Competition Heats Up Among Online Retailers

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As the economy plods on at a sluggish pace, online retailers are seeking to prompt people to part with their money more readily by dangling incentives such as cheap same day delivery services. Most of the major online giants are in on the action, each seeking to outdo the others with their services, convenience, and shipping prices. Google has been offering low-cost same day delivery services in the San Francisco area of northern California for some time, but is now expanding similar services to southern California, particularly in the Los Angeles area. In San Francisco, 15 different retailers are participating in the same day delivery service promotion, including Office Depot, Target, Toys R Us, and Walgreen. Google Shopping Express allows customers to set up a single shopping cart for all the participating retailers, shop to find the best price, and pay a single shipping fee for all the merchandise ordered. The cost is $4.95 per retailer, but an available membership allows customers unlimited numbers of same day delivery services. 

EBay is one of Google’s competitors in San Francisco, offering same day delivery services from retailers such as Macy’s, Target, and Best Buy. Customers ordering more than $25 worth of merchandise can get same day delivery for $5. Wal-Mart is also competing in the northern California Bay area, including San Francisco and San José, by offering $10 same day deliveries on an unlimited number of items per order. They call their service Walmart to Go. 

Amazon actually beat Google to the punch in southern California by extending their same day delivery services from the Seattle area to Los Angeles last year. So far, all of the companies report a high satisfaction rate among their customers. 

However, analyst Al Sambar of the firm Kurt Salmon points to the debacle of undelivered Christmas packages this past December as a cause for concern. Large numbers of customers took advantage of last-minute promotions for delivery by Christmas, but were disappointed when retailers and shippers were unable to keep up with demand, and left as many as 15 percent of deliveries unfulfilled by Christmas day.

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