A recent note to investors by Cowen analysts includes a prediction that Amazon.com AMZN -1.34% will become the leading apparel retailer in the U.S. by 2017, topping Macy’s by a comfortable margin. Time will tell if the prediction is accurate, but it’s clear from Macy M -1.52% actions, including expansion of its same-day delivery service and other omnichannel initiatives, that the department store chain isn’t planning on just handing its crown to Amazon.
Last week, Macy’s Inc. announced its Macy’s and Bloomingdale’s businesses would expand same-day delivery to nine additional markets beginning this month: Atlanta, Boston, Dallas, Honolulu, Las Vegas, Miami/Ft. Lauderdale, New York City/Western Long Island, Orange County, CA and Philadelphia. With the new additions, Macy’s Inc. will offer same-day delivery in 17 markets total.
In an online discussion last week, many of the industry insiders on the RetailWire BrainTrust saw Amazon as destined for clothing retail’s top spot, but few were ruling out Macy’s completely.
“If my 19-year-old daughter is a harbinger of things to come as it relates to apparel purchases then Amazon will in fact surpass Macy’s,” said Adrian Weidmann, principal at StoreStream Metrics. “The two primary drivers for this prediction are the ease of determining discounted pricing and free shipping and returns. These factors trump in-store purchases by a wide margin. Retailers need to figure out how to compete with this reality.”

“Amazon will top Macy’s, but that doesn’t mean that Macy’s can’t thrive,” said Max Goldberg, president of Max Goldberg & Associates. “Macy’s has led the way in retail omnichannel and in-store use of mobile devices. They should continue their focus in these areas, building strong relationships with customers. Same-day delivery will add to their arsenal. By staying focused on consumer needs, Macy’s will continue to be profitable regardless of the growth of Amazon.”

Terry Lundgren, president and chief executive officer of Macy’s Inc. - Photographer: Andrew Harrer/Bloomberg
“Amazon will win on selection,” said Keith Anderson, vice president of strategy and insight at Profitero. “Macy’s and other retailers can be competitive on convenience with customer-friendly delivery and return policies. Most shoppers still prefer browsing in-store when shopping for apparel. It’s not inevitable, but the competition will definitely raise the bar.”
But whether Macy’s stays on top or comes in at second place, some other BrainTrust members were not so hot on same-day delivery as a key differentiator.
“With all due respect, Macy’s is missing the point here,” saidRyan Mathews, CEO of Black Monk Consulting. “The real ‘power’ of Amazon is the continuing stickiness it manages to create with customers. It keeps inventing more and more ways to connect. Attacking one of these platforms simply isn’t going to prove effective over the long haul.”
Confirmation of Macy’s commitment to speedy deliveries is news of its recently opened 1.3 million square foot fulfillment center with the capacity to hold 12 million items, as reported by Tulsa World. According to article, the technologically-advanced facility ships 160,000 orders a day, and should reach 325,000 a day when operating at full capacity.