A RBC Capital Markets survey of 2,000 online shoppers found that apparel — both clothing sold directly by Amazon and from third parties — was the most popular category on Amazon, with 57 percent of respondents having purchased apparel on the platform and 47 percent planning on spending more on the category.
Electronics ranked as the second most-popular category, with 43 percent of those surveyed having turned to Amazon for a purchase. Grocery, an area of special interest for Amazon given its $13.7 billion deal to buy Whole Foods, was the least-purchased category, at 7 percent.
RBC analyst Mark Mahaney said, “Apparel’s significant lead over other categories is a bit surprising, but apparel has been one of the fastest-growing areas in all online retail, according to comScore data.”
But Amazon is still trying to master the more fashionable side of the business and exploring seemingly every avenue to grab more market share — from a live-streaming shopping show that was shuttered to private label to a patent for automated apparel production.
Mark Parker, chairman, president and ceo of Nike, told analysts: “What’s most important to us is that we have the opportunity to elevate how the Nike brand is presented on the Amazon platform. And that includes the quality of the product information and providing a simple experience for the consumer.”
Nike-branded styles have long been available on Amazon through third-party sellers, a dynamic that has led to a less-than coherent presentation that Nike is now looking to clean up.
Many brands have been reluctant to deal directly with Amazon — sensing a competitor — but have not been able to look beyond the opportunity represented by its sheer size and penetration in online commerce. Amazon’s overall product sales increased 19.4 percent to $94.7 billion last year as its service sales, which include commissions and fees paid by third-party sellers and revenues from its web services business, rose 49 percent to $41.3 billion.
Instinet analyst Simeon Siegel noted that “selling directly through Amazon should provide Nike — and any other brand that chooses to make such a move — greater access to Millennials.”
Siegel added: “The fact is Amazon is already becoming an important ‘plug’ to lost wholesale distribution, with many brands already selling directly through Amazon and all companies having at least a ‘few’ products sold by third parties [a search for Nike on Amazon drives greater than 50,000 total results], which suggests that synching up with Amazon may not only represent a potential sales opportunity, but it could very likely stem cannibalizing sales from third parties and counterfeiters.”
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