A new report by the consulting firm, Kantar Worldpanel, says that if retailers such as Walmart and Amazon keep their holiday sales low, the apparel market could be impacted by “Black Friday”.
According to the report, which looked at online sales data from the second quarter of 2018, retailers could see a 30 per cent decrease in sales in the second half of the year.
Kantar said that, in the period, online sales could be between 10 and 25 per cent lower than they were in the first half of 2018.
Amazon is expected to lose around $5 billion from Black Friday sales, the report says.
“The impact will be greatest in retail and online sales, and could affect the overall retail market as well as the overall consumer sentiment,” said Simon Huggins, vice president of Kantar Retail and Business Analytics.
It’s a “major concern”, he said, because retailers are trying to cut costs, and Amazon is “not just going to get away with it”.
Amazon has already been under fire for its holiday-related deals, such as $5 off the price of a $100 bag if you buy two items from the retailer’s online store, or $10 off the sale of a pair of jeans if you spend $500 on a pair.
Amazon has also been criticised for its high prices for its own products, such a $99 dress that is made in China, or its $49.99 dress for women, that is available in Australia, and can only be purchased in the US.
It is also being criticised for offering lower prices to its online customers, particularly for clothing, shoes and accessories.
Kantard said that online sales are also the “greatest driver” of the US apparel market.
However, it said that sales growth in this market has been slower than it expected.
“There are several factors, including low-price competition from online retailers, and the ongoing impact of the Black Friday event, that could result in lower-than-expected growth,” it said.
The company is also facing a number of other challenges in the apparel sector, including the launch of a new website in 2018, as well other initiatives such as the launch and rollout of its Amazon Prime membership program.
“Amazon Prime will help drive continued expansion of Prime membership, with additional incentives for Prime members to shop in more stores, Prime Video and Amazon’s Kindle Unlimited service,” it added.
Amazon has been criticised recently for its low prices and its use of its “Buy More” service, which gives customers a discount on their orders.
The report found that if the companies keep their business models, they could be able to absorb the impact of Black Friday.
The company, however, is also planning to invest in new stores, so it will have a lot more time to adjust to the new shopping environment.
“While the retail sector has been hit hard by the Black November event, the impact on the apparel and accessories industry is likely to be mild,” it noted.
“The impact on other segments will be more severe.”