Need to find a top-notch Italian restaurant? Want to know the definition of “advection”? Forgot to buy mom a birthday present and need one delivered in hours? Google it.
Google (NASDAQ:GOOG) will soon offer same-day delivery in San Francisco by partnering up with local companies to provide select products mere hours after being ordered, according to The New York Times.
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Retail is a foreign, yet necessary business for Google — especially same-day delivery. Amazon (NASDAQ:AMZN), Wal-Mart (NYSE:WMT) and eBay (NASDAQ:EBAY) all offer same-day delivery and, if the service keeps gaining momentum, Google will not want to miss out.
Google’s test-run in San Francisco will serve as a strong indicator of whether or not they can compete. By choosing a city in which Amazon does not currently offer this service, Google has given itself a fighting chance.
Google’s business model won’t include its own delivery service or operational warehouses, and thus will have some kinks to work out. Being in a city that Amazon doesn’t service allows Google some breathing room — that is, until Amazon extends its same-day delivery into the Bay Area, which it undoubtedly will now that Google’s plans have leaked.
When they come out, logistical details of the service will also play a key role in the model’s efficacy. Ideally, Google would undercut Amazon’s charge of $8.99 per shipment and $3.99 for gift card orders. However, issues such as delivery time and variety of products offered could make any pricing issues moot.
There are still a plethora of questions regarding Google’s same-day delivery, but by choosing to participate, Google has given itself a chance to cash in on what may become a billion-dollar industry.
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