Sunday, December 2, 2012

Google moving into the delivery space with BufferBox acquisition

Google is creeping more and more into the logistics space and now appears to be targeting Amazon for a lead within the ecommerce space. This past week, the IT Company acquired BufferBox for $17m.

BufferBox, a Canadian-based company, developed an automated, self-serve kiosk for parcels which allows for 24/7 pick-up deliveries. The kiosk supplies the user with a unique BufferBox address to have their parcel delivered to. Upon the arrival of a parcel, the user is emailed a unique, one-time-use PIN code for the kiosk to retrieve their purchase on their schedule. The company offering the service for free this year to help build up a user base. Eventually it plans to charge $3 or $4 per package delivered to its boxes.

The parcel drop box phenomenon appears to be growing in the North American market as Amazon, USPS and Canadian start-up Kinek have all introduced their own versions. Reduced shipping costs, reduced mis-deliveries and the security these kiosks offer are among the appeal to both shippers and customers.

When asked why Google acquired BufferBox, the company stated "We want to remove as much friction as possible from the shopping experience, while helping consumers save time and money, and we think the BufferBox team has a lot of great ideas around how to do that."

Indeed, the company has made some interesting investments that have many wondering what Google’s logistics plans may be. For example, in 2011, the company received a patent for shipment notifications and in 2012 another patent was granted for shipment tracking and monitor. In another interesting move, the company introduced its Blue Dot service in 2010. If an item is out of stock at one location, this mobile app service allows the user to locate alternative locations. Best Buy, Sears, Williams-Sonoma and Pottery Barn are part of this service by providing local inventory details to Google.

Its acquisition of Motorola’s patents may also play a major role in its move into logistics. Google’s patents as well as it Blue Dot service are designed for mobile commerce. Mobile commerce is growing quickly. While still in its infant stage, Forrester estimated mobile commerce grew 80% in 2011 and is likely to double that in 2012.

The use of mobile devices is also growing within the logistics industry – tablets, smartphones – are all being utilized to track goods, manage inventory and more. Perhaps Google is looking towards this opportunity as it continues to build out solutions for visibility and collaboration?

For more information on Google, Amazon and e-commerce logistics, check out Ti’s latest report: North America e-Commerce Logistics. This is the first in a series of e-Commerce reports with Asia and Europe market reports scheduled for publication in early 2013.