In order to deal with this challenge Google is planning to launch a service that lets consumers shop for goods on the Web and receive orders within a day for a low fee. Numerous retailers have expressed interest in signing on to the Google initiative. Google has pitched the project to retailers with whom it struck recent partnerships in other areas, a group that includes Macy's Inc., Gap Inc. and OfficeMax Inc.
Google can certainly offer the same services as Amazon does at cheaper prices because this is the subsidy side of business for Google, the real money would be from ads & search. This service would be a significant competitor to Amazon Prime in the coming days.