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Will Google Kill the Big Box Store?


The milkman is back, but this time he’s driving a Google truck. Google is pioneering a new same-day delivery service that brings groceries and other items purchased online straight to your door. Here’s how it works:

A mix of national, regional and neighborhood merchants are enlisting in Google Shopping Express. The best-known names on the list include Target and Walgreen. All the merchants in the Google program will sell certain items through a central website. Google has hired courier services to pick up the orders at the merchant stores and then deliver them to the customer’s home or office.

Right now, Google Shopping Express is only in a pilot phase, and it’s not clear yet if it will be profitable enough to scale nationally. But there are plenty of competitors out there trying to make this model work. Take Indochino, a site that lets you order customized men’s suits tailored to your measurements and then delivers them to your door no later than five weeks after purchase.

To the extent that these companies find ways of making online shopping even easier and faster than it currently is, there will be less and less demand for big, one-size-fits-all stores. If same-day delivery becomes a routine part of online shopping, it’s lights out for Big Box Store America.

Where we’re likely headed is more efficient, personalized online shopping mixed with boutique bricks-and-mortar shops for those who still want the in-person, face-to-face experience. Farmers’ markets and local bookstores, for example, may be able to survive alongside online shopping in a way that factory outlets, malls, and big box stores can’t.

Some chains see this future coming and are working furiously to guarantee that they will be able to thrive in it. Right now, Walmart is expanding its e-commerce business. And it’s considering crowd-sourcing delivery by giving in-store customers discounts if they deliver items purchased online to other customers. In the future, Walmart could exist only as a series of warehouses that tomorrow’s milkmen use to restock their cars.

This is good news for all of us, and for the environment. Between promoting safer, more efficient Google cars and helping consumers cut down on wasteful, time-consuming shopping trips for life’s necessities, Google’s profit-seeking activities could end up doing more to help the environment than all the green activists in the world.

[Image of Milkman Courtesy of Shutterstock]

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  • Thirdsyphon

    Clever, clever, Google. I’m sure that Amazon and Alibaba are paying close attention to this development as well.

    An interesting challenge that’s being created by the rise of online merchants is the practice of “showrooming,” whereby people will visit their local retail store to *examine* their prospective purchases, and then go home to actually *purchase* them from a competing web-only vendor that can offer them deeper discounts because it doesn’t have to pay the cost of operating brick-and-mortar stores. Best Buy is being particularly hard-hit by this phenomenon, because big-ticket items like computer systems and home theaters are things that consumers are reluctant to buy without getting a good look at first, but are also expensive enough to make it worthwhile to shop for them twice (once in person and once online) in search of a discount.

    One possible solution to this practice is for stores to charge customers a small fee just to walk in the door, which is treated as a credit against their purchase price if they should happen to actually buy something. That policy is predictably controversial, and so far it hasn’t exactly been greeted with cheers from happy consumers, but it could well be the future of retail.

    Another answer is the one that Apple came up with: a seamless monopoly on how their products are manufactured and sold. Nobody *has* to buy their Apple products from an Apple store, but nobody’s selling them for substantially less; and no matter who you buy them from, unless the devices fell off the back of a truck, Apple makes its money. That might also be the future of retail. In the electronics sector, Sony already has proprietary retail stores, and in other areas of the economy, like clothing, stores like Bannana Republic and The Gap have been using this business model for decades.

    A third possibility is that retail stores could simply opt to include online vendors in their price-matching guarantees, which would eliminate the need for customers to make their actual purchases elsewhere. . . but it would also cut deeply into the profit margins of stores that are already in trouble.

    • Corlyss Drinkard

      Regret doing that showrooming thing to my local Borders. I just won’t pay top dollar for an ordered reprint when I can usually get the same thing on Amazon for $0.01 plus postage. Setting aside for a moment the fact that Borders’ HQ were clueless about the book business, I felt really bad when my local store folded – I enjoyed the people who worked there and the big expansive accommodations for just sitting and sampling. I never did showrooming with Best Buy but just don’t patronize the place anyway because it is so dark and gloomy in the stores. The need a different décor that makes it more inviting, or at least less depressing, to shop there.

  • Corlyss Drinkard

    Seems to me that grocery service has not fared well in the internet age. The concept never appealed to me because I have lived in witheringly hot climates where I was almost guaranteed never to be home when the delivery people wanted to deliver. If every vendor was staffed on the delivery side 24/7, that would be one thing. But most vendors don’t have delivery at 2 AM.

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