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Google Express expansion faces revenue, weather challenges

Google Express is attempting to establish its stake in the mcommerce market with the announcement of its expansion, which includes shipping to more cities, new locations and a new name.

Previously known as Google Shopping Express, the new service has revamped itself just ahead of the holiday shopping season. Consumers in Chicago, Boston and Washington, D.C. can now receive its same-day delivery service, with customers in Northern California able to access its next-day shipping service.

“People seem to enjoy shopping in stores, so I’m not sure it will impact traffic much,” said Paula Rosenblum, managing partner at Retail Systems Research, Miami, FL. “But…one thing Google has not done (and really should have) is put caveats around weather related issues.

“Chicago and Boston have been pummeled by snow, and in fact, last year, so was Washington DC.  Google has to be really careful to avoid over-promising.”

Competitive mobile space
Google’s entry into the competitive mobile and ecommerce space will also offer consumers a slew of other shopping choices this holiday season. Google Express has added a slew of new merchants to its service in the past few months, including Barnes & Noble, Nine West, Sports Authority and 1-800-Flowers.

Regional merchants have also been added in existing and new markets, such as Stop & Shop in Boston and Vicente Foods in Los Angeles.

Products can be purchased via the Google Shopping express mobile application, available for iOS and Android. The service has decided to simplify and shorten its name, although the app is still functioning under its previous name.

Google hopes that its revamped service will help consumers get errands out of the way quickly, and that it will ultimately give customers more free time.

“We’ve definitely seen Google approach Amazon-like features in the past by aggregating items for sale via Google Shopping, but so far they haven’t invested a whole lot in servicing customers directly,” said Mike Santoro, president of Walker Sands, Chicago, IL. “It especially interesting to note that this announcement came just a few days after Amazon’s move to open an NY-based brick-and-mortar store with the same goal of same-day shipping.”

Google Express members will receive access to free overnight or same-day delivery on eligible purchases over $15, flexible delivery windows and shared membership with an individual in the same household.

Enticing free trial
Google is aiming to entice and convert new consumers into members with its free three-month trial, an offer that lasts until March 31 of next year. For customers planning busy online or mobile shopping days coinciding with holiday deals, the free trial eliminates all shipping and service fees.

Regular membership can be purchased for $10 per month or $95 per year. For consumers planning to use Google Express sporadically, a $4.99 per order pay-as-you-go option is also available.

The sector of rapid shipping is rapidly growing, with Target recently announcing its plans to offer same-day or two-day shipping to most Americans. However, there is some dissent among experts as to whether it is ultimately sustainable.

“The question is, will consumers be willing to pay for it,” Ms. Rosenblum said. “We have data we gathered that tells us logistics providers are not terribly interested in absorbing costs associated with rapid fulfillment, while retailers sort of are willing to do so.

“At some point, someone is going to have to pay for the services, and Google’s charge (and Amazon’s) are just not high enough to cover costs over the long term.”

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York