Google Gunning for Amazon With Expansion of Same-Day Delivery
Similar to Amazon's same-day delivery and Prime service, Google Shopping Express is a same or next-day delivery service that lets users shop local stores online.
A source with knowledge of Google’s plans told the tech blog that the company’s executive leadership has dedicated up to $500 million for the expansion.
Google did not comment on the specifics of its investment to Re/code or Entrepreneur but the head of Shopping Express, Tom Fallows, said it’s no secret that Google wants to see its local-delivery service take off in a big way.
“You can very much expect that we are putting a lot of money into this and we’re excited and willing to sustain that investment over time as this gets going,” Fallows told Re/code.
Whatever the size of the investment, Google will be pouring resources and capital into marketing Shopping Express in new areas, along with ramping up its delivery-vehicle inventory. The company also plans on hiring more couriers and people to package the products.
The service was initially offered on a trial basis in San Francisco and Silicon Valley in 2013 and began in New York City and West Los Angeles this past May. New users do not have to pay the subscription fee for the first six months and usually receive their items in a three to five hour window from a Google-themed Prius, paying $4.99 for each pickup stop. All transactions are processed through Google Wallet, a move that could also put pressure on PayPal. Google has already formed major partnerships with companies like Costco, Whole Foods and Target.
The search giant is happy to take a bite out of the $600 billion grocery market but its main concern is keeping its competitive edge in online advertising. When Internet users search for products on Amazon instead of Google, Google loses that ad revenue and could, overtime, also lose its dominant position in the market.
But that seems unlikely, because Google has demonstrated that it understands that the search business is about a lot more than just search. It’s about connection. Connecting people to the products, services and other people that they care about -- from beginning to end. Search is just the first step.
Recognizing the potential threat from Amazon and taking it head on is a very forward thinking move.
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