Thursday, October 3, 2013

From Google, with Love

imageNew and expanding warehouses in all metro areas, same day delivery, free shipping over $25, Amazon Prime, Amazon Fresh, customer reviews, suggestions, hundreds of categories, millions of items offered through its “marketplace”, a large number of them “fulfilled by Amazon”: It looks like when it comes to retail, it has (mostly) been about Amazon in recent years. They set the standard and other (brick and mortar) retailers try to catch-up!

Most recently, two Amazon initiatives namely the same-day delivery and Amazon Fresh have generated a lot of buzz and discussions about how other retailers can or cannot compete. Now here comes a potential white-knight for these retailers from an unlikely source: Google.

Google quietly introduced the Google Shopping Express on 9/25. For now the service is available only in their Bay Area delivery zones, from San Francisco to San Jose. However, looking at what the service enables, it has the potential of changing the retail landscape and reset customer expectations once again.
Imagine same-day delivery with your preferred delivery window for merchandise from all your favorite retailers! Yes, that is right. Those are the three key differentiators that Google Shopping Express enables which is going to be hard to beat. Here is why:
  • Shop ALL your favorite retailers: If you were retailer, even if the largest retailer on earth, you probably still won’t have the assortment to match with a combined assortment offered by a group of retailers. Of course, Amazon gets exemption on this count since they already offer almost anything you will ever need from deck nails to nail polish and everything in-between. But leaving apart Amazon, most retailers don’t have the ability to extend their assortment at will (and profitably and without affecting their branding, and without affecting their niche targeting and so on). But Google Shopping Express makes it all available through a single portal: In one big shopping cart, you can now pick up your groceries from Whole Foods, toys from Toys R Us, meds from Walgreens, fall jackets from Target, and your camping gear from REI.
  • Get it all delivered the same-day: Google Shopping Express will then pick up all your orders from across town from all your favorite retailers and deliver it to your door-step. On the same day.
  • Same-day and choose your own delivery window: Then, you select a delivery window that is convenient to you and Google will make it happen! And it runs till as late as 9pm – so no need to hurry back home early in the afternoon so you can catch the delivery.
  • Feel good bonus, all-hybrid fleet: Now if you were having any heart-burn around all these little small local deliveries being made across town, take heart! Google Shopping Express has an all hybrid fleet for the service.
  • Finally, the ultimate convenience, shop where you are: Own a smart phone (and who does not)? Good, download your Google Shopping Express app from the Google Play Store or the iOS App Store and order away. You can order the essentials, search for items, or browse all different stores and still get them delivered the same day.
So why is this great news for retailers? Any retailer going it alone will need gobs of cash for a comparable infrastructure, but when a company like Google sets it up, the costs of creating and sustaining that infrastructure get divided among the larger eco-system of customers and retailers. It is easier to fill-in the vehicles making the rounds making the loads more efficient and it is easier to cram more deliveries on every route making the route more efficient: Both these factors directly reducing the cost of deliveries.
But what do the retailers need to do? They will need a good order fulfillment process from their stores since that is the key. To profitably fulfill from the stores means these retailers must have the capabilities for publishing accurate inventories consolidated across co-located stores, processing orders on time, schedule labor and have them picked/packed and ready for pick-up by Google Shopping Express. If they can do all that, they are golden! And for once, they actually have a chance for competing against the Amazon’s (retail innovations) onslaught!         
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Want to know more about supply chain processes and supply chain strategy? Check out my books on Supply Chain Management at Amazon.
© Vivek Sehgal, 2013, All Rights Reserved.

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