With same-day delivery gaining traction in the U.S., Macy's, Inc. (M) and Bloomingdale's recently announced that they would provide the service this fall season, to compete better with big-shot companies. This service is likely to enhance customers’ convenience as it will allow them to shop online or via mobile apps and have their products delivered the same day.
Sources said that to facilitate same-day delivery, the company has collaborated with Deliv, which is a startup based in Silicon Valley. This delivery service company uses crowd sourced drivers, who collect orders from local outlets as they are placed, and deliver them within a particular distance.
This is not Deliv’s first attempt, as the company has also partnered with Foot Locker, Inc. (FL) recently to support its same-day delivery service.
Both Macy’s and Bloomingdale's will offer this service in select cities. While Macy’s will extend this feature to citizens of Chicago, San Jose, Washington, D.C., San Francisco, Seattle, Los Angeles, Houston and New Jersey, Bloomingdale’s will take it slow, by starting with San Francisco, Los Angeles, San Jose and Chicago only.
The growing popularity of this service is evident from the fact that many other companies have already adopted it. Recently, Google Inc. (GOOG) partnered with retailers like Barnes & Noble, Inc. (BKS), Costco and Staples to power this service for them. Also, Amazon is attempting to follow suit.
For Macy’s, My Macy's localization initiatives, omni-channel integration and magic selling have always remained driving factors. Apart from same-day delivery, the company introduced many other innovative services including Apple Pay, Buy Online Pickup in Store (“BOPS”) Rollout Completed, Enhanced Shopping Apps and Innovation in Stores Selling Technology, all in September.
Going forward, this customer-oriented retailer intends to maintain its focus on making innovations and growing in the omni-channel world. With these initiatives underway, the company is all set to tap sales this holiday season.
However, Macy’s currently carries a Zacks Rank #4 (Sell) as the company trimmed its sales and earnings forecast for fiscal 2014, when it released its third-quarter fiscal earnings, where sales of $6,195 million not only missed the Zacks Consensus Estimate of $6,346 million, but also slid 1.3% year over year.
Including sales generated from third-party licensed departments, comparable-store sales are expected to increase between 1.2% and 1.5% (or 0.7% to 1% excluding licensed businesses) in fiscal 2014. Earlier, the company had projected comparable-store sales growth of 2% to 2.5% for the full year (or 1.5% to 2% excluding licensed businesses).
Macy’s also lowered its full-year earnings projection to a band of $4.25 to $4.35 per share from $4.40 to $4.50 projected earlier. The current Zacks Consensus Estimate for the fiscal year is $4.30 per share, falling within the guidance range.
However, earnings of 61 cents a share surpassed the Zacks Consensus Estimate of 49 cents, and surged 29.8% from 47 cents earned in the prior-year quarter. Shares of the company have jumped 5.1% since it released its earnings results, yesterday.
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