Online shoppers get delivery, payment perks, as tech competition heats up
The battle for online shoppers intensified as several leading tech giants announced moves to lure consumers into their virtual malls.
Amazon said members of its Prime program in select cities will now have access to free same-day delivery on certain items, a move that broadens the subscription service at a time when new players are poised to provide fresh competition online.
Google introduced "Android Pay," which will allow users to pay for items by waving their smartphones in front of a special scanner at cash registers. And at its developer's conference in San Francisco, the search giant announced it would add a "buy button" to Web pages that would make it easier for shoppers to purchase products featured in ads that appear alongside search results.
Meanwhile, Apple confirmed this week that it would partner with Postmates to offer same-day delivery of online orders. Apple already offers Apple Pay on its iPhones, which analysts have said is the first mobile payment system to gain traction with consumers.
The bevy of offerings illustrate the growing competition over online shopping - and the ability for big tech companies to act quickly to define the experience for consumers. Internet shopping is fast replacing trips to the local plaza or mall. Over the Christmas holidays season, online sales grew 13.8 percent compared to a growth of 8.5 percent the year before.
Among online stores, Amazon still has a dominant hold, driven by its Prime subscription program. The company said same-day delivery would be available in 14 metro areas, including San Francisco, New York, Los Angeles, Boston and Baltimore. Prime shoppers who place orders before noon will be able to get free same-day delivery on orders over $35 of items such as pet food, computer chargers and books.
Some 20 million items are available for two-day shipping, compared to the 1 to 4 million that will be available for same-day delivery. An even smaller assortment of items, "tens of thousands," the company says, are available for one-hour delivery in certain markets.
That may help the company fend off two new e-commerce membership offerings.
"We're constantly working to build alternatives to let customers choose what fits their needs and wants," said Greg Greeley, the vice president of Amazon Prime Global.
Wal-Mart has said it will begin testing this summer a $50 membership program that would offer free three-day shipping on 1 million of its top-selling items. Another site, Jet, is set to debut later this year with a slightly different model: For $49 a year, the company promises it will offer shoppers the lowest prices on the Internet.
Google, meanwhile, is trying to move into both mobile payments and online shopping at the same time. Executives said Android Pay will be accepted at a variety of stores, including McDonald's, Best Buy, Whole Foods and Walgreens. Apps that support the system include the restaurant reservation app OpenTable, Groupon, Priceline.com, Lyft and Uber.
The payment app won't store actual credit or debit card numbers, opting instead for a virtual account number - a process similar to the one Apple uses to disguise shoppers' card numbers during transactions.
The Android Pay app will be available on Google's Play app store "soon," the company said, though it did not give a firm date. Google said in a blog post that users will also be able to activate Android Pay directly from some bank apps.