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Amazon v Google - The bout for retail dominance

When Amazon announced its then-seemingly outlandish delivery drone program late last year, financial news service The Street speculated that Google and Amazon would ultimately merge, creating a corporate monolith to rival the evil Tyrell Corporation featured in the sci-fi noir film Blade Runner. 

But now that Google has its own drone delivery program in the works, it looks like Amazon and Google will continue on as rivals.

Here are the various battlefields on which the two giants are fighting. In some cases, other companies are taking them both on.

Delivery

Drones are just a small — and still pie in the sky — chapter in a much bigger delivery story. Amazon has made a point of making fulfillment and delivery a key part of its retail strategy. The online retailer has expanded same-day andSunday deliveries, built more warehouses, and introduced “sortation centers” that don’t even contain inventory, but nevertheless do much to speed up fulfillment. The retailer now employs more robots then ever, too, all in the name of speedy delivery.

But Google — and others — are right behind Amazon. Google in particular has swooped in with same-day delivery options of its own in key cities, including a book-delivery program established with Barnes & Noble. 

Google Shopping Express, as its same-day delivery business is called, has gained attention for its healthy participation by at least a dozen retailers, including Target and Costco, and its favorable prices and terms. 

The rivalry in this area is attracting upstart competitors, too. Newegg recentlyannounced it's trying out same-day delivery for customers in Los Angeles. Taxi-service disrupter Uber has expanded its own delivery service in major cities, offering to bring customers medicines, lunch, and other packages. And services like Deliv, which is partnering with malls and Foot Locker to take packages off shoppers hands and onto their doorstep, are contributing to amad rush to offer retail delivery services. 

The Cloud

Amazon has dominated the cloud since launching its Amazon Web Services platform in 2006, with some 80% of market share. Because it was so early out of the gate, Amazon nearly invented the business and its technology has prevailed. Many people have never heard of this aspect of Amazon’s business, but anyone using Netflix, Spotify, or Pinterest, among other services, has used it. 

It may be that Amazon’s early start will remain an advantage. But many observers say that the time is ripe for Google and Microsoft to mix things up, pushing prices down, and introducing new technologies and better support.

This is another area inviting in upstarts. Besides Microsoft (hardly an upstart), consumer cloud services like Dropbox, which recently precipitously droppedits price for a terabyte of cloud storage for its Pro users, are a direct challenge to similar services by Google and Amazon.

Media

One of the biggest Google v. Amazon stories, and one of Amazon's biggest acquisitions, went down recently with Amazon’s purchase of game-watching site Twitch for $1 billion. 

Google was reportedly in lengthy talks to acquire Twitch for a similar amount. Google stepped away or Twitch opted for Amazon, depending on the news report. Either way, it has the potential to put Amazon in front of more eyeballs than ever before, in a way that makes more sense than the development of its Fire phone, according to Wired magazine.

Advertising and search

Late last year Google changed its product search to take on Amazon, creating product and price listings — what Google calls “product listing ads” —  that get shoppers to the “buy” button more quickly than before.

Google has also recently expanded its mobile-first location capability to desktops, so that consumers looking for an item will not only see its photos and prices, but also nearby stores where they could buy.

Google and Amazon are likely to continue to watch each other’s moves in several areas, from retail to the cloud, and all the overlapping areas in between. But in the end, they both will have other contenders to worry about as well. What is unlikely to happen is that one giant Tyrell-like victor will ever emerge.

Source:  Daphne Howland - Retail Dive

Read the original news article here.

17 September 2014

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