According to Business Insider, Amazon is now offering a larger selection of department store staples like Calvin Klein and Tommy Hilfiger than any actual department stores.
Of course, the department store struggle isn’t new (see the Sears article from yesterday). What is, However, is the number of (former) department store brands that are “moving away from this channel to protect their brand image” and, embracing Amazon in its place.
As the story reported, brands like Michael Kors, Ralph Lauren, and Coach, “have been vocal about pulling back from department stores in order to protect their brand image after finding that products have been heavily discounted.”
In fact, Coach has already closed 25% of its 1,000-plus wholesale locations and implemented “a ‘reduction in markdown allowances’ to preserve the brand’s status after being deemed too ubiquitous and promotional.” And last year, Ralph Lauren “pulled stock from 20-25% of department stores… saying that discounting was damaging to the brand.”
Meanwhile, “Amazon has been growing its apparel business exponentially,” Business Insider noted, and “analysts say it’s on track to overtake Walmart as the leading US apparel retailer by the end of 2018.” (For those of you playing the home game, “the end of 2018” is exactly two-and-a-half months away. Crazy, right?)
And while Amazon’s increased private label output has definitely played a role in that growth, equally helping matters are the myriad new distribution deals the retailer has been able to make with major brands – including, most recently, Nike and J.Crew. Two very big gets for a company that “respectable” brands once avoided like the plague.
Department Stores we hardly knew ye.
You can read more about it at Business Insider.
