Fashion Sellers Reel as Amazon Aims at Next Retail Target

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After Amazon decided to enter physical retailing stores by gaining more than 400 Whole Foods stores, the company decided to enter fashion retailing. Amazon is conscious of one problem in online fashion retailing, which is online buying customers are struggled into choosing the size. Different brands have their different range and standard of sizes, so it becomes more difficult for online shopping customers to choose the sizes. When the products are not fitted for the customers, they have to spend time to return the products. Thus, Amazon sets up the latest and convenient service, which is customers can try the products at home before purchasing them. In other words, customers could try the size like in-store shopping. It is very obvious that the decision actually has shocked the fashion retailing, which results slumping the shares of retailers. Ascena retai’ stock was downed 0.16, and J.C.Penny’s stock was downed 0.28 and so on. Wells Fargo analyst Ike Boruchow said on Tuesday, the service is “another potential nail in the coffin for the department-store sector.”

Moreover, Amazon might start selling Nike shoes online by its own sites. It is apparent that shoe-retailers are averse to the decision. The fact is that the stock of Foot Locker Inc. plunged as much as 11 percent, Finish Line’s stock was decreased 5.9 percent, and Dick’s Sporting Goods Inc. was downed more than 9 percent on Wednesday, 21st June. Besides those U.S. retail companies, it also has affected other countries. The shares of European sellers Sports Direct International Plc and JD Sports Fashion Plc were plunged less than 1 percent on earlier Thursday, 22nd June.

Matthias Hanke, a consultant at Roland Berger, said that “Especially in the lower and medium-priced segment, retailers and brands without a polished strategy to sell through all channels will have a harder time making money in the future.” The service that Amazon sets up actually moves the brands forward and decreases the returned products, which could increase net sales and gross margin. For department stores, customers who use the Amazon to buy apparels could get increasing of brands assortments rather than individual department store at one specific location, and customers could purchase abundant products through free delivery. Nevertheless, the service may not fit into fast fashion. RBC Capital Markets analyst Richard Chamberlain said by email, “fast fashion is not an easy category for brands to sell on Amazon‎ as brands have to pay a lot or earn their way to achieve a prominent position on Amazon but this doesn’t work so well with fast-turn products.” In other words, fast fashion does not have time to let customers try the size before purchasing them because the service requires time.

I am Fashion Merchandising major and Business Administration minor at University of Delaware. I am going to graduate at the end of 2017. I am planning to find my careers in New York city after graduation and reach the degree of graduate in the next few years for my next step. It makes me excited to know and enter the fashion industry, and I will dramatically pursue it in the future.

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