Dive Brief:
- Google is set to test fresh-food and grocery delivery in San Francisco and another U.S. city this year, going-head-to-head with Amazon and Instacart.
- Partners in the new service will include Whole Foods Market Inc. and Costco Wholesale Corp.
- Online grocery delivery is already a $10.9 billion industry in the United States, and is expected to grow 9.6% per year through 2019.
Dive Insight:
This new service will roll out later this year in two U.S. cities including San Francisco, and compete directly with AmazonFresh, which is now available to select ZIP codes in six major metro areas. Only yesterday, Amazon announced it would offer new Prime Now restaurant deliveries in Seattle.
The move shows how important the grocery category is becoming for both online and physical retailers, as they look to capture the most dollars in this expanding market. Brian Elliott, general manager of Google Express, told Bloomberg that the company is adding fresh groceries to its offerings in an effort to give customers more options and increase profit and sales.
The search giant also announced that it will bring next-day deliveries of general merchandise to many areas in the Midwest via Google Express. Google Express already offers delivery services in New York City and Chicago in partnership with Walgreens, Kohl’s, and other retailers; if fresh-food delivery tests are successful, Google expects to be able to boost its market basket.
