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Same-Day Delivery Wars Heat Up As Kohl's Adds Six More Cities

by Reuters /

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Kohl's Corp. will offer same-day delivery services in six more U.S. cities, taking a leaf out of Macy's playbook, as department stores aim to make online shopping more appealing ahead of the holiday season.

Kohl's said Monday it would offer same-day deliveries in Boston, Brooklyn/Queens, Los Angeles, Miami, Northern New Jersey, and Philadelphia in the coming weeks. It had been testing the service in San Francisco, the Bay Area and Chicago.

The company said it had tied up with Deliv, an Uber-like startup that contracts drivers to pick up ordered items from stores and malls and deliver them to customers. Deliv also handles Macy's same-day delivery across the 17 cities the retailer offers the service.

Separately, Canadian e-commerce platform Shopify Inc. announced on Wednesday that it will partner with Uber to help merchants deliver goods to customers on the same day in New York City, Chicago and San Francisco.

Department stores are investing aggressively to boost e-commerce sales through initiatives such as 'order online and pick up in store' as they try to compete with online-only rivals, the biggest of which is Inc.

"Amazon is trying to gain a new edge via same-day delivery in select markets, but department stores have a natural advantage because their stores can serve as fulfillment hubs," eMarketer's retail analyst Yoram Wurmser said.

E-commerce sales account for less than 15 percent of revenue for most department stores, Giulia Prati, senior research analyst at L2 Inc, said, citing an eMarketer report.

But Prati expects shoppers are likely to use in-store pickup and online fulfillment options as an alternative to facing crowds at a store in the run up to the holidays.

Delivery Wars: Putting Same-Day Service to the Test

E-commerce sales are expected to increase 13.9 percent in November and December, which includes the holiday season running from Thanksgiving through Christmas, according to an eMarketer report from August. Overall sales are expected to increase 5.6 percent in the same period.

"The consumer's expectation is clearly shifting increasingly to the "I want it now" model, and department stores that are able to oblige will see significant increases in sales," Prati said.

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