According to TechCrunch, Google is creating an Amazon Prime competitor. The two twists are: it will apparently be cheaper and also offer same-day delivery from selected brick-and-mortar retailers.
TechCrunch says the new service will be called “Google Shopping Express.” Apparently stores like Wal-Mart and Target are some of the potential offline retail partners.
If any part of this is true (and it’s likely that there’s at least some truth to what TechCrunch is reporting) it’s very interesting. Google is stepping up its campaign against Amazon, the undisputed king of online e-commerce. If the new Google service does undercut Amazon Prime, that would be potentially good news for consumers — though not necessarily for retailers.
TechCrunch claims the Google expedited delivery service will cost between $64 and $69 dollars.
Amazon Prime has been a boon for the company. It increases loyalty and shopping frequency. I haven’t seen data on this, but my guess would be that Prime customers are also the biggest mobile “showroomers” as well.
Amazon Prime costs $79 per year and promises free, 2-day shipping plus free access to Amazon Instant Video (which has a weak selection, but it feels like a nice value-add). Amazon hooks users with a free 30-day trial and automatic annual renewals off a stored credit card.
E-commerce is a growth area and opportunity for Google. And after an extended period of near-dormancy, Google has stepped up its shopping-related initiatives over the past year:
Google Product Listing ads and all paid-inclusion shopping
Google’s acquisition of e-commerce locker provider BufferBox (competes with Amazon Lockers)
Google’s acquisition of retail feed management provider Channel Intelligence (which provides inventory and pricing data to Google)
Add this to what Google is trying to do with mobile, Google Wallet and payments and you’ve got a holistic approach to shopping and commerce that equally addresses online and offline shopping and buying. There’s also an ROI/analytics aspect to all of this, as well.
DataPop CEO Jason Lembeck argues that Google is trying to dominate etailing and retailing and that companies should resist or be reduced to commodity suppliers or, effectively, warehouses of products for Google customers. In other words, Lembeck is warning of disintermediation.
In that context, stores such as Wal-Mart and Target, one would think, might resist simply becoming product-inventory suppliers via Google. They would undoubtedly rather own the customer relationship and maintain their brands’ value.
Think about it: if everything at Target were available via Google with same day delivery (even for a surcharge) it might reduce foot traffic to retail stores. That would be perceived as a negative outcome for Target. In addition, if Google were promoting showrooming via mobile — a potentially inevitable outgrowth of these initiatives — would retailers still want to accept Google Wallet?
Given these potential tensions and conflicts, everything being predicted might not turn out to be exactly true as reported. However Google may well be poised to do some dramatic things as it pulls the various pieces of its commerce strategy puzzle together.
Postscript: Coincidentally the Boston Consulting Group released a survey of 1,500 US adults about e-commerce and delivery options. Only 9 percent said that same-day delivery would motivate them to shop online. Free delivery and lower prices drew far more yes responses.
If these survey results are representative, same-day delivery would need to be free or almost free (or included in a Prime-like service) to gain adoption. Otherwise it might fall flat and fail to be the “wow” service component that Google, Amazon and eBay imagine it to be.
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