Google's Making a Masterful Play for Amazon's Customers (And Saving Brick & Mortar Retail?) - Footmarks

Google’s Making a Masterful Play for Amazon’s Customers (And Saving Brick & Mortar Retail?)

In New York, San Francisco, or LA?

Then you’ve probably heard about Google’s same-day delivery service Shopping Express, which rolled out in Manhattan early last week.

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Google is forgoing the delivery surcharge for the next six months, and New Yorkers who signed up for the service before midnight last Monday also received a $10 spending bonus. So far, participating stores in Manhattan include Costco, Walgreens, Target, and Fairway Market, which for many, could easily kill a week’s worth of errands.

There’s apps for both iOS and Android, or users can dial up the service at Google.com/shopping/express, to place an order before 4.30pm.

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So far, reviews have been positive (as per a casual survey of Twitter), and demand for the service has been brisk. So brisk, in fact, that Google was forced to shut down deliveries by noon on its first day. Further reports indicated Tuesday was rocky for the company as well. Now, more than a week later, Google appears to have added more capacity and begun to get a sense of New York congestion (which Amazon has posited is only navigable by drone).

After the 6 free months expire, Google will charge New Yorkers a flat delivery fee of $4.99 per store. This compares to Amazon’s $5.99 same-day charge for Prime members (and the $9.98 on the first item, plus $0.99 for each additional item, it charges everyone else.) While Google’s Express, and Amazon Prime’s same-day delivery services aren’t entirely the same – Amazon sells a formidable selection of goods directly from its warehouses, while Google’s inventory is defined by the stores it serves – Google’s six-months-free promotion should, as Alison Griswold writes in Slate, “give Amazon pause.” She writes, “Six months is a long time for Google to build consumer habits and create loyal users… . People who sign up to take advantage of the free shipping deal now may well find, come October, that … the full price might seem worth it never to have to haul heavy shopping bags home again.”

While Google’s move against Amazon is unlikely to have been motivated by the travails of local retailers, Google Express, should it expand and endure, is nevertheless a definitive boon for Main Street. Same-day, store-to-door delivery services like Google Express are what city retailers need to navigate the logistical challenges of the new on-demand economy, and to begin to transition the role of the physical store. Indeed, this jibes with what Footmarks’ CEO Preston Reed sees as a fundamental shift in the distribution model of traditional retail, whereby stores are becoming, in part, shipping centers; nodes of omnichannel distribution networks, supported by a fleet of delivery vehicles. As the retail model shifts, urban stores have the upper hand. Not only are they able to use their physical space to showcase their wares and engage customers through ever more sophisticated and compelling mobile-afforded experiences, they can also facilitate the exchange of goods available for in-store pickup (post e-commerce or m-commerce preorder) as well as provision these goods quickly through local delivery, just by being physically more proximate to their consumers.

Google’s competition with Amazon has also yielded new features to Google’s prescient Google Now app, as Google’s fight heats up with Amazon over product-related searches. On the same day Google Express launched in New York, Google announced on its blog that a new feature – an auto-generated shopping list of sorts – had been added to the Android app’s list of other sibylline functions, like flight and traffic reminders, which are prompted by the app’s integration with users’ Gmail inboxes and Google calendars. (As the WSJ explains, this new app feature works by integrating recently Googled product searches with the user’s phone’s location information. Google has yet to reveal how retailers will upload their inventory information, or if the feature will become a new type of advertisement in the future.)

In announcing the update, Rolfe Winkler of the WSJ’s Digits Blog took a stab at divining Google’s M.O. He writes: “Google’s biggest initiative to compete more effectively with Amazon up to now has been product listing ads, or PLAs, which serve up images and prices or products inside Google search results instead of the company’s traditional ten blue links.” He continues, “Such ads more closely resemble product search results on Amazon and help Google avoid unhelpful clicks, which is particularly important on bandwidth and screen-size constrained smartphones.” Winkler concludes, “The new Google now location-based product notifications could be a natural extension of PLAs, since retailers already have to submit data to Google about the products they have in stock.”

Two weeks ago Google also acquired the U.K. startup Rangespan, which helps retailers change their product lineup based on online shopping trends. Perhaps Google will also be providing retailers now with Big Data solutions to compete against the e-commerce giant.

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While it’s far too early to declare a winner in Google and Amazon’s bid for “full-stack” domination, it’s clear that with dividends like Google Express, Google Now, and the Rangespan acquisition, that brick and mortar retailers will be the lucky beneficiaries.

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Want to learn more about how physical retailers can transition to omnichannel commerce and take advantage of proximity-sensing technology (without the beneficence of Google)? Visit us at Footmarks to hear how our secure and reliable beacon hardware, and intuitive management and analytics platform can give retailers the tools to get ahead.

 

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