ALISTAIR BARR
GoogleGOOGL -1.74% built a fleet of small blue and white vans to run its local commerce and delivery service Google Shopping Express in parts of San Francisco, New York and Los Angeles. But as it expands into less densely populated areas, Google is leaning on other shippers.
Google Shopping Express said Tuesday it will expand its overnight-delivery service in coming months across northern California so that it will stretch from the Oregon border to Fresno, roughly 400 miles to the south.
Google said it is working with “major shipping carriers” to fulfill the orders, which can be placed by 7 pm for delivery the following day.
Google Shopping Express routes online and mobile orders to stores run by retailers including Target, Toys “R” Us, WalgreenWAG -0.62% and Whole Foods MarketWFM -0.13%. Store staff pick and pack the orders and Google handles the delivery to people’s homes.
In urban and suburban areas, where residents live closer together, it is efficient for Google to run its own delivery trucks because they can deliver multiple orders in the same trip. But in more rural areas, the economics get tougher, according to Tom Fallows, product management director for Google Shopping Express.
“In less dense areas, a partnership with other carriers makes more sense,” he said. Fallows declined to name the shipping companies and whether those costs will get passed on to shoppers, though he said Google is working with national and regional carriers. “We are very committed to making this an everyday affordable price point,” he said.
Google will keep using its own delivery vans as it brings the service to more cities, Fallows added.
Traditional e-commerce providers rely on shippers to deliver purchases to shoppers. “But with local stores there is no infrastructure yet,” Fallows said. “That’s why we’re doing this.”
Google hasn’t disclosed sales or order volumes for Google Shopping Express, and Fallows declined to comment on how the business is faring. But he said Google is committed to its delivery service. “Once you are dealing with tens of thousands or hundreds of thousands of orders per day, it makes sense to run it through your own system and network of delivery vehicles,” he said.
Google is competing with Amazon.comAMZN -0.53%, the world’s largest Internet retailer, which has grabbed some of Google’s lucrative product-search business in recent years. Google Shopping Express is a way for Google to try to take some of that business back.
Google started its service in urban areas with fast delivery from local stores, and now it is expanding more broadly. In contrast, Amazon started with a broad online-shopping service and is now focusing more on deliveries in urban areas.
Both companies appear to be coming to similar conclusions: When delivering orders in densely populated areas, it makes sense to have your own fleet. When deliveries are headed to less populated areas, it is better to rely on existing carriers.
- Correction: An earlier version of this post incorrectly attributed Fallows’ remarks to Brandon Trew, another Google executive.
Original : wsj.com
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