On Wednesday morning, I realised I was out of nail
polish. Five hours later, I had a bottle of Scarlett O'Hara red
delivered to my apartment. It was ferried to me in a car in an
individual Ziploc bag emblazoned with a picture of a parachute and a
familiar logo – via Boston's newest same-day delivery service, Google Express.
Google Express is the tech giant's latest
way of reaching into our lives, offering kerbside drop-offs of sundries
like laundry detergent, baby toys and snack food. You order what you
want online or via a smartphone app. A third-party courier then runs out
to the appropriate store and picks it up, wrapped in Google packaging. A
few hours later, it arrives on your doorstep. The service, which offers
free delivery for an annual $95 membership fee, was launched in March
last year in San Francisco and then New York. Last week, Google
announced that it was rolling out the service in Washington DC, Chicago
and Boston – bringing about 19 million Americans within its reach.
Google isn't the only company rushing to
deliver products in the same way as pizzas – the field of same-day
deliveries has exploded in the past few years. eBay now offers a similar
service in five US cities. So too does Amazon, which recently announced
its intention to open a physical store in New York City, in part to
enable faster deliveries. A rash of start-ups is also snapping at their
heels – Instacart for groceries, Ice Cream Life for ice cream, and Postmates, Deliv, UberRUSH and WunWun, which will deliver anything you want.
It's easy to guess why consumers like me
would want some extra socks or a case of ginger ale delivered within a
few hours (yes, I ordered both). But the advantage to the companies is
less clear. During the first dot.com boom, several same-day delivery
start-ups, like Webvan and Kozmo.com, failed spectacularly. Why will it
be different this time around?
"I'm a little sceptical about them working
without the customer paying a high price," says Sunil Chopra, at
Northwestern University in Evanston, Illinois. If you can't forecast
when orders will be coming in or where your drivers might need to go to
next, it's extremely hard to optimise routes and make money.
Chopra suggests a company like Amazon might set up
a city facility of personal lockers where people could collect the
items they have ordered. A more futuristic option is to let cutting-edge
technology do the bulk of the work. Amazon is already lobbying the
Federal Aviation Administration to let it use drones to make deliveries,
while Google could one day employ the driverless cars it is developing.
For
now, another way to tackle the difficulty of delivery is the "gig
economy". People order groceries via a smartphone app and then
individuals make quick cash by collecting and delivering them. However,
these methods have garnered criticism for leaving workers stuck with low pay and little outside support or opportunity for advancement.
However, this is probably the best way to
mitigate the high cost of delivery, says John Deighton at Harvard
Business School. "There is now a device in our pockets that lets firms
mobilise idle people and idle cars," he says. "If there are taxi drivers
waiting between jobs and cars whose fixed costs are absorbed elsewhere,
then why not run an errand?"
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