Google Express Delivers For Local Businesses

Google and Amazon are battling over the Holy Grail of e-commerce: same-day delivery of goods purchased online. At stake are not only delivery fees but also online advertising revenues. Google takes the latter very seriously, while Amazon’s most profitable service is order fulfillment. So this competition promises to be a very lively one…

Google Express: What You Should Know

You’ve probably heard of Amazon Prime, the all-you-can-buy two-day delivery service offered by Amazon for an annual fee of $99. Since 2009 Amazon has offered same-day delivery service to Prime members in selected markets for an extra $5.99 per order (non-members pay $8.99 plus 99 cents per item in the order).

Google Express is the search giant’s counterpart to Prime same-day delivery. It’s available for $4.99 per order in the areas served or, you pay a $95 annual fee, and orders totaling over $15 are delivered free of charge.

There’s a fair amount of overlap between the areas served by both same-day delivery services. That means competition should keep prices low and service levels high. Amazon delivers only from its enormous warehouses. That strategy will limit same-day delivery to localities where Amazon has warehouses.
Google Express delivery service

Google does not have warehouses; instead, it sells its Express service to local merchants, presumably as part of a comprehensive marketing program that revolves around Google ads. Unlike Amazon’s vertical integration strategy, Google farms out the physical order fulfillment process.

When Google Shopping receives an order for goods from a participating Express merchant, it notifies the merchant via a smartphone app. The merchant pulls the order and puts it in a Google-branded package. Although the Google Express logo seems to indicate that deliveries will be made by air-dropping packages, Google will contract with third-party courier services to pick up and deliver the packages.

Why is Google Delivering Stuff?

There is speculation that Google is in the order-fulfillment business mainly to defend its lucrative advertising business. Currently, Amazon is the leader in searches for goods, taking search traffic and its ad revenues from Google. Google hopes to become the leader in shopping search by beating Amazon at the order-fulfillment game.

Amazon offers millions of different products from thousands of suppliers large and small. Google Express is recruiting merchants one at a time, starting with large chains such as Walgreens, Home Depot, Costco, Whole Foods, Toys R Us and Babies R Us, and other national and regional brands.

Both companies are exploring the use of drones to deliver goods. And we can assume that Google’s driverless car will play a role in Google Express someday. The bright side of human-free deliveries is “no tipping,” of course!

Your thoughts on this topic are welcome. Is your business offering same-day or two-day delivery? Post your comment or question below…

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