Retailers Abandoning Google Same-Day Delivery

Three key retailers—American Eagle Outfitters, Office Depot and Lucky (grocery)—who had been part of a Google same-day delivery service called Google Express have now changed their minds and withdrawn, according to a report in Fortune.

The story did not say those retailers pulled out (“Why Office Depot, American Eagle Outfitters and Lucky pulled out of Google service is unclear. All three either declined to comment or did not respond to messages”) but the timing would seem related to Google’s Wednesday (Oct. 15) announcement that it will change the service from being free to shoppers to costing either $10/month or $95/year.

Fortune quoted retail analyst Greg Buzek as speculating on some reasons why the chains might have pulled out, but the reasons cited would all have been known to those retailers before they joined. In other words, if those were the reasons, those retailers never would have joined Google Express in the first place.

“The reason for Office Depot dropping out may be because it already has its own delivery service, making Google’s unnecessary. Meanwhile, (Buzek) said same-day delivery makes little sense for a clothing retailers like American Eagle,” the story said. “Customers who need same-day for clothing can’t afford to take risks with getting the wrong size and fit, Buzek said. Those who can afford to do so are a small market. Buzek also pointed out that same-day grocery services have historically struggled. Customers typically prefer to order from home and then pick up their groceries in the store unless they live in a densely packed urban area that makes parking difficult. ‘Either the retailers are going to do their own thing or there are data-sharing issues they are concerned about,’ Buzek said. ‘Perhaps there was concern about sharing customer’s data and potential customer push back.'”

Google Express initially had 35 retailer backers, including Whole Foods, Costco, and REI. All retailers pay Google a commission for every delivery sale.