Same-Day Delivery Has Given Target a Major Boost — Can It Do the Same for Macy’s?

In a fiercely competitive retail landscape, convenience is one selling point that can help companies get ahead. Target has reaped the benefits of this in recent quarters, with same-day fulfillment services driving the bulk of its impressive digital sales growth.

On Wednesday, Macy’s announced that it will relaunch its same-day delivery program beginning Oct. 1 in 30 markets across the country. The service is free at launch with qualifying orders of $75 or more, and customers will be able to filter available inventory by zip code.

It’s the latest move by the department store to modernize and add value to its fleet of stores, following its 2018 acquisition of the New York City concept boutique Story (whose themed shop-in-shops can now be found in 36 Macy’s locations) and its pilot partnership with the online consignment site ThredUp (now available at 40 locations).

The retailer’s previous foray into same-day delivery kicked off in 2014 serving five markets, and by 2017 it expanded to 33 nationwide. That iteration, though, “was hard to find on the website. It didn’t get a ton of traction,” Jill Ramsey, Macy’s chief product and digital revenue officer, said at the WWD Digital Forum this week. “Over the last two years, we’ve made significant investments in new technology in our stores and on our website that have given us the ability to better serve our customer’s needs.”

Customers who place their order Monday through Saturday by noon local time, or 10 a.m. local time on Sunday, will receive items the same day. Orders placed after these times will be delivered the following day.

Macy’s is hoping the service gives it the same leg up it has for Target.

On the Minneapolis-based chain’s most recent earnings call, CEO Brian Cornell said sales through Target’s same-day fulfillment options — in-store pick up, drive-up and Shipt delivery — have more than doubled in the past year, and together accounted for more than a third of digital sales, up from about 20% last year. “These options offer speed, convenience and reliability,” he said. “And as a result, they are quickly becoming the preferred fulfillment choices for our guests.”

For same-day orders, Target also has the chance to leverage its existing fleet of 1,855 stores across the U.S. and the teams that work there, rather than contending with more expensive distribution-center logistics. As a result, the company said, same-day fulfillment options are the most profitable among its digital offerings.

Macy’s will have to make a similarly concerted effort to invest in this area if it hopes to capture customers’ attention. But if it succeeds, it could pay dividends for the department store in customer loyalty and, eventually, improved margins.

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