Amazon's push into selling apparel is drawing the most customers away from Target Corp., according to a new research report.
The survey by Coresight Research (formerly Fung Global Retail) found that 30 percent of respondents who had spent more on clothing from Amazon in the last year said they had switched some of their spending from Target, making it the top retailer to lose out to Amazon in apparel. Macy's and J.C. Penney were also found to be high up on the losing end in addition to Walmart and Kohl's.
“The biggest battles in U.S. retail are often characterized as Amazon versus Walmart and Amazon versus the department stores,” Deborah Weinswig wrote in the report. “However, our research suggests that Amazon versus Target may actually be the bigger battle, at least in apparel.”
At the same time, Target has been working hard in the last year to refresh its own portfolio clothing brands. Last fall, it launched a new men's apparel line, Goodfellow & Co., and replaced Merona with A New Day in its women’s department. Its latest new brand, Universal Thread, which is taking the place of Mossimo, hit stores and Target.com in recent days.
In a statement, Target said it's seeing "clear signs" that its strategy is working based on the strong response to these new brands.
"Our investments in both the brands and a cohesive stores and digital experience that today’s guests expect are delivering results that are consistently outpacing overall apparel industry performance, according to NPD, a leading retail and consumer trends research firm," Target said.
Last summer, I asked Mark Tritton, Target’s chief merchandiser about how worried he was about Amazon’s push into clothing while I was interviewing him for a story about the launch of some of these new brands.
"We keep an eye on them like all of our competitors," he said then.
But he added that Target already has an established customer who comes to it for style. “There’s a real relationship with Target," he said. "We’re more than just an algorithm. We’re an emotion to them.”
Still, various studies have documented the high overlap between people who shop at Target and are also Amazon Prime members. So it's no surprise that Target is one of the most vulnerable to Amazon's expansion into apparel. The online retailer has rolled out a host of its own private labels as well as added more name brands.
Nike, Under Armour and Hanes are the most popular brands sold on Amazon, according to the Coresight survey.
The study found that, as one might expect, those with Prime memberships are more likely to buy clothing from Amazon. In the survey, nearly two-third of Prime members had bought clothing or footwear on Amazon in the last year, compared to 46 percent of non-Prime members.
Amazon does not release sales figures by category so it’s hard to discern its overall sales in apparel, but some analysts had forecast it to overtake Macy's last year as the biggest seller of clothing in the U.S.
The Coresight study suggests that Amazon is now tied with Target as the second-most shopped apparel retailer in the U.S. after Walmart.