Google is making a strategic play to solidify its position at the forefront of the burgeoning AI-driven retail landscape. With a rapidly expanding universe of AI tools aimed at enhancing customer engagement and streamlining business operations, Google has introduced its Universal Commerce Protocol (UCP). This open-source initiative, unveiled at the National Retail Federation’s annual show, is designed to establish an industry-wide standard for AI agents and systems across the entire shopping journey, from initial product discovery to post-purchase support.
The core ambition behind UCP is to create a unified, interoperable framework that simplifies the complex web of e-commerce functions. By offering a standardized protocol, Google aims to alleviate the burden on retailers who would otherwise need to develop bespoke solutions to connect disparate aspects of their online presence, such as search, checkout, and customer service.
“Establishing a standardized approach is crucial for scaling these advancements and ensuring readiness across all facets of the shopping experience,” explained Vidhya Srinivasan, vice president of Google Ads and Commerce, in an interview. “This provides businesses with the flexibility to adopt the components that best suit their needs.”
The race to dominate generative AI in e-commerce is intensifying, with Google contending against formidable rivals like OpenAI, Perplexity, and Amazon. Each is vying to capture consumer attention and steer shopping journeys through their respective platforms and services.
OpenAI has already made significant inroads with its Instant Checkout feature, integrated into ChatGPT, which enables direct product purchases and garners a commission on facilitated transactions. Their Agentic Commerce Protocol, developed in collaboration with Stripe, is also open-source and presents a potential challenge to Google’s UCP.
Perplexity, meanwhile, has partnered with PayPal to facilitate in-chat purchases for products, travel, and event tickets, eliminating the need for users to leave their platform. The company also plans to launch a free agentic shopping tool for U.S. users, timed to coincide with the holiday shopping season.
Amazon has also been active, introducing “Shop Direct,” a feature that allows consumers to browse and purchase items from external brands directly on Amazon. Some listings even feature a “Buy for Me” button, powered by an AI agent capable of completing purchases on behalf of the shopper.
The economic significance of AI in retail is substantial. A recent McKinsey report projects that AI-powered tools and agentic commerce could unlock a global market opportunity valued between $3 trillion and $5 trillion by 2030.
Google’s UCP initiative is not a solo endeavor; it has been co-developed with key industry players including Shopify, Etsy, Wayfair, and Target. This collaborative approach aims to foster broader adoption and ensure the protocol’s relevance across a diverse retail ecosystem. UCP is slated to power a new checkout functionality, enabling purchases directly through Google’s AI Mode or Gemini App, with initial support for Google Wallet and plans to integrate other payment providers like PayPal in the future. Srinivasan also noted that UCP is designed for compatibility with existing protocols.
In conjunction with UCP, Google is rolling out Business Agent, a tool designed to facilitate more natural, conversational interactions between shoppers and brands. This feature aims to cater to the evolving consumer preference for conversational commerce, allowing retailers to engage with customers on Google’s platforms while maintaining their distinct brand voice.
Beyond direct commerce, Google is also focusing on its core advertising business. The company is currently testing “Direct Offers,” a feature that will enable retailers to present exclusive discounts to users who express purchase intent within the AI Mode chatbot.
“Our role in this ecosystem is that of a facilitator, and advertising is a key avenue for that,” Srinivasan stated. “We are deeply invested in innovating in this space to deliver value to both retailers and consumers.”
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