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Amazon and Google Expand On-Demand Shipping for Holiday Shopping

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Google and Amazon are expanding the number of regions in which they offer express shipping, as the fight for e-commerce spending heats up going into the all-important holiday shopping season.

Amazon announced on Thursday that it had expanded its Prime Now program to San Diego and Nashville. Amazon’s Prime Now offers Amazon Prime subscribers the option to have certain goods from local stores shipped to their homes within an hour. Amazon says that there are tens of thousands of products it calls “daily essentials” available through Prime Now. Two-hour delivery is free, but one-hour delivery costs $7.99.

Prime Now is available in 24 markets. In some metropolitan regions it delivers food for restaurants and will even rush alcohol to your door within an hour.

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Shortly before Amazon’s announcement, Google said that its Google Express product will offer next-day shipping across much of Southern California, including Los Angeles, San Diego, and Orange County. Google Express is similar to Amazon Prime. A subscription costs $95 per year, slightly less than the $99 Amazon charges for a year-long membership. Google’s program facilitates delivery of a range of goods from retailers including Target, Walgreens, and Costco.

Google Express service is available in New York, San Francisco, Chicago, Boston, and Washington D.C., in addition to Southern California.

Online sales this holiday season are expected to increase 3.5%-4% over last year, making e-commerce a hot growth area. Total e-commerce sales could hit as much as $105 billion this year, according to an estimate from the National Retail Federation. Amazon (AMZN) is the undisputed leader in the e-commerce sector in the U.S., and Google (GOOG) is playing catch-up. Earlier this year, Amazon passed Wal-Mart (WMT) as the world’s biggest overall retailer by market value.

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