Google already possesses a powerful advertising engine, one that has driven the company to billions of dollars in revenue. The company also has ongoing aspirations toward the ecommerce side of business and recently provided some upgrades to their shopping and delivery service, Google Shopping Express – and this week it also renamed the service, Google Express.
In addition to their home state presence in Northern California, Los Angeles, and Manhattan, the company expanded Google Express to Boston, Chicago, and Washington DC. Google Express offers same-day delivery to customers from participating stores in these areas, and overnight service as well for that Northern California market.
To entice more people to subscribe, Google also expanded the number of national and regional brands that participate. The now year-old program gained businesses like Nine West and PetSmart to complement existing participation from the likes of Costco, Staples, and Whole Foods.
Shopping from home rather than in a store appears to be a trend, but retailers aren’t suffering for it. Citing the Wall Street Journal, Google noted foot traffic during the November-December 2013 period fell to 17 billion from a 2010 mark of 38 billion for that same period. Yet retail sales jumped from $681 billion to $783 billion during that time.
Even though in-store shoppers spent more, retailers hope to connect with them in whatever way the consumer wishes. Hence the potential appeal of Google Express to retailers in densely populated urban locations.
How profitable that might be for Google, like many aspects of the search ad giant’s business, remains a mystery. Analysts at Cowen and Company noted that while Google’s “take-rate” from merchants is unknown, the average take-rate of 8.5 percent by eBay’s Marketplace could be suggestive.
Cowen also noted the potential expansion of Google Express could grow into 18 to 20 more markets, with a hefty investment of around $500 million backing it. The fast delivery niche for ecommerce is filling up with big name competition from the likes of Wal-Mart and Amazon, with Wal-Mart apparently confirming plans for expanded next-day delivery via Twitter.