Customers think positively of Amazon (original) (raw)

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• Amazon does not have any kind of socioeconomic stigma around shopping on the website.
• This enables it to attracts customers across the economic spectrum.
• This is an "underappreciated factor" for selling certain goods, especially clothing and fashion items.

Amazon's reputation is one of its strongest attributes — and that could represent trouble for the competition.

According to research by brokerage firm Instinet, Amazon has an "increasingly universal audience," and can attract customers from across the socioeconomic spectrum. There's no "stigma" attached to shopping Amazon like there would be from shopping at a discount retailer.

That advantage is most important for selling things like clothes, which people treat as more personal and are pickier about where they shop for it from.

According to Instinet, that means as Amazon grows its apparel offerings, it can grow them in any direction. It also has a lot more flexibility and can steal sales from other retailers up and down the scale.

This advantage is unique among its most powerful competitors. Instinet notes that means Amazon will have a broader appeal than giants like Walmart and Macy's.

Amazon's advantage bears out in other research as well. In a survey by Morgan Stanley's Alphawise earlier this year, Amazon had a 61% positive customer sentiment score, which means that surveyed consumers saw the brand as being "really on the way up" or "somewhat on the way up." That's an increase of 14%.

As Amazon grows its apparel business, it will need to leverage this advantage against its still-formidable competitors. Currently, Amazon sells more clothing that are considered essentials, like socks and underwear, than other items.

It's building up its other offerings through partnerships with companies like Nike. Amazon has also been ramping up its development of private brands. One of its latest is a sportswear brand, which will reportedly be made by the same company that manufactures apparel for performance brands like Lululemon and Nike.

Amazon is expected to pass Macy's as the US' largest apparel seller this year, according to a Cowen & Co. note to investors from earlier this year. Its clothing and accessory sales are expected to grow nearly 30% next year, to $28 billion. Currently, Amazon claims only 6.6% of the apparel market, but that is expected to increase to 16.2% in the next five years.

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