This traditional retailer might beat Amazon to same-day delivery

Yahoo Finance

Much has been made of Amazon’s (AMZN) race for same-day delivery and Google (GOOGL) looking to cut them off at the pass. In fact, Google just revealed they have been testing their own airborne drone deliery system, dubbed Project Wing, that could deliver small items to customers. While Google and Amazon’s drones are still a few years away - these online giants are still going to need physical space from which to distribute. That’s a substantial capital expenditure.

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What if then, there were a store that already had “distribution centers” all over the country from which they could offer same-day delivery right here and right now.

That store, according to Belus Capital Advisors CEO Brian Sozzi, is Macy’s (M). “I believe Macy’s will announce a major same-day delivery program within the next 12 months,” he says. “They’re already piloting it, I believe, in four markets and I think once they have the foundation, the technology behind it -- they’re already working with UPS (UPS) and Fed Ex (FDX) and I believe also Ebay (EBAY) to get the program off the ground.”

Sozzi says he met with a company spokesperson for a tour of the remodeling job at Macy's Herald Square flagship store in New York. "My interpretation," he says, "was the company is currently getting all its technology systems and processes in places to support a 'wider rollout of same-day delivery services.' Macy's currently is able to ship online orders directly from all of its full-line Macy's stores, so same-day delivery is the next step in the company's evolution of getting product to consumers as quick as possible."

And that is key: Macy’s brick and mortar stores are already mini distribution points. Adding same-day deliver is a way to capitalize on the growth of e-commerce using real estate they already pay for.

“Second quarter you had online sales at many companies up 30 or 40%,” Sozzi notes. Even if it still makes up a small slice of the retail pie there’s no doubt that’s where the trend is headed.

And Macy’s isn’t alone in their efforts. Sozzi notes that Best Buy (BBY) customers can now order online and pick-up in store at every location in the country. It’s not same day delivery but it’s a merging of web inventory and actual items in stores nearby, a marriage customers have long been waiting for.

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