Sunday, February 21, 2016

Google Delivers

Recently Alphabet Inc., owner of Google, is working to expand their market sectors and go beyond what they are commonly known for, being a leading search provider. A couple years back, under the name Google Express, they decided to begin doing deliveries, competing with other delivery companies such as Amazon, and now they are expanding into the fresh food market in select U.S. cities. This will take them beyond just competition with Amazon and into competition with other local grocery stores that deliver, such as Giant does in the Baltimore area.
Expanding into this market segment has both a societal and business effect. One way this will have a societal effect is that now it will be more convenient than ever for people in these cities to be able to get fresh food to their homes without leaving their house. This will aide individuals who are unable to leave their home for any reason, such as being disabled or lack of transportation. In addition, those who may live alone, or are single parents and work all day will not have to stress about finding the time to go and pick up groceries from the store. While this is convenient, it comes at a price: “For Google Express members — annual membership costs $95 — fresh-food deliveries will cost $3 an order. … Non-Express members will pay $5 an order” (Bensinger and Nicas). This is similar to what it costs one to be a member of Amazon Prime, which is needed in order to par take in their delivery services, but Amazon does not charge an additional delivery fee as of now. For some individuals, this cost is worth the benefits, but also there are many people who could benefit from a service such as this who would not be able to afford that extra cost. For example, someone who is disabled and possibly living solely on their disability checks, this cost may be a little out of reach. Additionally, Google Express would have a positive business effect on those companies they are pairing with for the fresh food delivery. Rather than spending the money on a warehouse and risking spoiling food, they are pairing with stores such as Costco, Smart & Final and Whole Foods (Bensinger and Nicas). This will help generate business for these companies, rather than take away from their business by entering as direct competition.
This article overlooked the problem of what will happen to the local grocery stores in the long run. The big box stores that Google Express will pair with will benefit but the local grocers will be the ones whose business will be taken away. The article did not address the chances of Google Express being successful with the competition that already exists. It also does not address what the long-terms effects are on consumer behavior with the new convenience of fresh food delivery.

Bensinger, Greg, and Jack Nicas. "Google Launches Fresh-Grocery Deliveries." Wall Street Journal. N.p., 17 Feb. 2016. Web. 20 Feb. 2016. <>.

1 comment:

  1. When people think about Google they generally think about a search engine that they use when they need to obtain information on something. Personally I have never heard of Google Express and the thought of Google delivering groceries is quite surprising. The fact that Google has jumped on this ban wagon is good for their business because they want to compete with companies like Amazon and other top groceries stores. In addition this would make grocery shopping for people who do not want to leave their house or are physically unable too much easier. These individuals would be able to get the groceries delivered to their doorstep at a small fee. However, Google Express does face the issue that Amazon’s delivery charges are less than what Google charges. So individuals may turn to Amazon rather than Google because of the price.

    One problem I think that Google could face is although they are a very large and successful company I do not think most people would turn to Google as the place to buy and get their groceries delivered from. The article does mention that Google plans to pair with companies such as Costco, Smart & Final, and Whole Foods. I think the only way Google will be very successful in Google Express is if they partner with companies, such as the ones listed above, and act just as a delivery service for these places and not an actual grocery store with warehouses. If Google did decide to deliver their own food I think they would have to do a lot of marketing in order to promote themselves as a grocery delivery service because I still believe a lot of people would not turn to a company that they presume as an internet search engine as a place where they want to get their groceries from.


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