Tech giant Google has their hands in a lot of pies. The latest pie that their testing out is their grocery delivery service. They are testing out their fresh food and grocery delivery service in two cities in the U.S later this year.
They will be going up against competitors Amazon.com Inc that started their AmazonFresh service earlier this year and startup Instacart Inc.
The trial will begin in San Francisco and another city, said Brian Elliott, general manager of Google Express, which already delivers merchandise, including dry foods, to customers. Whole Foods Market Inc. and Costco Wholesale Corp. will be among Google’s partners for the new service, he said.
“For a lot of our merchants that have been successful with this, we’re not representing the whole store today,” Elliott said in an interview. “It’s in our incentive, as well as the merchant’s incentive, for us to help customers get the full store delivered to them.”
Google is heavily investing in deliveries for home and business in a bid to increase traffic on their sites. Online groceries are a $10.9 billion industry in the U.S., and the market is expected to grow 9.6 percent annually through 2019, according to a December report by IbisWorld.
Their rivals Amazon are slightly ahead with their announcement of entering the restaurant delivery business as well on Tuesday.
The fresh-food trial, including fruits and vegetables, is part of a move away from making deliveries from warehouses, which can add complexity and requires refrigeration, Elliott said. Giving customers more options should help to boost profit and sales, he said.
“If I’ve got to pay someone to drive the product from point A to point B, the bigger the basket size, the more revenue I’ve got to offset that cost,” he said.