Google Ups the Ante with Same-Day Delivery

In an effort to one-up Amazon and its two-day free shipping program, Google is planning a same-day delivery service that could launch in San Francisco next year. Big retailers are involved, but Google has remained mum on how merchandise will be transported from store to door and just how much it will cost customers.

 

The search giant does not plan to stock any merchandise itself. Instead, Google is in talks with Macy’s, Gap and OfficeMax to offer a low-cost, speedy delivery option through its product search feature, according to a report in the Wall Street Journal. When shoppers search for an item using local results in Google Shopping, a same-day delivery option would appear on the retailer’s product page, much the same as Amazon Prime members see today.

 

For a $79 yearly subscription fee to Amazon Prime  (which equates to around $6.50 a month), members get free two-day shipping on most Amazon products. While most orders from Amazon qualify for free standard ground shipping (which usually delivers in five to eight business days), the Amazon Prime program has helped increase sales by 42 percent in the first nine months of this year. Could same-day delivery fuel product sales through Google? Only if it’s cheap, say retail experts.

 

To succeed, Google would have to subsidize the cost of the shipping because most online shoppers today expect free or cheap shipping, Sucharita Mulpuru, an analyst for Forrester Research, told the Wall Street Journal. And same-day service isn’t cheap anywhere in the United States. For instance, San Francisco-based Godspeed Courier charges between $8 and $12 for downtown delivery via bicycle and $25 by van. Cross the Bay Bridge, and East Bay customers pay around $40 for four-hour service. Fleets of Google bike messengers, vans or hired UPS  trucks? Only Google knows, and they’re not telling.

 

In the meantime, Google continues to build business with local retailers. It recently added an "In stock nearby" filter to Google product search to direct shoppers to a local store that has the item they want. Google has also added two new localized features to its mobile shopping app for iPhone and Android. Google Offers shows a deal of the day from local merchants in Portland, Ore., the San Francisco Bay Area, and New York, with more cities on the way. Nearby Offers displays discounts from nearby businesses pinned to Google maps .