Google Expands Itself To Grocery Delivery Industry

Google started to penetrate into the perishable delivery industry in a less risky manner.

Google is extending its own same day delivery facility to fresh grocery items, the most recent example of the company’s increasing push into the daily lives of consumers.

The search giant stated it would start delivering meat, produce, eggs, and other perishable products on February 17, 2016 in different areas of Los Angeles and San Francisco. This service will be provided under Google Express, which collaborates with retailers in some American cities for delivering products to buyers within hours after the order is placed.

Like most recent initiatives of Google that include speedy internet facility and Internet-connected thermostats, delivery of food sometimes is trickier. Delivery of fresh food especially is a well-stocked service that has been able to earn few profits.

Rivals include Safeway, Fresh Direct LLC, Instacart and Amazon but they, along with others, have not been able to easily earn money, in part due to historically low profitability of around 2% on sales of grocery items and high costs of delivery. In the previous year, when internet facility used to be slower, Webvan Group burned $800 million before it filed a bankruptcy in 2001 and ceased its operations.

While Fresh Direct and Amazon maintain costly refrigerated warehouses located near cities, the Mountain View based company said it would directly deliver from its current retail partners, which would avoid the risks of inventory ownership such as food spoilage. In the Californian city San Francisco, the mapping service provider will deliver goods of Smart & Final Stores, Whole Foods Market and Costco Wholesale Corporation.

Google said it is changing its existing delivery operation for accommodating fresh grocery items, like cutting down the delivery window of customers from 4 hours to 2 hours. It is also raising its minimum size of an order pertaining to fresh grocery items to $15 from $35.

For members of Google Express – the cost of annual membership is $95 – cost of delivering fresh-food will be $3 per order, compared with zero charges for delivering non-perishable goods. Non-members of Express would pay $5.

Google Express has recently suffered from some problems. Since November 2014, two officials have left it and the company closed two warehouses in San Francisco in 2015, including one where employees had tried to unionize.

Google has expanded Express to the entire California and Midwest’s most regions. It also said the elimination of warehouses has played a role in helping it to deliver fresh food items and expedited the facility.