Monday, February 22, 2016

Google Express Now Delivers Groceries to your Door

Last week, The Wall Street Journal published an article highlighting Google’s latest endeavour—grocery delivery. Residents of California and parts of the Midwest can order products from Google Express and see them at their door in less than two hours. While fresh-food delivery companies have failed in the past, Google does not hold inventory but picks up products from existing retailers, like Costco, and delivers them to customers.
Nicas and Bensinger’s article highlights the speed and efficiency this service provides. Google is a frontrunner in the technology industry with a strong global influence. While Google Express is a relatively new venture reaching only a small customer basis, the potential is enormous. Google Express customers can order anything from home-wears to toiletries to tech-products, and now, food. The article mentions Costco, Wholefoods, and Smart&Final as leading food sellers on Google Express. However, the article fails to mention the wide scope of stores featured on the site including Target, Toys “R” Us, Walgreens, and Staples. The convenience that comes with Google Express is undeniable. For $10 a month or $95 a year, customers can have everyday products delivered right to their doors. The article compares Google Express food to similar services but points out the benefits in Google’s business plan. In particular, Google does not hold inventory in a warehouse like Amazon. They simply pick up customer orders from established stores or warehouses.
While Google Express is innovative and convenient, it is currently only available in California and parts of the Midwest. The service is expected to reach other major cities, but it only reaches a small population at the moment. The article briefly mentions the membership fees required to join Google Express. Google offers three months of free delivery as a trial but then charges customers $3-5 for each food order. Non-food orders have free delivery for members. Customers must establish a cost/ benefit analysis to calculate if the membership fee and delivery charge are worth less than going to a traditional store.  Though the Wall Street Journal Article presents the new food service market of Google Express, it does a poor job of explaining Google Express as a whole. Many people who live outside the California region, probably have not heard of this service at all. Amazon is the main competitor of Google Express but Amazon has a much larger network and therefore is a better service than Google Express. The business model of Google’s grocery delivery is better than that of Amazon because Google does not hold the food prior to sale. Rather than store food in an expensive warehouse, Google saves money and has a more efficient food delivery service despite there small scope.




  1. I found this article very interesting. I like the idea of having groceries, and things like that, being delivered to your house in such a short amount of time. And as you mentioned, it is so similar to Amazon Now. But I think it is important to recognize that Google Express is expensive and only has the feature of 2 hour delivery. In the case of Amazon Now, you have to be an Amazon Prime Member to get Amazon Now and 2 hour delivery for free. And the price for one year of Amazon Prime is about $100 but you get a lot more perks than just 2 hour delivery (special deals, movie streaming, etc.) I believe that Google may need to work on the additional benefits to buying Google Express because Prime offers more to customers, as of now.
    I also think the article should have mentioned how Google will promise to keep its customers safe. Personally I would like to know that the person who drives to my house and gives me my groceries is not going to take advantage of this information. I think this is an important aspect that the article and Google have not addressed.

  2. I also wrote on this topic this week, for I found it interesting that a company, known as a leading search engine, is going into the delivery business. When looking at the concept, it is very useful to many families across our country, but currently Google is only offering it in select areas. That is problematic, because one of their main competitors, Amazon Prime, has expanded well beyond that, and as a result will be known in cities before Google Express arrives. If people are already paying for an Amazon Prime membership, it is doubtful they will switch to Google Express, unless Google Express can find a service, or delivery item, that they can offer that Amazon Prime does not offer.
    Another problem I found with the idea of Google Express is that it takes away business from smaller, more local grocers. They will most likely always pair with big box stores, due to the larger amount of inventory, but in the long run this could hurt businesses within the cities. Finally, the article does not explain how Google Express plans on guaranteeing that these suppliers they are using will have what the customer ordered in stock and ready to be delivered in such a short period of time. I do agree, that it is a strategic move for them to not keep a warehouse of inventory, for they will not risk items going bad, or have a surplus of items that people are not interested in. But it is easier to check the stock of an item that a customer wants if they are checking through their own warehouse. Google Express will have to find a quick and accurate way to be able to check the stock across all the stores they have a partnership with, and find a way to make sure that it is put to the side, so that it is not sold twice, and that it is available to be picked and delivered in the correct time frame. I do think Google Express is a good, convenient idea, but I think they need to find a distinct place in this market, develop a good inventory tracking strategy, and start marketing this service throughout the country.

  3. If Google Express is able to scale its operations, I believe it will attract consumers from not only a national level but eventually a global level. Though Juliana mentions looking at the cost/benefit relationship in order to determine if the service is worth the money, I think she fails to consider the people who are not able to make it to the traditional store. There are people that live hours away from the closest supermarket or others in busy cities who find it useless to own a car when there is efficient public transportation present. As a college student without a car on campus, I would definitely be a consumer of this product. I believe many of my peers would agree with me so Google Express should explore target marketing to the college student market.

    One aspect that I am confused about is the membership and per order prices. Does one need to sign up as a member and pay those fees and then have to pay per order of groceries? If this is the correct assumption, I believe it would be more appealing to customers for one flat rate per month or one annual membership fee. If that means raising the membership price, I think that is a route that Google Express should explore. In general, customers would rather have a consistent price instead of multiple fees. I would also be interested in seeing their relationship with other similar services such as Postmates which has locals go to the grocery store, pick up your ordered products and deliver it to your door, similar to Google Express. Post mates does not require a membership fee in order groceries, just a small delivery cost.

    Google Express has a very successful business model and once they expand across the United States and refine their pricing plan, I think that it will be effective and profitable.

  4. I think Google Express is a good idea, however I think it will be a while until they become successful or even able to compete with Amazon. They have the right idea; I would consider using Google Express on various different occasions. For example, as a college student not owning a car or even after college when I will hopefully be busy with my first job would be the perfect instances for me to use Google Express to deliver food and necessary goods to me within a span of two hours. Amazon is leading with their use of Drones for delivering goods to their Amazon Prime users. I think a downfall for Google Express right now is how much they are charging. From what I read, there is an initial fee and then an additional fee per order. Amazon Prime users would never switch over to Google Express for the same services at a higher expense. Another concern I had with Google Express being able to pick up more users/customers was that they were only delivering in the California and parts of the mid-west at the time. In order for Google Express to be successful, they need to both lower their prices and expand, at least nationally and if not globally. I live on the East Coast and not only have I not used Google Express, but I’ve never even heard of it. That is an issue with the marketing of Google Express. Although Google Express has a lot of issues to work out, I did agree with their system of picking up and delivering food rather than storing it in a warehouse like Amazon. In doing this, Google Express is being much more efficient and saving a lot of money in not needing to pay for pricey warehouses.


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