Amazon AMZN continues to make strong efforts to bolster its e-commerce business, which contributes maximum to its revenues.
Its deepening focus on expanding its offerings under various categories like electronics, books, grocery and especially fashion among others has been a key factor for a while behind growth of the online retail business.
Moreover, Amazon is leaving no stone unturned to bolster its fashion retail division Amazon Fashion on the back of its robust strategies and innovative technologies. This is evident from its latest introduction of an augmented reality (AR)-powered interactive mobile experience, namely ‘Virtual Try-On for Shoes’.
Notably, the new feature enables customers to check the look of a pair of shoes on them virtually from every angle just by tapping the “Virtual Try-On” button on the product detail page and then pointing the camera at their feet.
Further, they can check different colors of the same product by using the carousel. Also, they can take a picture of the virtual look of the chosen shoe and share it by using ‘Share’ option.
Virtual Try-On for Shoes is available for various brands like New Balance, adidas, Reebok, Puma, Superga, Lacoste, Asics and Saucony to name a few.
We note that the latest move is likely to offer an enhanced experience to the online shoe shoppers, which in turn, will expand the customer reach of various sellers on Amazon.
At present, the feature is available in the United States and Canada for customers using the Amazon shopping app on iOS.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Amazon Fashion Gaining Traction
Amazon continues to gain strong traction from the fashion retail on the back of its growing fashion shopping experiences.
Moreover, its solid Prime Momentum remains a major positive. AMZN’s strong focus toward enhancing Prime service with the help of exciting discounts and expanding ultrafast delivery services remains a major positive behind its growing trajectory in the fashion retail space.
Apart from the latest launch, Amazon offers a shopping experience called The Drop, which provides access to limited-edition street-style collections designed by fashion influencers.
AMZN also offers Prime Wardrobe — “try before you buy” facility, which enables customers to place the order online from a separate section of Prime Wardrobe on its site. Further, the shoppers of Prime Wardrobe get an option of a huge collection of clothes, shoes and accessories of numerous brands.
Amazon offers a service called Personal Shopper by Prime Wardrobe, which provides style inspiration and recommendations to deliver a better shopping experience.
We believe, the above-mentioned growing endeavors will help Amazon penetrate rapidly into the booming online retail market for fashion.
Per Statista’s recent data, the fashion e-commerce market in the United States is expected to generate revenues of $0.99 trillion in 2022. Further, it is anticipated to reach $1.36 trillion by 2025, seeing a CAGR of 11.2% between 2022 and 2025.
Apart from online efforts, Amazon recently opened its first clothing store Amazon Style, in Glendale near Los Angeles, CA, which was announced at the beginning of this year. The new store stocks clothing from a wide range of brands, including Levi’s, Tommy Hilfiger, Lacoste, Steve Madden and Champion to name a few.
It leverages the Machine Learning (ML) technology to offer customers an enhanced and smart shopping experience by helping them find the item they are looking for.
Wrapping Up
Amazon’s vast and efficient e-commerce platform remains its key driver in the retail industry. Its online retail segment is constantly intensifying the competition for the brick & mortar stores and traditional retailers.
However, a slowdown in online shopping activities compared to last two years as a result of normalization toward the pre-pandemic levels, is acting as a major headwind to AMZN, currently.
Notably, its online store sales dipped 3% from the prior-year quarter’s level to $51.1 billion in the first quarter of 2022.
Additionally, Amazon is bearing the brunt of inflationary pressures, elevated staffing costs and supply-chain disruptions.
All these are making investors grow bearish on the stock. Amazon has lost 34.3% on a year-to-date (YTD) basis.
Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the retail-wholesale sector are AutoNation AN, Dollar Tree DLTR and Solo Brands DTC. While AutoNation and Dollar Tree sport a Zacks Rank #1 (Strong Buy) each, Solo Brands carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AutoNation has rallied 5% YTD. The long-term earnings growth rate for AN stock is currently projected at 24.74%.
Dollar Tree has rallied 13.7% YTD. The long-term earnings growth rate for DLTR stock is currently projected at 15.54%.
Solo Brands has declined 69.3% YTD. The long-term earnings growth rate for DTC stock is currently projected at 16.74%.
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