection (SKU) advantages;
- Best-in-class fulfillment;
- Prior acquisitions and a multi-URL approach;
- Investments in technology, apparel imaging, among other things.
While Wall Street isn’t likely to be concerned, those first-party brand relationships don’t always bode well for third-party sellers who worry about marketplaces giving preference to their big-name partners and becoming their intellectual property “police.”
Cowen and Company notes that Amazon Prime will drive continued ecommerce growth for the company and believes that Amazon Prime can continue to drive penetration of US households over time. In its own studies, it has seen Amazon Prime Households more than double from 18% in December 2012 to about 39% in November 2015.
With all the positivity about Amazon, do you think eBay – the only company mentioned in the report as a possible threat – can take market share from Amazon?
Comment on the AuctionBytes Blog.