The Future of Online Shopping
Alec is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The future of online shopping is coming. Twenty years ago, you had to physically go to a store to purchase goods. Ten years ago, you could sit at your desk and do the same thing. Right now though, people can sit at their desks and have goods shipped to them in a matter of hours. This is the future of online shopping.
There are three main players that have already taken the first steps towards same-day shipping. Google (NASDAQ: GOOG) recently announced they were planning on launching “Google Shopping Express” which will facilitate same-day delivery from stores like Target and Wal-Mart. The service is rumored to charge a lower fee than Amazon’s (NASDAQ: AMZN) Prime service, which offers free two-day delivery, among other things (like free movies and shipping). Furthermore, eBay (NASDAQ: EBAY) also has its “eBay now” program that allows people to buy goods and have them delivered within the hour to select markets.
Let’s address the pros and cons of each company’s business model and see how they compare with each other.
Right now we don’t know too much about Google’s play here. If the rumors are true, they will offer a cheaper and quicker way to deliver goods. The concept is that people will go to Google’s shopping website and purchase goods available at big time retailers, and then have them delivered a couple hours later. It’s also important to note that Google wouldn’t necessarily be the seller of goods, just the medium between items and stores that’ll deliver them. Also, I’m sure a portion of Amazon’s sales come from Google searches, and if Google just puts a “Buy Now” option right on top, then it’s that much easier.
Amazon is already in the game with its Prime service. Although Prime doesn’t offer same-day delivery, Jeff Bezos is doing everything in his power to ensure that Amazon will be the leader in that area. Even if Amazon is more expensive compared with Google, there are many more benefits in addition to just free two-day delivery. First, the delivery would be free, and like I said earlier, you also get free movies (that are actually good), free release-date delivery of video games, and a free Kindle book to borrow every month. Some people may think that all those extra features are worth the higher cost.
“eBay now” seems to be the sweet spot of them all. You download the app on your iPhone, look up the item you want to purchase, and when you buy it, eBay uses the phone’s GPS location to send a valet to pick up the item at any of the following stores: Babies R Us, Best Buy, Free People, GNC, Guitar Center, Home Depot, Macy's, Office Depot, Radio Shack, Target, Toys R Us, Urban Outfitters, and Walgreens. These stores depend on the geography of your location, and as of right now it can only be offered in San Francisco, San Jose, and parts of New York City. eBay charges $5 per order, and has a $25 minimum purchase requirement, and as the customer you can call the valet after you make the purchase to give special instructions.
These are three very plausible yet different business models on same-day delivery. Google, Amazon, and eBay each have their own benefits and drawbacks, but the fact I’m trying to make is that the industry is moving towards same-day delivery. If Google’s plans come to fruition, then Amazon will have to act fast to compete with an infrastructure already in place. If Amazon is able to offer same-day shipping while keeping costs and prices low, then Google’s venture will have heavy competition. eBay’s same-day delivery program is still in beta, but if the company expands the service to more locations, Google and Amazon could face a tough battle. What I’m trying to say is this will become the new standard, and I believe that ten years from now, we will look back to today and think how crazy it was to wait a couple days for something to get delivered. Thanks for reading.
Alec Eiber has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, eBay, and Google. The Motley Fool owns shares of Amazon.com, eBay, and Google. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!