Today, Google confirmed that it is going into the same-day delivery business--at least for a 6-month test in the San Francisco Bay Area.
The new service is called Google Shopping Express.
Judging by a picture that Google included on the page announcing the service?(see above),?Google Shopping Express will feature well-dressed, neatly coiffed people driving around in Google delivery vans delivering stuff.
Google has included nine retailer logos on its Shopping Express site, including Target, Walgreens, Office Depot, and Toys R Us. These are presumably some of the retailers that those who order home delivery can buy stuff from.Google is also recruiting "testers" to get free delivery for the entire 6-month pilot.
So if you live in the Bay area, and you want free delivery from these and other stores, go sign up. Google has also included a form asking what other stores you would like to get stuff delivered from--so it looks as though the company will be adding other retailers soon. And Google is also recruiting other retailers.
So, what gives?
Why is Google going into this business?
Well, presumably, Google is going into this business for a couple of reasons:
- First, offensive.?The "last mile" is expected to be the next big opportunity in eCommerce. Amazon and eBay are going into this business. Whichever company can get the largest and most efficient scale in each market will likely be able to build a big business. This company will also have direct relationships with local consumers, thus getting between the consumers and the local retailers.?
- Second, defensive: Amazon and eBay are going into this business. Amazon and eBay are both big Google customers (AdWords), and a business like this will allow Amazon and eBay to forge much tighter relationships with their own customers. The tighter relationships they have with their own customers--and the more direct relationships they build with local retailers--the less they'll need Google's search traffic. So Google probably wants to insert itself between Amazon and eBay and their customers.?
So, in short, it's a big opportunity--and it's an opportunity that, if ceded to someone else, could eventually reduce Google's value in the local commerce supply chain.
But...
Local ecommerce delivery is yet another huge, complex business that is about as different a business from Google's core business as any business could be.
And how many huge complex businesses can one company really be in and expect to be good at?
Right now, Google is already in the following operating businesses:
- Search
- Mobile operating systems
- Desktop operating systems
- Office productivity apps
- Maps
- Voice communication
- Social networking
- Groupons
- Self-driving cars
- Hyper-fast fiber-based Internet, phone, and TV delivery
- Cell-phone manufacturing
- Tablet manufacturing
- Computerized glasses
- Etc.
And now Google wants to go into the local delivery business?
Isn't Google in the midst of killing off products people love (Google Reader) because it wants to focus?
Yes, Google is a talented company.
Yes, Google is a company with almost unfathomable financial resources.
Yes, Google is a company with vast, diverse ambitions.
But local delivery?
Local delivery, needless to say, is a brutally competitive, capital intensive, low-margin business. And Google doesn't know the first thing about it.?
So, yes, there are strategic reasons why Google might want to go into this business--both offensive and defensive.And, yes, it is theoretically possible to envision a future in which everything will be searched for and ordered on Google mobile phones and computerized glass and delivered by self-driving Google trucks.?
But there are limits as to how much any one company can do.
And Google is already doing a heck of a lot.
If anyone wants to explain to me how Google is going to be able to do local delivery better than everyone else while also doing all these other things better than everyone else, I'm all ears.
But in the meantime, I'll be scratching my head...
Source: http://www.businessinsider.com/googles-going-into-the-delivery-business-2013-3
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