Google is determined to compete with Amazon on same-day deliveries

Google has been slowly expanding its Shopping Express service over the past year in a bid to compete with Amazon on same-day deliveries. For now it’s still only available in and around San Francisco, Los Angeles, and New York, but according to a new report from Re/code the service is about to expand nationwide as Google fights to control the future of product search. One anonymous source with knowledge of the company’s plans claims the search giant has already earmarked as much as $500 million to bring Google Shopping Express from a few cities to the entire country. In a statement to Re/code, Google essentially confirmed the news without revealing how much it plans to spend on the service. Google could potentially earn back that $500 million pretty quickly, especially with the grocery business currently valued at $600 billion. Convincing people to search for groceries and other products through Google instead of Amazon also means more page views, more clicks and more advertising dollars for the company.

Google is the undisputed king of search in all but one lucrative and vital category: Product searches. Over the past decade, Amazon has transformed itself from a seller of books online to the place Americans turn to when they want to search and buy just about anything — from diapers to flat-screen TVs. In some cities, Amazon has started delivering fresh groceries. With each product search that starts on Amazon instead of Google, the search giant’s main business of selling ads alongside search results weakens. Though Google over the years had experimented with letting consumers buy goods with the help of services such as Google Wallet and Google Checkout, it accelerated this strategy in 2013 with Shopping Express. The service lets shoppers buy things from local retail stores through Google, which then delivers them to consumers from the physical retail store on the same or next day. A source familiar with the company’s plans says senior Google execs have set aside as much as $500 million to expand the service nationwide. Google declined to comment on the size of the investment but made no secret of its ambition. “You can very much expect that we are putting a lot of money into this and we’re excited and willing to sustain that investment over time as this gets going,” said Tom Fallows, head of Google Shopping Express. Investment so far has gone toward the marketing of the service in each new city and the buildup of a fleet of delivery vehicles, as well as toward paying for a network of couriers and workers to pack up the goods in stores and deliver packages to shoppers’ doorsteps.