|Thu Dec 1 2011 23:28:55|
Google to Add Shipping Service to Large Merchant Offerings?
By: Ina Steiner
Amazon Prime was a stroke of genius for the online marketplace. Get consumers to pay $79 for unlimited free shipping, and they'll come back to your site when they want to shop in order to get "free shipping"!
Now Google is rumored to be planning a shipping service that competes with Amazon Prime, according to the Wall Street Journal. Google's service may be modeled after GSI Commerce's ShopRunnner, which charges consumers $79/year to get free 2-day shipping on eligible items from a small network of top retailers.
If you haven't heard of ShopRunner, then you understand the challenge that Google faces with the model - having to work with a network of retailers is a far cry from Amazon Prime, in which Amazon holds 100 percent of the inventory it ships, and has fulfillment centers all over the country. (Though today's Journal article does raise the question, why did eBay cede control of ShopRunner when it acquired GSI Commerce?)
Google will rely on its existing service called Local Availability to help it power the shipping service, according to the Wall Street Journal. If you do a search on Google Product Search for a Canon digital camera today, Google shows you a list of local chain stores such as Best Buy and indicates whether they have the item in stock at that store. Large retail chains send that information to Google as part of their Merchant Center feeds.
It's unclear exactly how the rumored service would work, but if Google ties the shipping service to Local Availability, it could then have a message next to the stores' "in stock" message that says "get this item with 1-day shipping," or something to that effect. Google could then charge the retailer for sending the customer to their site - not a stretch, since that's how its ad model works. And since Google is sending local consumers to the brick-and-click retailer, 1-day shipping would not be as expensive for the retailer as sending it across the country.
Small merchants are unlikely to qualify for such a program - they're already disqualified from participating in Google's Local Availability feature - and like eBay, Google is focused on large enterprise accounts.
A Google shipping service would be much more about helping its large merchant customers than about Google operating a "marketplace." While Google has stellar search and advertising businesses, it hasn't succeeded at everything it has set out to do - its Google Checkout online payments service is just one example of that.