Google Inc. has expanding its next-day delivery service to several Midwest markets, including Indianapolis, company officials announced Tuesday.
The expansion of Google Express could mean 25 million more potential customers in six Midwest states, including Indiana.
Google Express previously was available to shoppers in seven U.S. cities or areas: San Francisco, Silicon Valley, New York City, Los Angeles, Chicago, Boston and Washington, D.C.
Google Express users can shop online from a number of national retailers and get delivery the next day. Stores include Costco, Toys R Us, Fry’s Electronics, Kohl’s, Walgreens, Staples, Barnes & Noble, PetSmart and Ulta.
Unlimited delivery membership is $95 a year or $10 per month. A la carte delivery for $4.99 per store for orders of more than $15. Google Express also is offering a three-month free trial for new members.
In addition to next-day service, which starts Tuesday, Google will start testing a delivery service for fresh food and groceries in two U.S. cities later this year, stepping up competition with online retailer Amazon.com Inc. and startup Instacart Inc.
Instacart began offering service in Indianapolis late last month.
The Google trial will begin in San Francisco and another undisclosed city, said Brian Elliott, general manager of Google Express. Whole Foods Market Inc. and Costco Wholesale Corp. will be among Google’s partners for the new service, he said.
"For a lot of our merchants that have been successful with this, we’re not representing the whole store today," Elliott said. "It’s in our incentive, as well as the merchant’s incentive, for us to help customers get the full store delivered to them."
Google is investing in delivery services for homes and businesses as it seeks to lure more traffic to its websites. The move puts the company in more direct competition with Amazon, which has rolled out its AmazonFresh service in several U.S. cities.
In April, a report showed the e-commerce giant was the lowest-cost among rivals in New York.
Online groceries are a $10.9 billion industry in the U.S., and the market is expected to grow 9.6 percent annually through 2019, according to a December report by IbisWorld.
Amazon on Tuesday said it would also enter the restaurant delivery business.
The fresh-food trial, including fruits and vegetables, is part of a move away from making deliveries from warehouses, which can add complexity and requires refrigeration, Elliott said. Giving customers more options should help to boost profit and sales, he said.
"If I’ve got to pay someone to drive the product from point A to point B, the bigger the basket size, the more revenue I’ve got to offset that cost," he said.