Back to the Future: Macy's Expands Same-Day Delivery Service

Retail

Published: August 31, 2017 12:00 pm

Last Updated: January 12, 2020 8:36 am

Into the 1970s, many large department stores offered in-store shoppers same-day delivery of their packages at no extra charge. By the end of the decade, that practice had become a piece of department store history.

Macy’s Inc. (NYSE: M) put a modern spin on customer delivery beginning in 2014 by offering same-day delivery on items ordered online in eight U.S. cities. The company expanded the service to a total of 33 cities last year, and this morning announced that the service will be available in 15 more U.S. cities beginning this fall.

The fee for the service is $8 for online purchases that meet the $99 free shipping threshold at Macy’s stores and $150 free shipping threshold at Bloomingdale’s. For items that don’t meet the thresholds, standard shipping fees plus the $8 same-day fee apply.

A Macy’s executive said:

We’re excited that we can leverage the stores we have as fulfillment centers to power same-day delivery, closing the gap between customers and products for more of our shoppers just in time for the holidays.

While using stores as logistical centers may be appealing to retailers — Best Buy Co. Inc. (NYSE: BBY) today announced an expansion of its same-day delivery service to an additional 13 cities — shoppers place this service near the bottom of their reasons to shop at particular store.

Retailers are not wild about same-day delivery either. As of last May, only 34% had implemented same-day delivery service and just 8% said that the service is working well.

Consumers may be conditioned by now to get delivery within a few days either for free or for a nominal fee (Amazon Prime). For retailers, same-day delivery is probably a logistical nightmare that costs more than it’s worth. Customers of Macy’s and Bloomingdale’s may like the service and be willing to pay for it, but it’s unlikely that Target or Walmart or Ross Stores customers are willing to do so.

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