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

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.

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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.

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

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7 comments
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  • No Thanks Amazon

    Same day service on amazon allows people to get the merchandise they overpiad for on amazon quicker.
    Dow Jones reports that amazon's prices are higher than other retailers 70% of the time.
    I found this to be true. Before buying anything, I search bing, Google, best buy eBay as well as other sites.
    Amazon is always more expensive and I find all my products elsewhere for much, much less. In the past month alone, I have saved over $700 by shopping elsewhere and not amazon.
    Additionally, all these sites offer free shipping without having to pay a yearly fee like amazon. Why pay $100 when others offer it for free and on top of that, amazon charges more.
    Anything amazon sells, I can fi d much cheaper elsewhere, with free shipping and great customer service. No reason to shop amazon unless you like to overpay.
    $vix
    • Dubious assertions

      It's demonstrably false to claim that "Amazon is always more expensive."

      I just used PriceJump ( http://www.savings.com/pricejump ) to search 5 items from my Amazon wish list. For every single item, PriceJump reported "Buy from Amazon. We're unable to find a better price."

      For some things, Amazon may indeed be higher (although I have often found exactly the same item on Amazon at widely varying prices), but apparently not for the types of things that interest me.
      S_Deemer
  • No Thanks Amazon

    Same day service on amazon allows people to get the merchandise they overpiad for on amazon quicker.
    Dow Jones reports that amazon's prices are higher than other retailers 70% of the time.
    I found this to be true. Before buying anything, I search bing, Google, best buy eBay as well as other sites.
    Amazon is always more expensive and I find all my products elsewhere for much, much less. In the past month alone, I have saved over $700 by shopping elsewhere and not amazon.
    Additionally, all these sites offer free shipping without having to pay a yearly fee like amazon. Why pay $100 when others offer it for free and on top of that, amazon charges more.
    Anything amazon sells, I can fi d much cheaper elsewhere, with free shipping and great customer service. No reason to shop amazon unless you like to overpay.
    $vix
  • My Worlds not Black and White... and I Admin I Shop Amazon, and...

    I admit, I shop Amazon, and Best Buy, and Zulilly, and Home Depot, and...
    I shop where ever the best value is, and it isn't always price that determines best value. I'll pay a bit more if I can get the item locally, or if I have an established Positive relationship with the vendor. The Google/Barnes and Noble partnership doesn't meet that criteria. I've bought hundreds of books from BN, but poor service, lousy customer service and increasing frustration caused me to find other sources, to include Amazon. And while not perfect, my Amazon experiences have been far superior to most others.
    rmasters@...
  • Amazon Loyalist

    I probably spend more retail dollars with Amazon than any other place. And as Amazon has expanded services, I expand with them. I bought into Prime because I ordered so much stuff I could save a lot on shipping and get things faster. I bought into PrimeFresh because I order groceries for delivery through a local grocery chain and they do a very mediocre job of it. PrimeFresh is definitely more expensive due to it not having "house brands" but they make up for it by having a wider selection of organics and high-end products. If you want cheap, drive your station wagon over to Ralph's/Kroeger's and spend your free time walking the aisles and standing in a checkout line. I have better things to do.

    A couple of days ago I broke my headphones and wanted a fresh pair. I placed my one-click order on Amazon at 2 PM and had them on my head by 5 PM. Since I was on the clock, I woudl have had to get in the car and drive over to Best Buy or Fry's in 100° heat, walk the store, stand in line, get back in the hot car... and I would have spent about the same money.

    Maybe some things do cost more with Amazon, the groceries do to some extent, but I'm sure some other merchandise does as well. It isn't always about the rock bottom lowest price though. Amazon has what I need when I need it and with One-Click, I take a hot minute to place and order and go back to my day. If anything goes wrong, Amazon will absolutely bend over backwards to make it right. For example, one order from Fresh had some broken eggs... it happens. I emailed them and they promptly refunded the full price of the eggs and then gave me a $35 promotional credit on my next order. For three cracked eggs! Vons won't do that. To me, that kind of care is well worth paying a bit more on some things.

