As the competition for delivery service dominance heats up, a Macy’s official confirmed the retailer is set to expand its own same-day delivery offerings to additional U.S. markets this summer, Reuters reported yesterday (July 22).
The nation’s largest department store chain, which currently offers same-day delivery in eight markets, is planning an aggressive expansion with the help of delivery startup Deliv, which leverages a fleet of crowdsourced drivers to pick up and deliver online orders from retailers, the Macy’s official told Reuters.
According to the official, Macy’s plans to offer its same-day delivery service in more markets has the potential to put the company ahead of Amazon – which now reaches 14 markets. Currently, Macy’s same-day service is available in Houston, San Francisco, San Jose, Seattle, Chicago, Los Angeles, New Jersey and Washington, D.C.
The announcement comes on the heels of a recent prediction from analysts at financial services firm Cowen that Amazon will become the No. 1 U.S. apparel retailer by 2017, “comfortably passing” Macy’s for the top spot.
The team of Cowen analysts, led by John Blackledge, said it estimated Amazon’s U.S. retail apparel gross merchandise value will rise from $16 billion in 2015 to $52 billion in 2020, with the company’s U.S. market share increasing to 14 percent, up from 5 percent.
But when it comes to same-day delivery, Macy’s may just have a leg up on the competition.
As of May 2, the retailer operates 886 stores throughout the U.S. from which it could potentially deliver products, resulting in packages having a much shorter distance to travel as compared to the 50 fulfillment centers and distribution facilities Amazon utilizes, Reuters explained.
“If you need something today and you are in a market that doesn’t have same-day delivery yet, the online pick-up and store helps with that or even next day. And by having inventory closer to the customer, that’s a huge competitive advantage for us in terms of satisfying what the customers are looking for. So I see that’s going to continue to be important and more obviously focused on that,” Macy’s CFO Karen Hoguet said earlier this year during the company’s fourth-quarter earnings call with analysts.
While Amazon has confirmed more than a million products are available for customers through its same-day delivery service, Prime Now, brick-and-mortar retailers could still have a fighting chance against the eCommerce giant.
“It’s very hard to compete with Amazon, but traditional retailers have an advantage in that they already have all of their inventory in place five miles from 90 percent of their purchasing population at their stores,” Deliv CEO Daphne Carmeli told Reuters.
“This is one of those opportunities to out-Amazon Amazon,” she said.