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Google Same Day Delivery: Bad Idea

Monday - 4/8/2013, 2:18pm  ET

According to its own website, Google may be getting into the same day delivery business, or at least it´s giving it a trial for a limited time. Let´s hope this is just another short-lived experiment by the company, because getting into the delivery business would be an unusually poor decision by such a smart company.

What?

The new service called Google Shopping Express seems to be Google´s incursion into the same day delivery business. According to the information in the website, the company is recruiting testers to receive free unlimited same day delivery for six months in the San Francisco Bay Area.

Logos for 9 major retailers are included in the image, so those companies are most likely included in the service.

Why?

Delivery has been the last frontier in ecommerce, with Amazon.com at the vanguard of the new trend by building warehouses all over the country and developing an amazingly efficient logistics and distribution network.

Amazon provides competitively low prices and the comfortable experience of buying from home, but it has a big disadvantage versus brick and mortar retailers: the absence of instant gratification. That´s why the company is putting so much emphasis on delivery, even if it´s an expensive service and it has unwanted tax consequences, Amazon understands that fast and convenient delivery is a key competitive advantage in the industry.

eBay is also experimenting with same day delivery in San Francisco and New York City, companies like Best Buy, Macy's, Target, and Walgreen are joining eBay in this trial in an attempt to find more ways to defend themselves from the threat that Amazon represents.

Amazon and eBay are taking opposite sides when it comes to their relationship with brick and mortar retailers. Traditional retailers are being deeply pressured by Amazon, the online retail giant is aggressively disrupting the entire industry and generating an enormous challenge for many retailers.

eBay, on the other hand, is trying to build a bridge to bring those brick and mortar stores into the digital era so they can avoid being left in the past by Amazon. eBay is joining forces with traditional retailers in order to stop Amazon and its voracious growth ambitions, so its delivery service makes a lot of strategic sense when seen from that perspective.

A strong delivery network is a key asset for online retailers, so this could be Google´s way to enter that territory and gain some ground in an area where it has been left way behind by the competition. Rumors about Google venturing further into ecommerce have been around for a long time, so this new delivery service could be a move in that direction.

Bad idea

Google is a great and innovative company with enormous resources in terms of money, technology and human talent, and I salute the fact that the company is constantly trying new things and broadening its horizons.

But same day delivery is not the way to go: we are talking about a complex business in which the company has no relevant experience and no material advantage over the competition, the space is getting crowded and nothing indicates that it could be a profitable business for Google.

Even worse, it would distract resources from more important things. Google has a lot on its plate already: Search, Android, Apps, Maps, Gmail, Self-driving cars and computerized glasses to name just a few important areas that could have a big impact for the company over the next years.

Google has just killed Google Reader in order to focus on the most important projects, so this move into same day delivery doesn´t seem like a good decision in terms of allocating resources wisely.

Bottom line

Let´s hope this is just one of those experiments that Google likes to do in order to test new ideas and measure up different possibilities, because entering the same day delivery business at full scale would be a clearly mistaken decision.

This article was originally published as Google Same Day Delivery: Bad Ideaon Fool.com

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