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Google "to take on Amazon" with home delivery service


By Stewart Mitchell

Posted on 2 Dec 2011 at 08:37

Google is planning to compete with firms such as Amazon in the retail world, according to reports.

The company is planning a service where visitors shop online, pay a fee to Google and can expect next-day delivery, a scheme similar to Amazon's Prime service.

According to the Wall Street Journal, Google is in talks with major shippers and retailers in the US – there's no word on a UK service yet – as the search and advertising giant looks to boost online retail earnings.

The move might appear bizarre at first glance, but according to online retail experts, Google has motives for confronting Amazon.

“It's important to remember that 40% of Google's revenue is from the 'retail' vertical," said Scot Wingo, chief executive of e-commerce company ChannelAdvisor, in a blog.

“For a long time, Google didn't really seem to do much with e-commerce, it had fits and starts with Google Product Search, Froogle and Google Checkout. Then in June 2011, it hired Stephanie Tilinius from eBay and since then there has been a concerted new refocus on the category.”

More importantly, said Wingo, as Amazon signs up users to Prime it locks them into Amazon, which means a large portion of product searches will no longer be conducted via Google, which would lose revenue.

“Once a consumer joins Amazon Prime, their searches for products at Google have to decrease precipitously,” Wingo said. “In fact, as a Prime user, I only look for products on Google and other channels if I can't find it on Amazon.

“In other words, Amazon has created a lock-in and it has the world's best product search engine. That's 40% of the internet that Google really can't afford to lose serious share on.”

Google declined to comment on the report.

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User comments

Forget delivery

Amazon customer service is why I keep buying from them.

By Lacrobat on 2 Dec 2011

Another Google giggle!

The business case, if you are Google, is unanswerable, the big doubt is that Google can deliver (in any sense of that word).

Without doing a tedious re-analysis of Google's business model let's just take it for granted that 'Customer Service' isn't a keystone. Consequently, or more likely causally Google isn't a big employer. Google's income & good profits derive from being extremely 'lean'.

Users of their more customer-facing Business Applications online have not been impressed by 'customer service' which I'd bet is out-sourced....

On the other hand, Amazon has spent many years building-up a superb customer-facing business, that is pretty fine-tuned to
deliver (in all senses of that word).

For most of its history Amazon has not made much profit from its business, but it has consistently reinvested into it.

A cynic might see Google 'at it' again; doing an 'Android' by copying someone else's successful business without any of the effort required to create one of its own. Looks like that to me too.

As you'll have guessed I'm an Amazon fan, but it was not ever thus. I've BECOME a fan and constant user for a simple reason: Amazon's whole 'product' is easy to use, competitive and works.

By wittgenfrog on 2 Dec 2011

Yes, good luck to Google. Amazon nailed this years ago, can't fault them.

By AlphaGeeK on 2 Dec 2011

One possible in

One possible in for Google would be to find a better carrier for packages.

Amazon themselves have a great reputation but the couriers they use, less so. There are forever comments on various forums about problems with Yodel, etc.

Any company who took a tough line with couriers who fail to do the job (and lie about it) could well make inroads into the market.

By qpw3141 on 4 Dec 2011

Couriers are indeed the issue

I agree with qpw3141. I have just moved into my new studio and I ordered a significant amount of kit from Amazon. As a "Prime" member many items were due for delivery next day. However, DPD, The Home Delivery Network and Royal Mail have screwed up over the past two weeks with items being delivered 3 days late even after paying extra for before 1pm delivery!
Royal Mail even delivered to the wrong address in another village and could not work out to whom the item had been delivered.
I doubt Google could match the superb service Amazon supplies but if they used reliable and trustworthy couriers people might jump ship to avoid the endless follow up of late deliveries.

By Viktor on 5 Dec 2011

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