This past quarter, world-known department stores, Macy’s, Kohl’s and Nordstrom have encountered some of the lowest quarterly sales since the recession. Chief executive and financial officers have been researching as to why sales have plummeted. The majority of companies have realized that Amazon has gained a large majority of the apparel market due to its ability to use competitive pricing as an advantage. Department stores have gone so far as to invest a large percentage of the company’s profit into digital and web design in order to partake in the e-commerce market.
Professional analysts have determined that Amazon is the second largest apparel retailer, second only to Walmart, owning seven percent of the apparel market, and predicts Amazon to be in the lead with an outstanding 20% by the year 2020. In regards to market share and sales for the brick-and-mortar stores, shares of Kohl’s dropped by nine percent, shares of Nordstrom fell by 17%, shares of Sears fell by 11%, causing them to close 78 stores. These four large department stores have lost more than 40% of their value in the past year. All in all, Amazon is doing an impeccable job at marketing and directing the e-commerce industry for apparel. What some call the “Amazon effect”, may forever disrupt the traditional, department store based apparel industry.