Will same-day delivery keep Macy’s ahead of Amazon?
A recent note to investors by Cowen analysts includes a prediction that Amazon.com will become the leading apparel retailer in the U.S. by 2017, topping Macy’s by a comfortable margin. Time will tell if the prediction is accurate, but it’s clear from Macy’s actions, including an expansion of its same-day delivery service, that the department store chain isn’t planning on just handing its crown to Amazon.
Yesterday, Macy’s Inc. announced its Macy’s and Bloomingdale’s businesses would expand same-day delivery to nine additional markets beginning this month: Atlanta, Boston, Dallas, Honolulu, Las Vegas, Miami/Ft. Lauderdale, New York City/Western Long Island, Orange County, CA and Philadelphia. With the new additions, Macy’s Inc. will offer same-day delivery in 17 markets total.
"When we piloted same-day delivery in eight markets initially last fall, we learned that our customers appreciate the additional option of having their purchase brought to their home or office in a matter of hours. It is an important part of our value proposition as an omnichannel retailer serving customers who shop our stores and websites whenever, wherever and however they prefer," said R.B. Harrison, Macy’s, Inc. chief omnichannel officer, in a statement. "Our ability to expand same-day delivery is rooted in local merchandise inventories at Macy’s stores, as well as a newly expanded delivery footprint of our partners at Deliv."
The cost for same-day delivery from Macy’s or Bloomie’s is equivalent to standard ground shipping plus a $5 fee on top of it.
The competition for e-commerce dollars is growing more intense and delivery options are often at the center of differentiation efforts. Reuters reported that LaserShip, a delivery contractor for Amazon, expanded e-commerce delivery to five new markets last week.
"Speed is continuing to be the driving force and what everyone wants is fast and free shipping," Josh Dinneen, a senior vice president for LaserShip, told Reuters.
According to the Cowen note (via Bloomberg), Amazon’s share of the U.S. apparel market will grow from five percent this year to 14 percent in 2020.
- Cowen: Amazon Will Be the No. 1 U.S. Clothing Retailer Very Soon – Bloomberg
- Macy’s and Bloomingdale’s Roll Out Same-Day Delivery to Additional Markets – Macy’s, Inc./Business Wire
- Macy’s expands same day delivery to 17 cities as it challenges Amazon – Reuters
Do you see it as inevitable that Amazon will top Macy’s and become the leading apparel retailer in the U.S.? How important is the delivery component for Macy’s in its competition with Amazon for clothing customers?