Search engine powerhouse Google introduced its Google Express home-delivery shopping service in North Carolina on Tuesday in a disruptive bid to wrest market share from online retail giant Amazon.
Google said Tuesday’s expansion of Google Express to more than a dozen states gives more than 90 percent of the country’s population access to the shopping service initially launched in 2013 as a digital experiment. Google Express customers can order online or through an app.
“You can shop online, order from all those merchants, fill a single basket,” said Brian Elliott, general manager of Google Express. “Payments, checkout are all integrated and your products are delivered from those stores in one to two days.”
Some 50 stores nationwide are participating in Google Express but only 11 are signed up for deliveries in North Carolina at this time. One of the stores, Costco, requires membership to process orders through Google Express. The others are Whole Foods Market, Walgreens, Kohl’s, PetSmart, Road Runner Sports, Sur La Table, Fry’s, L’Occitane, Payless ShoeSource and Guitar Center.
Google’s business model is based on collecting sales commissions from the stores and charging user fees to customers. A single Google Express order costs $4.99, but customers can subscribe for $10 a month or $95 a year. Monthly and annual subscribers can make unlimited purchases, Elliott said, but will have to pay a $3 fee for orders under $15.
Google does not disclose how many people have subscribed or use the service. Also, Google Express comes with restrictions.
“We’re not doing refrigerated or frozen goods,” Elliott said. “And we’re not going to deliver a couch.”
Initially, Google officials acknowledged that they were motivated to introduce Google Express because they noticed that shoppers were increasingly bypassing Google and searching for products directly through Amazon. Now they’re billing Google Express as a shopping experience.
Neil Begley, a media and telecommunications analyst with Moody’s Investors Service, said it’s not likely that many households will pay a $99 subscription fee for Amazon Prime and also a $95 fee for Google Express. He noted that Amazon is already well established and offers a broader range of products.
But Begley said Google’s strategy has been to penetrate systems and networks like a Trojan horse and then become embedded and ubiquitous.
“Everything they do has multiple iterations of planning with long-term goals that aren’t easy to see,” Begley said. “It very rarely stops at that first dimension for them, like with other companies.”