Market Overview

Google Express: Is It For Data Or Retail?


While the Street is focusing on the brick and mortar and e-retailers during holiday sales, there is a tech giant that is slowly and quietly testing waters in retail - Google Inc (NASDAQ: GOOGL). Through its Google Express, Google is allowing local stores to get their products delivered to online customers. However, the company is not in the game just to make profits from the transactions, but as it turns out, for the data that it can gather on consumer spending.

Brian Nowak, Internet equity research Analyst at Susquehanna, was recently on CNBC to discuss pricing and its functionality of Google Express and what Google is aiming for with this service.

“Google Express is all about data,” Nowak said. “Getting data about consumer shopping behavior. They are now in 10 cities, they have partnered with around 30 different retailers and essentially it’s a same-day e-commerce offering, where you order items through Google shopping express, they send couriers to Target, to Whole Foods, to Costco and deliver to you the same day.”

“Our price [study] actually shows that the prices on Google shopping express are higher than what you would get if you walked into Target and bought the items or walked into Costco by about 15 percent. So, Google is doing some sort of subsidizing, but they also are making a little bit of money on those pricing differences.”

When asked about the ‘secret sauce’ behind what Google is doing, Nowak said, “The secret sauce is data, Google wants data about consumer shopping behavior.”

Posted-In: Brian Nowak CNBC Google Express SusquehannaAnalyst Color Media


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