    It's not for everyone, I understand that. For me, it's absolutely everything I want and more. They just added a new wireless device I got for free which I keep in the kitchen to order groceries. I can scan the barcode on an empty container as I toss it in the trash and it puts the item in my shopping list for my next order. If there's no bar code, I can speak the name of the product or even just say "butter". Maybe that doesn't appeal to you, but I love it.
    JoeFoerster
  • Fan of Both

    I'm a fan of both Amazon and Google, and contrary to what $vix asserts, in my experience, Amazon is usually at or very close to the lowest price, and many Amazon merchants still ship for free and don't charge sales tax. That said, if I find something cheaper local, I will buy local, especially if there is a chance of a return. As an example, I saw an Eveready LED lantern at Target last weekend for $35. The same lantern was $20 on Amazon, but a few reviews suggested uneven quality control, so I ended up buying it at a nearby Home Depot for $25, in case I have to return a defective unit.

    I don't see what Google brings to the table. Larry nails it with "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's customer service is second to none, and on the rare occasions that I have needed to contact them, they have often gone beyond what was required to help me. Service like that buys continued customer loyalty.
    S_Deemer
  • Quality Of Experience will out

    It's going to come down to Quality Of Experience, like it always has; why this still mystifies people is somewhat baffling, but there you have it. Amazon has made early gains with QOE, but they are hardly unassailable with their current approach, with no real solutions on the horizon. Leading with price simply makes you a commodity, easily dumped the moment someone offers something cheaper. Just ask Kmart, Sears, or Wal*Mart how that strategy is working out. Wal*Mart could just as easily buy out B&N, rebrand walmart.com, design an effective, holistic customer approach, and flatten Amazon in a few years-or they could continue to do what they're doing now, and go the way of the dodo. Nobody really has a complete approach to e-commerce, and same day is a flea bite on a elephant's backside, with physical books being pretty much obsolete, what with the 21st century doings and goings on and whatnot.

    Amazon is a smart, aggressive, forward thinking organization. They are also narrow minded, insular, and their analysis tends to be superficial. They've got essentially the same goal as Apple, with a significant variation; Apple wants to control the ecosystem, to control the quality and enhance the brand; Amazon wants to be THE middleman, and nothing more. Their bottom line is temporarily pretty hot, but the CS numbers aren't great; 3rd part supply chain is lucrative and scalable, but the QOE is simply inconsistent with the early performance in their traditional vertical-customers expect the same reliability and experience they got with ebooks and media, and they aren't getting it with lawnmowers and washing machines. This is going to get WORSE as they expand their footprint, not better-unless they are much better at hiding their initiatives than they have been in the past.

    Comparing them to Google is pretty much charity, since it's Apple, not Google, that is Amazon's opposite number-just like it was Apple and Microsoft in the previous decades. Amazon has put themselves in Microsoft's shoes, with a similar play; it's unlikely to be a more successful strategy this time around, either. As for Google, it's nice to see they finally figured out what game they have been playing for the past decade; it was a bit embarrassing to see them trying to play volleyball in a boxing match. Spectacular sales quantity figures may impress wall st. 'analysts', but it's dead end, commodity, one time sales with low margins. Content is the gift that keeps on giving, and i doubt half the Android users have even realized Google Play commercials or campaigns actually are supposed to make them want to get content from Google, much less be persuaded by them. Amazon is enjoying the lift from being the first real attempt at a complete consumer approach, and like Palm or Apple with the Newton, or Nokia and Motorola in wireless, they think that's a guarantee of future success; in fact, they simply are handing anyone who is paying attention a model to improve upon.

    Historically, not a good role. But then, history has a way of kicking the backsides of people and organizations who ignore it.
    kevinish@...