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Macy’s to Take on Amazon With Expanded Same-Day Delivery

Amazon may be leading the e-retail race, but others are trying their level best to catch up.

In an aggressive push for a traditionally brick-and-mortar retailer, Macy’s said it is expanding its same-day delivery service to more U.S. markets this summer—and could beat Amazon’s 14 markets that currently benefit from the speedy service.

Macy’s offers that-day delivery in eight American markets (Houston, San Francisco, San Jose, Seattle, Washington D.C., Chicago, Los Angeles and New Jersey), but by partnering with Deliv, a same-day delivery services that uses a slew of drivers to get goods from stores and malls to consumers tout de suite, the company said it could expand to more markets later this year, Reuters reported.

And Macy’s may have a fighting chance against the e-commerce king because its nearly 900 stores, from which product can be pulled for delivery, quite outnumber Amazon’s 50 fulfillment centers, so goods may have shorter distances to travel.

Same-day delivery for Macy’s customers costs $5 but that fee may not completely cover the cost of offering the service. If it doesn’t that wouldn’t make Macy’s the only one to take a loss for the sake of consumer loyalty.

Analysts estimate that Amazon loses $1 to $2 billion annually on its $99 a year Prime shipping services that promises delivery to customers in at most two days, according to Reuters, and the company’s net shipping cost increased 20 percent to $4.2 billion in 2014 over the previous year.

“It’s very hard to compete with Amazon, but traditional retailers have an advantage in that they already have all of their inventory in place five miles from 90 percent of their purchasing population at their stores,” Deliv CEO Daphne Carmeli told Reuters. “This is one of those opportunities to out-Amazon Amazon,” she said.