News Feature | September 8, 2014

Macy's Tests Same Day Shipping

Source: Innovative Retail Technologies

By Brianna Ahearn, contributing writer

Macy's Same Day Shipping Experiment

Amazon and Google are in a race to win customers with same day shipping, but a new competitor is entering the battle. Macy's has launched its own same day shipping offers, testing the service in four markets, reports Cincinnati Business Courier. Macy's recentlylaunched a digital wallet option, My Wallet, for customers, and had been experimenting withsame day delivery in March. The retailer had implemented the service as part of its omni-channel strategy and was trying to compete with Amazon.

Macy's click-and-collect service was expanded in March to over 500 stores throughout the country. Retail analysts assessed the strength of click-and-collect and found that itspresence gave Macy's a better look at in-store offerings. The retailer can monitor the click-to-collect orders and monitor the data to see what adjustments they should make to in-store merchandise assortments, such as clothing, electronics, or kids items, based on the popularity. Now Macy's has partnered with FedEx, UPS, and eBay to offer same day shipping. The company already offers customers shipping from Macys.com direct to their home, as well as same day pickup for items bought online, but opening up same day shipping makes Macy's a sizable competitor to Amazon.

The changes in store level fulfillment will be supported by new fulfillment centers. The direct-to-customer orders originate from an Arizona center or one of Macy's 500 stores with fulfillment capabilities, but now the retailer has increased options for consumers. A $1.3 million fulfillment center is planned for Tulsa County, Oklahoma, with operations expected to begin in 2015.

“The important thing is the industry is trying very quickly to move toward faster deliveries,” says Terry Lundgren, Macy's CEO.

Macy's is likely to beat Amazon's attempts at same day delivery with “delivery drones” as well as Google's race to match Amazon with the same service. The retailer is also remodeling many of its stores to improve customer experience, beginning with the Brooklyn location.

Macy's had better than expected profits in each of the first two quarters. Analysts believe the good performance is being driven by Macy's efforts to improve the customer experience in-store and online. The long-term planning in inventory management and order fulfillment are also positive signs for Macy's.