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Google, UPS unit begin free delivery service for Google merchants

Google Inc. (NASDAQ:GOOG/GOOGL) has launched a service with Ware2Go Inc., an on-demand fulfillment platform owned by UPS Inc., (NYSE:UPS) where Google’s merchant customers can offer free deliveries of orders initiated by a Google search but consummated on the merchant’s site.

The service, called Google Free and Fast, touts free deliveries within a one- to three-day window, the companies said Thursday. Under the service, a visitor on the search engine giant’s platform clicks on a product associated with a merchant’s Google ad and which is tagged with the “Free and Fast” pledge in the form of an annotation. The link takes the visitor to the merchant’s website to complete the transaction. Once an order is placed, the Ware2Go warehouse technology initiates the fulfillment process based on real-time inventory availability. 

Merchants select the stock-keeping units (SKUs) and the destination ZIP codes that can be served within the three-day delivery window. Merchants are responsible for bringing the inventory to the appropriate distribution center, or in some cases, multiple centers. UPS will typically deliver the product from the distribution center to the end user, which could be a business or a consumer. Merchants will be the face to the end customer if a problem arises. 

Atlanta-based Ware2Go partners with warehousing firms that operate the 40 U.S. facilities housing its customers’ products. Ware2Go’s value proposition is the technology it embeds in the warehouses. It also consults with customers on physical network design, and will suggest transportation-related solutions that are often more cost-effective than what the merchant could procure, said CEO Steve Denton.

The service is aimed at small to midsize merchants with a minimum of $5 million in annual revenue. To be eligible, merchants must be a paying customer of Google’s ad service and commit to the company’s shipping pledge, Denton said.

Google approached Ware2 with the concept in an effort to add value to Google’s paying merchant relationships, and to close the loop in the tech giant’s supply chain, Denton said. A key component of the product’s appeal is that merchants can leverage their delivery speeds to build market share, especially with new customers, he said. According to one study, 55% of consumer respondents said they’ve done business with a new company since the coronavirus pandemic.

Ware2Go cited data from Google Shopping which showed that merchants displaying the “Free and Fast” annotation reported a 7% increase in “site conversions,” where the user is taken from the Google site to the merchant’s site, and then completes an order for the product that was initially found in the search. That figure is two to three times higher than the typical site conversion rate, according to Denton.

Google controls just under 40% of all digital ad spend market share, according to 2019 data from research firm eMarketer.