The Macy’s Advantage: Secrets to Same-Day Delivery, Omnichannel

Last month, Macy’s CFO Karen Hoguet explained how the company’s retail network gives it an advantage in the ever-more-crowded same-day delivery arena, as well as in omnichannel fulfillment.

“I think our store footprint gives us a huge advantage, given where the Macy’s stores are located and the technology that we have built and have in place to utilize our stores to fulfill internet orders,” Hoguet said. “We are working on take advantage of that as we go forward.”

In early November, the retailer began piloting same-day delivery in Chicago, Houston, Los Angeles, New Jersey, San Francisco, San Jose, Seattle and Washington, D.C. The service is provided by Deliv, a same-day delivery provider backed by mall property groups General Growth Properties, Macerich, Simon Property Group and Westfield Corporation.

Macy’s is charging $5 for same-day delivery of online orders over $99, while smaller orders are subject to standard shipping rates plus an extra $5. Customers must place their orders by 1 p.m. Monday through Saturday and by 11 a.m. on Sundays, and can select a two-hour window for delivery.

In terms of omnichannel execution, the retailer continues to make progress, offering ship-from-store and in-store pickup at all 725 of its full-line stores. “There is no question that we are executing omnichannel better this year than last year and we will do better next year than this year because it really is changing some of the fundamental ways we do business,” Hoguet said. “We’ll also manage it in a way that makes it more profitable. Clearly we are spending a big percentage of our capital budget on technology and supporting this (omnichannel) business, but frankly I don’t know how you can compete as a retailer today without doing so.”

Many top retail brands are pursuing omnichannel strategies to attract modern consumers. A lot of progress has been made in online business growth and flexible fulfillment, but few brands have managed to transform their organizations to make their omnichannel strategies sustainable — not to mention profitable. Join a panel discussion, “Optimizing Omnichannel: Lessons and Insights from Industry Leaders,” at the 2015 NRF Big Show to learn what top retailers are doing to reinvent their operating model to make omnichannel not just a reality, but streamlined and cost-effective, too.

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