Is Google a Threat to Amazon with New Membership Pricing?

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Google Shopping Express has been rebranded to Google Express. It has challenged Amazon’s membership pricing by offering the service for $95 a year, while Amazon offers its Prime membership service for $99 a year.

So what will this mean for Amazon?

Scot Wingo, CEO of Channel Advisor said he didn’t think this was a huge challenge for Amazon, as Google Express caters to a bit of a different customer base.

“Google Express does not have perishable [items] because they don’t have refrigeration,” said Wingo.  “The way I look at it is selection. Google Express in the [San Francisco] Bay area has 200,000 SKUs available, while nationally Amazon has 26 million products in Prime.”

Amazon’s Prime membership program offers free two-day shipping, same-day shipping at $5.99 and other benefits like Saturday shipping and free standard shipping.

Wingo said altogether, Amazon has 250 million products available for sale online. He said Google Express could gain popularity with its heavy items that you don’t see on Amazon, including items like heavy liquids, paper towels and everyday household essentials.

“I think it is pretty extensive for Google,” Wingo said of its product selection. “They’re bearing the cost of this courier network, so it must be pretty strategic to them to increase the amount of investment.”

Wingo didn’t think Google would gain share on Amazon with this move, when looking at the selection it has for consumers, it’s not going to change the Amazon behavior.

“I think consumers will try, I think it is a neat thing to try,” said Wingo. “It really is focusing on products that aren’t available on Amazon.”

Eric Schmidt, Google’s chairman said during a speech at Native Instruments in Berlin that while many may think Google’s biggest competition is Bing or Yahoo, its biggest search competitor is Amazon.

“People don’t think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon,” said Schmidt in his speech. “They are obviously more focused on the commerce side of the equation, but at their roots, they are answering users’ questions and searches, just as we are.”

Google Express is also expanding to Chicago, Boston and Washington, D.C.  Across all its cities more than 7 million people can now access its same-day delivery service and in Northern California almost 12 million can use its next-day service.  Their existing cities include the San Francisco Bay Area, West L.A. and Manhattan.

Google Express has also added a total of 16 merchants over the last couple of months.  National brands include 1-800-Flowers, Barnes & Noble, Nine West, PetSmart, Vitamin Shoppe and Sports Authority, as well as regional merchants such as Paragon Sports in New York and Vicente Foods in Los Angeles.  In Google Express’ new markets it has added regional brands including Stop & Shop in Boston, Giant Food in D.C. and Luxe Roses, Tiger Direct, Treasure Island Foods and Wrigleyville Sports in Chicago.

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