Google Shopping ExpressEvery time someone searches for a product on Amazon, Google loses. They lose potential revenue from advertisers, hits from users etc.

So what do you do? Well in Google’s case get into product delivery, with a venture called Google Shopping Express. This is a decentralised shipping model, available in a couple of cities in the US (New York, San Franscico and Los Angeles). This services has been trialed by Google since 2013.

The way it works is when a user searches for a product through Google like a ‘Barbie’ for instance, they are then directed to visit the Google Shopping Express website. They choose goods from the selected retail partner (which currently includes Toys R Us,Target, Costco, REI, Walgreens, Staples and Wholefoods), Google then picks up the goods and takes it to a central warehouse where it is packed and sent out – delivered the same day it’s ordered. This might sound really scrappy, but it’s a way for Google to clearly and easily close the loop from search to purchase.REI StoreGoogle are seriously investing in this area. Rumour has it they have set aside US$500 million to help expand the service. The Head of Google Shopping Express, Tom Fallows says: ‘You can very much expect that we are putting a lot of money into this and we’re excited and willing to sustain that investment over time as this gets going”.  Google profits from the service by taking a cut of every transaction as well as charging a $4.99 fee for each store their courier has to visit. The plan is to eventually streamline this into a flat-fee subscription model.

So really Google is becoming a e-commerce player, if this does roll-out retailers will need to be well placed to deal with it.  Some of the current retailer partners are integrating a Google Shopping Express button to their existing e-comm site. That said it seems there is a level of caution from retailers with this program – not wanting to give total control away – so they are limiting the program to a couple of stores.

The risky part of this project is that retailers are essentially driving traffic away from their e-commerce site to a ‘market place’ where you’re literally one click away from another competitor. This means retailers will need to get smarter with product, and with building their brand. However, ultimately if this makes it easier for the customer to shop then it will become a dominant force.

Google Shopping Express, is one of many delivery services popping-up like eBay NOW, or instacart – all of which are US based. Seems like a big opportunity to get into this space in the Aussie market, especially with the currently state of catch-up e-commerce.