Amazon is building a strong play in activewear as apparel sales grow, although lower-priced basics and men’s continue to dominate sales there, according to a report from brand intelligence firm L2.
In June, 62% of activewear best sellers were men’s products, 32% were women’s, and 6% percent were unisex items, according to the report. However in March, women’s activewear items were just 24% of the firm’s best seller ranking, which the report authors say suggests that Amazon is slowly becoming a more popular destination for women’s activewear.
Despite stepped-up activity from major athletic brands like Under Armour and Nike (which is piloting direct sales on the e-commerce giant’s platform), the top sellers remain lower-priced items like socks and sports bras, which make up 30% percent of activewear best sellers. The average price across all products in the category is just $13.60, according to L2.
Although there are some indications that the super-heated athleisure market is cooling, due to saturation and style evolution, activewear remains a popular market. Lululemon continues to innovate in the space with patented fabrics, and managed to produce a best-selling sports bra despite its $100 price tag.
That's not what's happening for the category at Amazon, at least not at the moment, according to this report from L2. "Despite attracting leading brands like Under Armour, which has a handful of products on Amazon that sell for over $200, the e-tailer’s activewear market is still largely driven by low-price purchases, making it a more effective distribution channel for seasonal sell-through than high-end or in-season merchandise," according to the report. "Brands should consider distributing these more expensive products through direct-to-consumer (DTC) storefronts or their brand website."
That's just what Nike has decided to do, confirming in June that it's piloting a storefront there. That's been bad news for the likes of Foot Locker, Nike, Under Armour and Dick's Sporting Goods, with Hibbet's already expecting its same-store sales to tumble 10%.
For the brands, it's a different story. Adidas, which has seen its fortunes improve since Under Armour knocked it out of the number two spot (behind Nike) in the athletic shoe space, owes a lot to Amazon. The brand has reclaimed that position, thanks in part to a pivot to streetwear and aggressive marketing. It’s also seen five variations of its Women’s Superstar Foundation Casual Sneaker appearing in the six fastest-growing items on Amazon, ranging from 480% to 890% growth, according to a report from One Click Retail.
Amazon gives preferential treatment to first-party storefronts, which includes participation in Prime Day, eligibility for free two-day shipping and a brand page that resembles a direct to consumer website, L2 notes. "These services make first-party sellers’ products more desirable to consumers and boost sales performance," the firm said.
Because brands do see sales from third-party sellers on Amazon's Marketplace, large brands may not get much impact from such a storefront and should request that Amazon limit the number of Marketplace sellers authorized to sell their products, L2 warned. Indeed, it's not clear that even Nike will accrue all that many sales from their Amazon debut because its products are "already ubiquitous on Amazon's website," L2 said. Amazon may be loathe to move too quickly on such a demand, considering that half of the merchandise sold on its site now comes from its Marketplace.
"As of Aug. 1, over 99% of the Nike SKUs on Amazon were listed by third-party sellers," L2 notes. "Part of Nike’s agreement with Amazon was that the retailer would help regulate third-party distribution of the brand’s assortment on the marketplace, but that regulation has not yet materialized based on analysis of over 73,000 Nike products on Amazon."
Still, Amazon's strong and getting-stronger apparel operations spill over into this market, according to report author Cooper Smith. "With an intensified focus on the activewear segment and a new distribution partnership with Nike, Amazon continues to muscle into the apparel and accessories space," he said in an email to Retail Dive. "As the e-tailer gears up to launch its own private label activewear brand, it is more crucial than ever for established players to understand the Amazon ecosystem and fortify their distribution strategies and positioning on the platform."