Amazon Gives a Stellar Performance for Its 2Q15 Earnings
Macy’s to offer same-day service in 17 cities
In an attempt to compete against Amazon’s (AMZN) dominance in the online retail space, Macy’s (M) announced the launch of its same-day delivery services in 17 markets in the US.
The retailer plans to achieve this via a delivery service called Deliv. The service is similar to Uber and employs people who are responsible for delivering customers’ orders from the store directly to the shipping address.
Amazon’s growing presence in the retail space
According to a report from the Cowen Group, Amazon’s (AMZN) growth in the apparel purchase market could see it replacing Macy’s (M) as the number one apparel retailer in the US. Amazon’s large product selection and fulfillment strategies are driving its growth in this market.
Amazon is aggressively working toward finalizing partnerships with fashion brands such as Gucci, Kate Spade, and BCBG. The objective is to offer ~343,000 items from leading brands that sell directly to the consumer.
According to the Cowen report and as the chart above shows, Macy’s offers 85,000 apparel items, Walmart (WMT) offers 292,000 items, Nordstrom (JWN) offers 85,000 items, and Target sells 35,000 apparel items, .
Macy’s apparel sales were five times greater than Amazon’s just four years ago. The main reason for Amazon’s popularity, and why it poses a possible threat to retailers such as Walmart and Target, is the variety of apparel on Amazon. An increased apparel selection should boost Amazon’s gross merchandise volume, which should boost Amazon’s revenues in turn.
You can get exposure to Amazon by investing in the Consumer Discretionary Select Sector SPDR ETF (XLY), which has 6.1% of its portfolio invested in Amazon.
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