Why Would Google Shopping Express Matter To Amazon

by CXOtoday News Desk    Jul 09, 2014

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As Google sets aside $500 million in Google Shopping Express — a same-day grocery delivery service offered in the US — something similar to its rival Amazon, Amazon Prime Fresh service, this move needs yet another close watch by Amazon and other global retailers that are having similar services online.

The news that was first reported by technology website Re/code states that Google is beefing up the service to compete with Amazon in the $600 billion market for groceries. The leading global search-advertising company, can tap for the $3.5 billion that grocery-related brands are expected to spend this year on digital advertising.

Google Shopping Express will initially be free but will eventually cost users a flat-fee subscription — Re/code reports. That model is similar to Amazon Prime Fresh, which costs $299 a year and includes free shipping and a library of videos and music. The Shopping Express is already available in some places such as San Francisco, Los Angeles and New York City.

Google’s move to source from grocery stores aims to get supermarkets into its corner as brick-and-mortar stores battle “showrooming” —something that Amazon had done to its books when a person shops a store’s shelves then peruses Amazon for the same product at a lower price.

Experts not only pitch this as a direct competition but also fear that with Google’s extensive search services, most customers may have to go through Google to get Amazon. In other words, unless a shopper is searching Amazon directly, they’re likely searching first on Google. And even though Amazon has highly ranked searches in Google, Google crams down those natural search results in favour of its own Amazon-like ads. This may be an opportunity lost for Amazon, they say.

A big difference between the two operations centers on the fact that Amazon operates its own grocery warehouses instead of getting produce or meat from local stores like Google will. Costco, Target, Whole Foods and Toys “R” Us are already on board for Google’s service. As a result of this, retailers may find it attractive to tie with Google.

According to an expert, AmazonFresh does deliver some goods from local stores, but its core produce — fruits and veggies — come from Amazon’s own warehouses. Any lettuce bought via AmazonFresh is a lettuce not being bought from Kroger or Stop & Shop. In contrast to this, Google Shopping Express, by contrast, sources all its groceries at stores near you. And this could be a key reason for Amazon to think and plan carefully before disaster strikes!