Michaels launches contactless, same-day delivery

Dive Brief:

Michaels on Friday launched same day, contactless delivery in Texas, Alabama, Georgia, Florida, Louisiana, Mississippi, Tennessee, Oklahoma, South Carolina and North Carolina. The retailer will roll out the service to other areas later this week, according to a company press release emailed to Retail Dive.
The delivery option will appear at online checkout if the service is available in a customer's area. To deliver packages without contact, delivery personnel will place packages at a customer's door and return to their vehicle after knocking or ringing the doorbell, the retailer noted in the release.
The retailer is offering same-day delivery for orders placed online before 1 p.m., but orders placed after that will be delivered the following day, the company said. The retailer will deliver orders within a 10-mile radius of stores for a flat fee of $7.99 for orders of $100 more and $14.99 for orders less than $100, per the release.

Dive Insight:

Michaels joins other retailers, including 7-Eleven, At Home and Walmart, in offering contactless delivery options for customers during the COVID-19 outbreak.

The introduction of contactless and same-day delivery options also comes as the retailer faces fiscal challenges. Michaels reported a decline in 2019 fourth quarter sales compared to the previous year, which it attributed to lower comparable store sales, the closure of Pat Catan's stores and a decrease in wholesale revenue. The performance, however, was partially offset by sales coming from 16 Michaels stores that were added since the end of Q4 2018.

In late March, analysts with S&P downgraded the craft retailer to "B" from "B+" and gave it a negative outlook, which they said "reflects uncertainty surrounding the impact of the coronavirus and ensuing recessionary environment, which could hinder Michaels' ability to maintain leverage below 5x in fiscal 2021 and beyond."

For non-essential retailers facing trouble prior to the coronavirus outbreak, financial instability has only been heightened for the near future.