Google Invests $500 Million In Shopping Express To Win Larger Share Of Online Shopping Market

In a push to win a bigger share of the online shopping market, Re/code reports Google is investing $500 million to expand its Shopping Express initiative, the search company’s same-day delivery service for local products.

According to the Re/code article:

Investment so far has gone towards the marketing of the service in each new city and the buildup of a fleet of delivery vehicles, as well as towards paying for a network of couriers and workers to pack up the goods in stores and deliver packages to shoppers’ doorsteps.

While the article did not list which new cities may get Google Shopping Express, the push to build out the service puts Google in direct competition with Amazon.

Unlike Amazon which maintains fulfillment centers across the country, Google Shopping Express partners with retailers to deliver products from local brick and mortar stores to the consumer. Tom Fallows, head of Google’s Shopping Express, said they are planning to launch a flat-fee membership model similar to Amazon Prime, Amazon’s subscription service, but are unsure what the cost will be.

“We intend this to be an affordable service that as many people as possible can adopt,” said Fallows.

Launched in March of last year, Google Shopping Express currently offers consumers same or next day delivery service from local retail stores in San Francisco, Los Angeles and New York City. Large retailers that have partnered with Google Shopping Express include Target, Costco, Toys R Us and Whole Foods.

“We think that helping close the loop on locally available items is a really important part of making sure Google is the best place to shop,” said Fallows who went on to say Google may eventually include a notification whether or not a product is available for delivery in product search ads.

Re/code points out that expanding Shopping Express will open up the $600 billion grocery market to Google. It will also  give Google a bigger share of the $3.5 billion eMarketer is projecting will be spent on direct-response digital ads by consumer package goods companies and electronics brands this year.