Google has entered the market for on-demand goods by providing same-day delivery on Google Express while changing the way we shop. Google Express is competing with Amazon to ship goods cheaper and faster—but straight from the retailer, according to Dawn.
The website goes on to say that Google Express launched in 2013 in the San Francisco Bay Area under the name Google Shopping Express. Since then it has expanded to Manhattan and West Los Angeles. Later this year it changed its name to Google Express and began serving Chicago, Boston, and Washington with a more colorful logo and a revised pricing plan.
The Market Realist points out that Google Express’s main competitor in the same-day market is Amazon.com, however the two companies’ operational processes are “completely different.” It goes on to say that Google works directly with local retailers, shipping directly from them. Amazon, however maintains and ships from its own “massive warehouses” with a significantly larger selection of items than Google Express.
According to Dawn, Google Express offers a membership fee of $10 a month, or $95 a year for unlimited same-day or overnight delivery, or flat rate fee of $4.99 per order. Compare that to Amazon Prime’s $99 a year, and $299 fee for Amazon Prime Fresh, a same-day delivery service for groceries and other “eligible orders” exceeding $35 on Amazon. Amazon’s same-day delivery option is also available in 14 cities to Prime members for a flat fee of $5.99 per order.
Dawn goes on to say that the differences between the two is that Google is exclusive for delivery. However, Amazon Prime includes unlimited music and video streaming from Amazon’s collections, as well as one free Kindle rental a month.
Google Express has its share of obstacles, reports Market Realist. It says that although it helps retailers expand their business, one of the biggest problems that it’s facing is that customers tend to avoid the premium attached to same-day shipping delivery. In fact, according to its calculations, “the majority of customers are not willing to pay extra.” It goes on to report that 70% of customers don’t want to pay extra for overnight or same-day delivery,” and convincing retailers to start using the service is a daunting task.
Google is also having a hard time getting a buy-in from major retailers for a very different reason. Major retailers have backed out of the service because it “enables customers to avoid the need to visit stores,” reducing the amount of impulse purchases, according to Market Realist.
The Market Realist goes on to say that Google Express is a work in progress. During a Google earnings conference call the company admitted that with regards to logistics, because Google Express is new, greater efficiency is needed. And, “since delivery is a business requiring scale, it will take time for Google Express to become profitable.” However, it says that the same-day shipping market has “huge growth potential.”
Google Express must also keep a close watch on Amazon as it ramps-up its delivery operations. Recently the Inquisitr reported that Amazon Prime Air is looking for drone test pilots to deliver packages. The drones’ expected delivery time to customers’ doorsteps is 30 minutes. The program may be available five years from now.
Although Amazon is a fierce contender for the top spot in same-day delivery providers, Google Express continues to innovate and change the way we shop.
[Image via SlashGear]