Google, Amazon compete on same-day delivery

A parcel is seen on a conveyor belt before being shipped to a client on December 13, 2012 on the site of the online retailer Amazon.

Google is rolling out same-day delivery for online retail customers in West L.A. and Manhattan — offering products from a variety of retailers including Costco, Target, Walgreens and L'Occitane. Google has already been piloting the service in the San Francisco Bay Area.

Amazon has just launched same-day delivery in parts of Los Angeles as well, along with San Francisco, Seattle and Phoenix. And the two giants aren't alone. Wal-Mart, eBay, Nordstrom and other retailers are also in the ring.

But, same-day delivery is expensive and complicated. Most people shop online after work, meaning the vendor has a very short window to deliver that must-have bottle of champagne or designer scarf — possibly through rush-hour traffic.

What companies need to make it work, says management consultant Andrew Schmahl at Strategy& (formerly Booz & Company, a division of PricewaterhouseCoopers), is a densely-populated area full of well-heeled shoppers.

"People willing to pay more than free for a delivery," he says.

Which most consumers are not.

In a survey conducted by Schmahl, only 10 percent of consumers were willing to pay $10 or more for same-day delivery. And many don't even want same-day delivery at the end of the day — when they are having dinner, putting kids to bed, or possibly won't hear the delivery, leaving their package to sit on the front porch all night.

Amazon and Google are first testing the same-day delivery market in upscale neighborhoods in places like Manhattan, West Los Angeles, San Francisco and Seattle. Schmahl thinks Google might be plunging in to gather more data on online shoppers. For Amazon, he says, it's an attack on brick-and-mortar stores where you can get what you want, same-day.

"Instant gratification takes too long for most people," says Patty Edwards, managing director of investments at US Bank Wealth Management. "We don't want to have to wait, we want to have it right now. And yet we're too lazy to get it ourselves."

Edwards predicts that in time, same-day delivery will catch on in many urban and suburban areas around the country.


Where to get the best deal in the same-day melee 

by Tobin Low

With Google expanding its same-day delivery service in a growing market, it’s hard to tell who’s offering the best deal.

If you’re not in a big city, you’re mostly out of luck, as major companies like eBay, Amazon, and Google are mostly piloting their same-day services in larger metropolitan areas. That’s because the model largely depends on there being a high volume of vendors in a customer’s vicinity that sell the desired merchandise.

Still, it’s an appealing promise: order by a certain time, and have your items delivered to your doorstep that same day.

With each of the services charging about the same rate -- Google Express charges $4.99 an order, Amazon Prime members pay $3.99 an order, and eBay asks for $5 an order -- it's still too early to tell who will pull ahead in the same day ordering scheme.

For now, maybe try linking your Twitter account to Amazon, and tweet/purchase away.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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