Google vs. Amazon: Who Has the Advantage in the Same-Day Delivery Battle?

If you live in a select few parts of the country, two rival internet giants may be working very hard to bring you goods on the same day you order them.

May 6, 2014 at 12:20PM

Google (NASDAQ:GOOG) and Amazon (NASDAQ:AMZN) want a piece of the massive market still served by local retailers and are in an escalating war to offer the same-day delivery that's required to make that happen.

Google's Shopping Express service partners with local stores to offer delivery "in a matter of hours," according to the company. It launched in the San Francisco Bay Area last year and just expanded into West Los Angeles and Manhattan with further L.A. neighborhoods planned for later this year. Current partners include Costco, Guitar Center, L'Occitane, Staples, Target, Toys"R"Us/Babies"R"Us, and Walgreen on the West Coast with Fairway Market (a high-end supermarket) also being on board in New York. Google's service seeks to compete with Amazon's website (and its potential future expanded same-day delivery service) by offering a wide-range of items -- everything from food to household staples, toys, office supplies, and more.

Amazon has been looking at expanding its AmazonFresh grocery ordering and delivery service to allow it to piggyback non-grocery orders on its trucks as a way to justify the cost of building out its own trucking network. Amazon's grocery service is currently offered in the Seattle region as well as in San Francisco and Los Angeles -- markets it entered last year. The company is expected to expand to New York City next.

Google, on the Shopping Express website, promised that items would cost exactly what they would in-store. Customers will also be able to use in-store discounts and accrue loyalty points by providing their store rewards card information. The service can be used online or through an Android or an Apple (NASDAQ: AAPL) iOS app. Google is also offering six months of free, unlimited deliveries, though the company says that's for a limited time.

Google had to partner

Amazon already stocks millions of items in its warehouses and fulfillment centers around the country and offering faster delivery through those locations seems like a logical extension of it brand. Amazon is a giant store that sells everything from gum to lawn mowers so attempting to win more market share by increasing how quickly customers get something makes sense.

Google on the other hand is not a retailer -- online or otherwise. Selling anything -- let alone trying to compete with Amazon's store, which sells virtually everything -- feels less natural. But unlike Amazon, which is looking to replace traditional retailers (or at least take a lot of their customers), Google needs thriving retailers to make its service work.

This might be a good arrangement for Google and its partners as any smart retailer is looking for an answer to the looming threat of an Amazon same-day delivery service that offers more than just groceries. Staples probably could not offer same-day delivery on its own, but if Google provides the trucks it's probably worth it to the office supply retailer to cut the online giant in on the action. If Amazon takes the order than Staples gets nothing and loses a customer. If Google Shopping Express gets the order, Staples still makes the sale. It lowers the margin, but it's better to make less money than no money at all.

Amazon may have a pricing advantage

By partnering with traditional retailers and offering same-as-store prices, Google is pushing name brands, fast delivery, and fair pricing. Amazon, which would be selling goods from its own warehouses and fulfillment centers, often has lower prices than traditional stores partially because the company does not have the expense of maintaining stores. 

Google's partners won't want to undersell their own physical stores (which has held back the online efforts of many traditional retailers) so in markets where Google and Amazon offer similar services -- should that happen one day -- Amazon may enjoy an inherent price advantage that Google can't answer.

Neither company has a lead

Amazon's existing same-day offering is built around groceries but it also offers 500,000 items from Amazon including the categories offered in Google's service. It's very early in the game but neither company has shown that it has an offering that's different in any important way from the other. We are clearly a long time away from declaring a winner or even knowing if the market wants this type of service.

The market the two companies are competing for however is huge. According to the latest annual report released by the U.S. Commerce Department in 2013, total retail sales in 2011 were $4.7 trillion, which represents an 8% increase over 2010 total retail sales (including food service and automotive). Of course Amazon and Google are not likely to offer same-day delivery of cars and other parts of that $4.7 trillion won't be in play either, but basically these services give Google and Amazon a way to go after an awful lot of that business.

Amazon is looking to disrupt traditional retail while Google is looking to piggyback its infrastructure. Both approaches could work, but both could also fail as it has not yet been proven that people want more deliveries and less actual shopping. If I had to pick a winner today I would assume Amazon has a better shot because it already has a strong sales relationship with its customer while Google is new to that space and would be acting as a third-party facilitator. That's not counting Google out -- it will certainly have traditional retail on its side, which offers in-store marketing opportunities that Amazon can not match.

Either way for a long while as the battle ranges on, consumers are likely to benefit as the two side use deals, free offers, and other pricing tactics to encourage customers to pick their service.

Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

Daniel Kline has no position in any stocks mentioned. He does not mind driving to the store most of the time. The Motley Fool recommends and Google (C shares). The Motley Fool owns shares of and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers