Using the Google Shopping Express service customers in select locations in San Francisco, New York and Los Angeles can have their groceries and other products delivered from local retailers directly to their doorstep. The company might now be looking towards a nationwide expansion of Shopping Express. A report claims that as much as $500 million has been earmarked by Google executives for this purpose. While not confirming the amount a Google spokesperson said “you can very much expect that we are putting a lot of money into this.”
A nationwide roll out would certainly beat Amazon to the punch. The online retail giant is currently operating the Amazon Prime Fresh service in select cities. Customers can order household items and fresh groceries and have all of it delivered on the same day. Its the same principle as Google Shopping Express but Amazon charges an annual membership fee whereas the latter applies a $5 per store fee.
Google does not have a mammoth distribution center like Amazon does so it has to rely upon local retailers and partners such as Staples and Target. Customers’ shopping is then put together and shipped on the same day. Re/code thinks that when the time for a nationwide roll out comes Google may shift to an annual subscription for Shopping Express.
Now one might ask what an online search king is doing in the business of delivering groceries. Its simple. Google wants to bring its search and advertising customers into the fold by branching out to this particular niche. On Amazon you search for a product and you buy it immediately. Google gives you relevant results but you can’t buy from Google, and if the seller doesn’t have an online store, then you’re left to look elsewhere.
This would allow Google to sell products on its own and ensure that people use its search engine to find them. Advertisers can then put their products in front of those customers through ads, a service through which Google already makes money.