The ‘Amazon Effect’ Is Crippling Department Stores

Amazon is fast on its way to becoming the number-one apparel retailer in the U.S. while stores like Nordstrom and Macy’s continue to struggle.

May 13, 2016

Is Amazon the new desirable retailer? Photo: Andrew Burton/Getty Images

Is Amazon the new desirable retailer? Photo: Andrew Burton/Getty Images

Many long-standing retail companies, from department stores to teen brands, are feeling the pain of the changing retail landscape, a phenomenon now being dubbed the “Amazon effect.” On Friday, Nordstrom reported a staggering 64 percent drop in net earnings for the first quarter of its fiscal year. “Clearly Amazon is a major factor in our industry,” Co-President Pete Nordstrom tells WWD. “They’re a formidable competitor. Our traffic is down. If you look at the brick-and-mortar part of our business, that demand didn’t just entirely go away[…] The difference is the online business — Amazon.” Continue reading

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