Costco offers same-day delivery with Google Express

Date : 21 November 2013

Google has added Costco to the range of retailers which are now part of its same-day delivery service, Google Express, which is operating in the San Francisco area.

Google Express launched in September following testing

Google started its same-day delivery just over a year ago in the San Francisco area, testing the service with its own employees. Building on this, in September, Google opened up the service to the public and expanded it to include the whole of the San Francisco and Bay areas. It currently offers same-day delivery for products from a range of national retailers including Whole Foods Market, Target and Walgreens, and also a number of local retailers.

Opportunity to get store-based ranges online

Costco has made significant investment in e-commerce over the last 18 months, developing a new platform, introducing apps and launching new services in the UK and Mexico. Although it offers online shopping in the US, the range of products available typically differs to its store offer, and is mainly non-food focused.  Through Google Express, store-based products can be purchased, at the same price as they are available in-store.

As part of the launch of the service, Google is offering free delivery for the first six months until the end of the year, and $5 off first orders. Customers can also register their loyalty card details for each participating retailer to ensure that they continue to earn the relevant benefits.

Same-day delivery becoming a key battleground

Same-day delivery has become a key focus for both online specialists and multichannel retailers. Amazon has been investing in its distribution network in the US, moving inventory closer to its customers in order to be able to offer this service. Meanwhile, Walmart has introduced a same-day delivery service and started to fulfill online orders through some of its stores in selected areas. Google Express enables store-based retailers to further leverage their physical assets for same-day delivery as a competitive advantage, as online specialists push their price credentials and shorten lead times.

Aiming to ensure that online shopping searches start at Google

To offer the service, Google partners with retailers and delivery companies, rather than operate any physical assets itself. The launch of the service comes at a time when Google’s core search territory is being encroached on by retailers such as Amazon, where many consumers start their search process, and Walmart, which has invested significantly in developing its own search platform, Polaris. Amazon has also been investing in other areas where Google specialises such as cloud computing and tablet development. Through partnering with retailers such Costco, Walgreens and Target, it can very quickly scale up and offer a broad assortment of products without the need to develop the physical infrastructure to support it.