A few months ago, Google launched beta testing for an ecommerce service called Google Shopping Express available in the San Francisco Bay area. During the test, selected users can shop online for products from local stores (all under the same interface) which are then delivered that same day. Rumor has it that Google may charge $60-70 for the service when it’s out of testing.
his draws many similarities to Amazon’s efforts with Amazon Prime – which charges users $79 per year to get free, two-day shipping on an unlimited number of orders – as well as AmazonFresh – a Seattle-based online grocery pilot program.
Ecommerce has two major competitive disadvantages when compared to brick-and-mortar stores: shipping delays and adequate grocery storage. Google and Amazon are taking different approaches to these issues. In Google’s case, the products stay stored at their respective stores until they are collected and delivered by the Google Shopping Express Service. Amazon does this to a degree as well, but it also uses its own warehouses to store and ship fresh produce items (which are not currently available through Google’s service).
By standardizing same-day delivery and moving into the grocery market, both companies are forging a new frontier for ecommerce as we know it. But, it’s risky territory. The profit margins are razor-thin, and many companies (WebVan and Kozmo come to mind) have tried and failed to sustain similar services. Logistics management, inventory tracking, and warehouse condition all need to be perfect for such a system to work.
But, neither company is for want of resources. So, if anyone can change the games of ecommerce and direct-to-consumer fulfillment, it’d be them. Between this and the Marketplace Fairness Act, this year is shaping up to be a very interesting one for the world of ecommerce!