Best Buy and Macy’s Ramp Up Same-Day Delivery in Race With Amazon
Best Buy (BBY, +0.44%) and Macy's (M, +3.03%) are each expanding their same-day delivery service to more markets as they look to keep Amazon.com (AMZN, -0.24%)and other rivals at bay.
The two retailers each announced on Thursday the expansion of the number of markets where they are respectively offering customers the options to receive online orders on the day they were placed in a bid to protect their recent strong e-commerce growth.
In the case of Best Buy, the electronics retailer is more than doubling the number of metro areas that will have the service to 27 and the company said in a blog it expects same-day delivery to be available in at least 40 cities in time for the holiday season, by far Best Buy's most crucial time of the year.
Best Buy will also sharply reduce the service fee to $5.99 from $14.99 and is adding more products to the merchandise available for same day delivery. Earlier this week, Best Buy reported strong results for its most recent quarter, including a 31.2% jump in online sales.
As for Macy's, the struggling department store chain is adding 15 more markets to where it offers same-day delivery to 33, while its sister chain, Bloomingdale's is adding two. The fee will be $8 for online orders of at least $99 at Macy's and $150 at the upscale Bloomingdale's.
The efforts by both chains, which are both in the top 10 largest online retailers in the United States, are crucial as they and their brick-and-mortar peers look to compete with Amazon, but also with the likes of Walmart (WMT, +0.36%) and Target (TGT, +3.12%), which are speeding up their own delivery offerings.
In the case of Amazon, the leader in speedy delivery, members of its $99 a year Prime program, can get delivery within two hours through its Prime Now service. Same-day delivery is on its way to becoming a basic option shoppers expect, adding to the pressure on companies like Best Buy and Walmart.
Both companies will be working with Deliv, a Silicon Valley company that works closely with retailers so that shoppers can put in their orders directly on those companies' e-commerce sites and apps and track their packages. Best Buy will also work with another company to provide the service in another 10 markets where Deliv isn't available.
Best Buy started testing this service in 2014, while Macy's did in 2015. Both companies have shifted much of their capital expenditure budgets to beefing up e-commerce.