Why Google Express, B&N vs. Amazon is apples and oranges

Summary:Google Express may prove to give Amazon a run, but ultimately the customer relationship will win out. Advantage Amazon.

Google and Barnes & Noble are reportedly teaming up to offer same day delivery of books. The partnership, powered by same day delivery service Google Express, has been billed as yet another Amazon killer. Meanwhile, Amazon just expanded its same day delivery service to more regions.

Naturally, tech scribes can't resist the Google vs. Amazon battle storyline. Perhaps Google and Amazon are combining to enable a little e-commerce impulse buying and immediate gratification to battle physical retailers. Or maybe Google and Amazon are just trying to kill each other — in the cloud and everywhere else. But there's a good case to be made that comparing Google Express, expanded Amazon's same day service and even eBay's experiments with delivery just doesn't make sense.

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Why? Amazon can do same day service and take a loss on it — like it does most of its businesses — because it ultimately owns the customer. Amazon in many respects will have a business model that looks like a wireless carrier: Acquire the customer, grow the average revenue per subscriber. Amazon also has multiple affiliate partners to aim at Google Express. 

For Amazon, same day delivery is evolution and a business imperative to own retail. For Google, Google Express is likely to be a distraction at worse or yet another beta project best case — even if Google's robot vehicles do the driving. It's also unclear whether Google has the logistics expertise to scale. 

Google Express, primarily available in the Bay Area, Los Angeles and New York, will be used by Barnes & Noble but it's unclear who owns the customer relationship. Or how the customer service will ultimately come together. Keep in mind that the customer relationship and the data that goes with it are a company's best — arguably only — asset that matters.  

express cart
Who owns this relationship? Google or New York grocer Fairway?

Amazon has the customer service infrastructure and logistics for same day delivery. Ultimately, Amazon moves enough stuff to the point where cutting out UPS and FedEx could actually boost profit margins. Amazon's same day delivery could ultimately be another tier of Amazon Prime.

Now let's consider Google Express. Google Express connects to retailers such as Costco, Target, Walgreens, Whole Foods and Guitar Center (just for those of you that need a guitar this second). Google appears to have the front end cart, pulls from partner inventory and ultimately will charge for membership. 

But instead of Google Express as a shipping option, the search giant jumps in front of the customer relationship and shopping cart. Eventually, Target, Walgreens and other Google partners will wonder whether the incremental sales from Google Express will be worth losing a touch point. After all, UPS and FedEx can get you goods, but they focus on the shipping and don't ultimately run away with your customer data.

Barnes & Noble was quoted in a New York Times story saying that Google would expand its market by getting it more customers. Maybe. But there's little chance that Barnes & Noble will get much traction with the help of Google. If anything, B&N becomes plumbing so Google can deliver and sell books.

The customer relationship and the data that goes with it will ultimately matter more than Google's ability to deliver something to you quickly. Amazon won't have those issues since it'll own the relationship throughout the transaction.

Topics: E-Commerce, Amazon, Google

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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