Amazon has emerged as the largest clothing retailer in the United States, surpassing Walmart with a 16.2% share of total apparel sales in 2024.
While this milestone marks a significant shift in retail power, the broader landscape remains highly fragmented. The majority of clothing purchases continue to be spread across department stores, specialty retailers, discount chains, and emerging digital-first brands.
Despite Amazon’s dominance in e-commerce, its influence in apparel is still challenged by the sheer diversity of consumer preferences and retail options.
Amazon Builds Momentum Through Logistics, Technology, and Private Labels
Amazon’s expansion in the clothing sector is driven by a mix of technological investments, a growing portfolio of private-label brands, and enhanced delivery capabilities.
The company has evolved from a general marketplace into a competitive player in fashion, offering in-house lines like Amazon Essentials and The Drop. It has introduced AI-powered try-on tools and expanded influencer-led collections, helping it appeal to a younger, style-conscious demographic.
These efforts contributed to its increased market share, which climbed to 17.7% in the fourth quarter of 2024 before dipping slightly due to post-holiday seasonality.
The retail giant continues to invest in fulfillment capabilities and third-party seller infrastructure, indicating its long-term ambitions in fashion.
Walmart Focuses on Value and Store Traffic Amid Market Share Decline
Walmart, which once led the U.S. clothing market, has seen its share decline from 8.6% in 2020 to 6.4% in 2024.
The company still draws considerable traffic due to its dominant position in grocery retail, which supports its broader merchandise sales. Walmart’s apparel strategy has focused on affordability and accessibility, leveraging collaborations with celebrities and influencers to expand its fashion appeal.
The retailer has also revamped its website and app to provide a more seamless omnichannel shopping experience. Despite the erosion in apparel share, Walmart’s online sales reached nearly $121 billion in 2025, supported by double-digit year-over-year growth.
Its continued investments in store renovations, supply chain automation, and product assortment are aimed at restoring momentum in discretionary categories such as clothing.
Department Stores Reinvent Themselves as Competition Intensifies
Department stores have been under sustained pressure from e-commerce and shifting consumer behaviors, yet some are beginning to stabilize by rethinking their business models.
Macy’s is moving toward smaller, off-mall formats and increasing its focus on digital sales, while Nordstrom is emphasizing convenience with its localized service hubs and a curated premium assortment. Dillard’s has quietly gained ground by catering to middle- and upper-middle-income customers in underserved regions, showing relative resilience among traditional players.
These retailers are also relying more heavily on private-label merchandise to improve margins and differentiate their offerings. Still, the department store category remains vulnerable, particularly among younger shoppers who favor digital-native or fast-fashion alternatives.
Digital-First and Boutique Retailers Capture Niche Segments
Smaller fashion retailers, especially those born online, are capturing consumer attention by focusing on targeted demographics, ethical sourcing, and trend-driven merchandising.
Companies like Everlane and Quince appeal to shoppers interested in sustainability and transparent pricing, while brands such as Fashion Nova and Boohoo cater to fast-fashion consumers influenced by social media trends.
These retailers have embraced direct-to-consumer models and social commerce strategies to scale quickly.
At the same time, brands like Aritzia are expanding both online and through new brick-and-mortar locations, blending digital convenience with in-person retail experiences.
This hybrid approach is increasingly common among niche players seeking to build loyalty while improving profitability.
Brick-and-Mortar Retailers See Continued Relevance
Despite the growth of online shopping, physical retail stores continue to play a key role in clothing sales.
Off-price retailers like T.J. Maxx and Marshalls have maintained strong customer traffic by offering discounted branded merchandise and a sense of discovery. International fast-fashion chains such as Uniqlo and Zara are also expanding their U.S. store footprints, focusing on high-traffic locations and integrating their physical presence with e-commerce platforms.
Other traditional retailers, including Dick’s Sporting Goods and Academy Sports, are benefiting from continued demand for athleisure and outdoor apparel, demonstrating the ongoing viability of well-positioned physical stores.
Clothing Market Outlook Suggests Ongoing Realignment
The U.S. apparel market is expected to reach $1.84 trillion in 2025, underlining the sector's scale and complexity. Online retail will continue to grow rapidly, but it will not eclipse the importance of stores, particularly for consumers who prioritize fit, immediacy, or the in-person experience.
Retailers that embrace flexibility—whether by optimizing logistics, leveraging data to personalize shopping, or blending digital and physical storefronts—are likely to shape the next chapter of competition.
Amazon’s position as the top clothing retailer is a notable development, but the road to dominance in apparel remains crowded and fiercely contested.
