Google Testing Same-Day Delivery Service in San Francisco: Report

Google could be looking to expand its reach into more retail sales with the new service, according to a report.

Google has been testing a same-day delivery service in San Francisco for local retailers since February, a move that could allow the company to expand more into the turf of online retailer

"Google Shopping Express helps local retail stores sell products online and have the items delivered to shoppers the same day," according to a report by Reuters, which quotes a source who said they are familiar with the service testing. "Google arranges for third parties, such as couriers, to pick the products up from local stores and deliver the items to shoppers. Neither the stores nor Google handle the deliveries, the person explained on condition of anonymity because the service is still in the early development stage."

The experiment is being run by Tom Fallows, a Google product management director who has an extensive background in e-commerce, the report states.

Google, which is in the search and online advertising business, is always looking for ways to expand its markets, and the retail world is closely aligned with its search services as consumers go to Google to search for products, which they then purchase elsewhere.

The concept of expanding its reach into retail sales could help Google close that gap.

A Google spokesperson had little to say about the report in an email reply to an inquiry from eWEEK. "We are always working to build a delightful shopping experience for users, in close partnership with retailers, and to empower businesses of all sizes to compete effectively," wrote the spokesperson. "We will continue to work toward providing technology, tools and traffic to help power the retail ecosystem but have nothing to announce at this time."

For Google, the idea of same-day delivery makes sense, but it may be a very big challenge to take on Amazon and its established customer base, said Gene Alvarez, an analyst with Gartner. The big problem is that Amazon's Prime service, which costs $79 a year and allows customers to get most of their purchases with two-day shipping at no extra cost, is very established and has a dedicated throng of users who love it, Alvarez said.

Where such a plan could work for Google, however, is to make it faster and easier for buyers to get their online purchases when they are made through a local retailer.

"What's happening is that people want it now" when they buy online, he said. "The online retailers, especially Amazon, have been doing a good job of having the products and getting them to buyers."

That's forced retailers in general to get into this instant marketplace, said Alvarez.

Another competitor in the instant shipping category is, which offers free unlimited two-day shipping on a large number of items from a myriad of retailers for $79 a year, according to Alvarez. Some of the retailers include AutoZone, Calvin Klein, NewEgg, PetSmart, Sports Authority and Toys R Us.

Even eBay has been piloting its own eBay Now program, where buyers can order something online and a local delivery person goes out and brings it to the buyer, Alvarez said.

"You can see that there's a variety of these models now in getting things to you rapidly and predictably," he said. "I do think this is why Google wants to take on Amazon Prime."