Public launch of Google Shopping Express a challenge to Amazon, eBay

Taking a detour from search and software, Google today publicly launched a service that delivers within hours online purchases from local retailers to Bay Area residents.

The public debut of Google Shopping Express – one of the largest same-day delivery services available, rivaled perhaps only by eBay – underscores the growing importance of the local commerce market, and the potential for advertising revenue and to collect even more data on consumers by being the link that connects retailers to customers.

Shopping Express started last year as an experiment on Google’s Mountain View campus, and little by little, over the last six months, the company added members of the public to test the service. Consumers had to apply and some waited weeks for approval. (Google wouldn’t say how many people it let use the service during testing, but likely there were several thousand.)

Now, anyone living and working in San Francisco, the Peninsula and parts of the South Bay will be able to use the same-day delivery service. And reviews from many customers have so far been favorable, with shoppers saying they like the speedy front-door delivery. But some have commented on the lack of product variety offered on the site.

Shopping Express is a Web and mobile site — which went live online at 7 a.m. — where customers can shop from more than 15 Bay Area retailers including Walgreens, Nob Hill Foods, Staples, Blue Bottle Coffee, Target and Palo Alto Sport Shop and Toy World, and Google will deliver the purchases that day within a three- or five-hour window. The cost is $5 for each store pickup, although through the end of the year Google is offering six months of unlimited, free deliveries.

Google also launched today a Shopping Express app – a necessary addition with the rise of mobile commerce – and announced that Whole Foods and REI had also joined the delivery service, adding more high-profile national retailers to the site. The apps went live this morning on the Google Play Store and the Apple App Store.

Today’s public debut of Shopping Express signals that Googlers, led by Product Management Director Tom Fallows, believe they’ve solved a retail puzzle that has spelled the death of dot-com companies including Webvan and Kozmo, and stumped even giants like Amazon.

“We learned a lot from our pilot, and found a way to apply Google’s strengths in technology to things like finding the most efficient delivery route,” Fallows told this newspaper. “That allows us to give customers a really amazing same-day delivery experience from their favorite stores at an everyday affordable price.”

He added that “we are really fired up” and “this has been a long time coming.”

(We reported on the expansion plans for Shopping Express last month.)

It wasn’t smooth sailing for Google. Some local retailers who were early partners in the delivery trial said they were a bit surprised to see Googlers stumble through the logistics.

“When it launched, they clearly hadn’t thought everything through,” said James Freeman, chief executive officer, founder and president of Blue Bottle Coffee.

Amazon will likely be paying close attention to Google, especially as the Seattle-based company prepares to bring its local grocery delivery service, AmazonFresh, to the San Francisco Bay Area this year. Amazon offers same-day delivery in about 11 cities – none in the Bay Area — although customers must order by 7 a.m., which “defeats the whole purpose,” Matt Nemer, a retail analyst with Wells Fargo, told me in an interview in August.

And Shopping Express is eBay’s first large-scale competitor in the Bay Area. San Jose-based eBay last year launched eBay Now, a service that delivers online purchases from local retailers – many of the same merchants that Google offers – in an hour. eBay Now is available everywhere Shopping Express is, and the company has also added service in New York, Dallas, Chicago and will be in the UK by next year, and expanded its web and mobile applications.

There are some differences between the two services. eBay Now drivers are more like personal shoppers, while customers can’t (yet) call or text Google drivers to discuss purchases or get updates on their whereabouts. eBay Now drivers are a bit more nimble and will also deliver just about anywhere – drivers have gone to bars, parks, outdoor cafes and back alleys in San Francisco Chinatown – and can make last-minute changes to delivery destinations if the customer asks.

Google’s delivery is less intimate but provides the framework for a service that could easily scale to a national operation, some experts say. That’s good news for many brick-and-mortar merchants, who say same-day delivery will help them serve more customers who otherwise would shop from Amazon or other online sites. Google has not been charging merchants to be part of Shopping Express — but most experts expect costs will increase for both retailers and users.

The company is staying silent on where it might expand Shopping Express next, although Fallows said on Tuesday he wants to add more zip codes, but the company is moving ahead cautiously.

Image courtesy Google

Heather Somerville Heather Somerville (200 Posts)

Heather Somerville is a business reporter covering venture capital and startups for the Bay Area News Group.