Google Spends $500 Million to Expand Shopping Express

July 7, 2014 - Written By Cory McNutt

Not many people want to spend their precious free time shopping – I’m not talking about running into the grocery store which we all must do from time-to-time…I’m talking about buying a new TV or a nice surround sound system, or even a coffeemaker.  Long gone are the times when we would have to jump into a car and drive to  three or four different stores to compare features and prices…we now can simply get online, see the item – blow it up, rotate it, change its color – price the item, and then have it sent directly to our front door.  Google is the reigning king of online searches, however, when it comes to actually looking for an item to purchase – customers head to Amazon for their search.  

Amazon has gone from a seller of online books to a world leader in selling just about anything – diapers, they have you ‘covered,’ flat screens TVs or all shapes and sizes, to delivering fresh groceries – and Google wants a piece of this action.  Google already has the search engine, but they need to collaborate with the vendors or manufacturers of the products.  Amazon gives the user the ability to search for an item and then immediately make the purchase, whereas Google will allow the customer to search, but has no means set up to make the purchase through Google itself – the customer must then search for the cheapest vendor and then make their purchase.  This leaves Google out of the purchase and delivery process – something Google is spending over half a billion dollars to correct.

Unlike Amazon that utilizes its enormous distribution network to make a sale and delivery, Google’s Shopping Express sends its couriers to local retail partners, like a Target or Staples, to pick up and deliver the merchandise to its customers.  Is Google going to make a lot of money acting as a ‘delivery service’ – heck no – however, it is all about the search.  Google wants consumers to use them for their shopping searches, not Amazon – if customers know that they can get fast delivery from Google’s Shopping Express, then they would be more likely to use Google to search for that next purchase.  The merchants would love to integrate themselves into Google’s Shopping Express, allow the customers to checkout through them, and would happily allow Google to deliver directly to the customer’s house.  That vendor just made a sale they normally would not have made, all because Google was willing to “deliver the goods.’

This makes Google an ally of the local retailers – not competing directly against them as Amazon does.  Where the Google Shopping Express service is available – mainly San Francisco, New York, and Los Angeles – the customer goes to Google’s dedicated website and selects where they want to buy their groceries or dry goods.  It then pays for them on the merchant’s site and Google jumps in, picks up the merchandise, and takes it to Google’s own warehouse where it is loaded on vehicles for same day delivery.  Google takes a cut of the transaction as well as charging a $4.99 fee for each store they must stop at for the customer – eventually, Google will charge a yearly membership fee like Amazon…and word is it would probably be about $100.

There is a certain fear that Google may eventually eliminate the merchant – they could go directly to Proctor and Gamble and say, sell to us directly…why use Target as a ‘middle-merchant,’ but Google says this is not their strategy.  Google claims they are a “platform and partnership business.”  Another concern is that Google will be able to grab marketing dollars from the big companies as they learn more about what consumers are purchasing via their deliver operations.  However, even with some concerns, Google has still been able to assemble a high-level core group of partners.  Most of them, Google included, are focusing on fighting off Amazon, which will still be a huge task for anybody including Google and their vast resources.  Google is testing the waters and once they lay down a solid foundation, they will be able to expand at a very rapid rate, throwing the full weight of Google’s resources at the problem.

Please let us know on our Google+ Page if you would take advantage of Google’s Shopper Express if it were offered for a reasonable yearly fee…as always, we would love to hear from you.

Google Express