Macy's extends same-day delivery with a different kind of carrier in the driver's seat

Retail giant Macy's Inc. said yesterday it will add nine cities to its same-day delivery network, and will rely on parcel-delivery firm Deliv, rather than one of the traditional parcel operators, to handle the shipping.

The expansion brings to 17 the number of U.S. markets eligible for same-day delivery services of purchases made on macys.com and bloomingdales.com to customers' homes. Macy's launched the original pilot program in eight large cities during the fall of 2014.

The announcement came the same day that rival apparel retailer J.C. Penney Co. Inc. said it had hired two senior supply chain executives from The Home Depot Inc. and Target Corp. to help drive its own omnichannel growth strategy.

Following the on-demand ride model popularized by the firm Uber, Deliv, a Menlo Park, Calif. software firm, relies on a network of contracted drivers who pick up and deliver items to home or office addresses. Deliv uses a smartphone app to direct its drivers to collect merchandise that is stored on shelves and storerooms in retail stores.

Deliv employees will collect Macy's and Bloomingdale's packages by collaborating with major mall owners, including General Growth Properties Inc., The Macerich Company, PREIT, Simon Property Group LP, The Taubman Company LLC, and Westfield Corp., Macy's said.

"Our ability to expand same-day delivery is rooted in local merchandise inventories at Macy's stores, as well as a newly expanded delivery footprint of our partners at Deliv," R.B. Harrison, Macy's chief omnichannel officer, said in a release.

Macy's imposes a $5 surcharge above the standard ground-shipping fees for same-day deliveries. The Deliv network can also accommodate reverse logistics in certain markets—currently including Chicago, Los Angeles, San Francisco, and the Bay Area—retrieving customer returns of online purchases and returning them to the retailer.

The expansion of same-day delivery continues a strategy launched by Macy's in January, when the company announced it would restructure its merchandising and marketing operations to create an omnichannel view of its business.

"Our business is rapidly evolving in response to changes in the way customers are shopping across stores, desktops, tablets, and smartphones," Macy's chairman and CEO Terry J. Lundgren said in a statement at the time.

The new delivery model could eventually grow to cover a significant volume of online commerce, with the company operating about 885 stores in 45 states under the Macy's and Bloomingdale's names, generating $28 billion in sales during its 2014 fiscal year.