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Google May Focus on E-Commerce Rather Than Stores for Retail Strategy

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After denying rumors that it would be building retail stores similar to those operated by Apple and Microsoft, it appears that Google may be gunning instead for Amazon with a new e-commerce strategy. The Internet search giant is now speculated to be partnering with physical retailers with promises for same-day delivery to take on Amazon’s Prime service.

urlAmazon had launched Amazon Prime as a subscription service that allows customers to get free two-day shipping on most orders and pay a nominal $3.99 shipping charge per item for overnight shipping. Prime also bundles free streaming service with a limited catalog of on-demand Prime videos that includes TV shows and movies, similar to Netflix. Additionally, Prime Kindle users get a free book rental without expiration dates every month. The entire service costs $79.

It’s unclear if Google’s Shopping Express competitor will offer similar bundling at this time.

According to Techcrunch, Google’s new Shopping Express service will be priced between $64 and $69 per year and offers same-day delivery through partners. Potentially, the blog speculates that partnership agreements can be made with Target, Walmart, Walgreens, and Safeway. Google’s service will be priced cheaper than Amazon’s and offers much faster delivery.

There is little information about how the service will work, but hopefully Google will make the offline to online shopping experience easier for mobile users with a speedy mobile-optimized app. Of course, Google will use its Google Wallet service–similar to how Paypal works for eBay Now using PayPal to process payment–to handle payments and charges.

And hopefully, for Google Shopping Express subscribers, hardware and accessory purchases in Google’s Play store would enjoy the same-day delivery service as well. This would help Google make its popular Nexus smartphones, tablets, and accessories available quickly to customers.

Though many of Google’s products are being stocked at retail stores like Best Buy, Target, and others, this service may allow customers and business professionals who may not have time to try a product in a store before making a purchasing decision to try the product at home. Customers can order the product, test it out to see how it fits with their usage scenarios, and make a decision that way. As Google is increasingly entering the hardware space, an expedient e-commerce retail strategy may help make its products more widely available to customers.

Other products that may benefit from Google’s Shopping Express service include the newly unveiled Google Chromebook Pixel as well as the forthcoming Google Glass wearable computing device.

A Google shopping experience may be another digital storefront for Google. As Amazon is able to sell its Kindle Fire tablets at or near cost because it can generate revenues through future sales of content and goods from Kindle Fire owners shopping at Amazon.com, a Google Shopping Express experience can help Google monetize and even subsidize costs of more expensive products, such as Google Glass and Chromebook Pixel. In the future, Google can offer both products at cost or even subsidize both products as devoted users may use Google Shopping to buy goods and products. Google would be able to make money through those purchases that way.

With Google rumored to be launching a music subscription service via its YouTube brand, it could potentially also go the Amazon route and bundle some free streaming subscription, replacing videos in Amazon’s case for music.

TechCrunch believes that the company is already testing the Shopping Express service internally with employees. A launch date is not yet known.

Tech enthusiast in Silicon Valley enjoying the possibilities of ubiquitous connectivity, information sharing, and collaboration enabled by mobile broadband. You can contact Chuong on Twitter @chuongvision or search +chuongvision on Google+.

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