Google Express is currently only available in Boston, Chicago, Manhattan, Washington D.C., West Los Angeles and the Bay Area (with overnight service to the rest of Northern California).

Though there are smaller shops participating in the Bay Area, the company is clearly concentrating on bigger retailers with more product inventory and the kinds of IT systems capable of easily integrating their product and inventory with Google’s Search results.

Expanding this program to a much broader base of smaller, local retail shops would entail a huge amount of work and expense. While relying on third-party merchants gets around having to replicate Amazon’s massive investments in warehouses, it also brings a number of other problems.

Troubles with Damning the Amazon

Shoppers want simple, safe ways of buying, and when you rely on third parties for fulfillment, that can complicates things.

Microsoft CarPoint circa 1996

I once started and ran an online car buying service for Microsoft, called CarPoint. At our peak, we served seven million customers a month. It was a great service, and customers loved it, but we faced two really difficult problems in running that service.

The first was standardizing the automotive specifications we got from manufacturers and third-party content providers like Kelley Blue Book. We did that so customers could easily compare a Honda Accord to a Toyota Corolla, and it was really messy work. That was just the automotive category too — Google has way more product categories to wrangle, and Amazon has a huge lead here.

When it comes to wrangling information though, there are few players that can match Google. The company is experimenting with combining its Knowledge Graph and artificial intelligence to create powerful new pattern recognition capabilities that I’m assuming could also be applied to the product mapping challenges of their shopping service. So, information processing is probably not a sustainable advantage for Amazon in this area.

The second hard part about running CarPoint was much more serious: we were totally dependent on local car dealers to complete the actual purchase. When they did a good job, our customers were happy. When they did a bad job, we caught hell for it, and we frequently had to intercede on customers’ behalves. Quite honestly, our success in intervening completely depended on how much leverage we had, which is to say, how much business we sent to that dealer.

I don’t want to downplay this problem because it’s a huge one, but then, I can’t think of any other company in the world right now with Google’s ability to drive traffic to very targeted niche markets — and that puts them in an excellent position to ensure good service from participating merchants. Google’s Trusted Stores program is part of that work.

Shipping Through the “UbeTube”?

What we’re talking about here is a clash of strategies, with one side betting on a transaction-processing platform and the other on an information-processing platform. Either way though, you do need to actually deliver product to customer.

Last December on Sixty Minutes, Jeff Bezos teased us with news that Amazon is planning a drone delivery service. Soon after, we learned that DHL and Google were developing similar programs. The Federal Aviation Administration’s new air traffic control plans don’t address drones though, and even with NASA exploring alternatives, it’s likely to be some time before Amazon or Google drones land on our front porches.

Given that, are there other disruptive options for fulfilling online retail orders? How about a software-coordinated, decentralized fleet that’s already in place? What if Uber’s fleet of crowd-sourced drivers were to fulfill Google Express orders?

As Anthony Pompliano notes, Google already has a $250 million stake in Uber through Google Ventures. It also integrated Uber into Google Maps this spring, and Uber could be a great seedbed for the company’s self-driving car initiative. Uber is already testing the delivery logistics abilities of its fleet of crowd-sourced drivers. Something like Google Express would be a natural extension. Pompliano concludes his piece by noting that Uber is a natural acquisition for Google. I agree, and would add that it could be an extremely valuable asset in Google’s looming battle with Amazon.

Big Dollar Signs for Local

After two decades of web retail, physical and virtual selling now have to come together much more gracefully than before. That’s because we no longer use the web exclusively from our desktops.

The explosive growth of smart phones has turbo-charged mobile search. In 2015, mobile should finally pass the desktop in total searches. Google is more than keeping pace. Its share of desktop searches in the US is 67%, while it’s 83% for mobile. The company is now looking at how to translate this mobile searching into an advantage for its shopping strategy by trying to understand how to drive business to local retail outlets.

Google’s strategy is intrinsically shaped by its focus on “organizing the world’s information and make it universally accessible and useful.” It makes sense that Google’s shopping bets are therefore more about processing the information behind the products and services than about processing the actual products and services themselves. So even if you’re connection is facilitated by Google, the retailer is the paying customer, and you will always know who it is that you’re buying from.

Contrast this with Amazon, and its mobile strategy. It’s Firefly phone is largely seen as a “showrooming” tool for helping customers find stuff in local stores and then more easily buy it on Amazon. It’s mobile scanner, Amazon Dash, is an even more obvious example of this strategy. Firefly and Dash are simply extensions of the Amazon platform — tools for sucking in sales from showrooms that aren’t already part of Amazon Services.

These tools simply highlight Amazon’s strategy, which is intrinsically shaped by its strengths as an e-commerce platform. Amazon merchant services allow other retailers to piggyback on this massive transaction-processing infrastructure. When you’re buying from these third-party merchants on Amazon, you barely notice their names. From the buyer’s perspective, it feels as though you’re just buying from Amazon.

A Battle for the Future of Retail

We are about to witness a battle between Amazon and Google that will dwarf anything Google faces from Apple, Facebook or Microsoft. Which of these two strategies will win in the long-run is anyone’s call, and the fact is, it’s likely the market is big enough for both strategies to coexist.

All of this will make for more convenient shopping, which I suppose is a both a blessing and a curse. From my perspective, I am glad to see Google adopting a strategy that actually depends on the survival of a local retailers for its success. I don’t mean to sound overly idealistic. The days of the folksy, corner drugstore are long gone. To survive and thrive in the high tech retail environment now unfolding, even mom and pop stores will have to tech-up — and that means a considerable chunk of what they make will now go to tech giants.

It’s not ideal, but it does seem a better choice than a world where everything runs through one giant store.