Google launches Universal Commerce Protocol, bets on AI-powered retail

As retailers increasingly turn to artificial intelligence tools to lure shoppers and run key parts of their business, Google wants to make sure it’s in the center of the action.

At the kickoff of the National Retail Federation’s annual show on Sunday, Google announced the launch of what it’s calling the Universal Commerce Protocol. The company wants UCP to become an industry standard that retailers use for their AI agents and systems across tasks like discovery, buying and “post-purchase-support.”

Google says the open-source protocol creates a unified system spanning the shopping experience, from searching to payment, so that retailers don’t have to build their own tools and connect the various functions.

“It’s very important to have a standardized way so we can scale these things and everyone can be prepared for all the various steps to happen,” Vidhya Srinivasan, vice president of Google ads and commerce, said in an interview. “Businesses can pick and choose what they want so there’s flexibility for them.”

E-commerce has emerged as one of the major battlegrounds in the booming generative AI market, with Google facing off against OpenAI, Perplexity and Amazon, as they all try and get consumers to use their various apps and services to begin their shopping journey.

In September, OpenAI announced Instant Checkout, which allows users to buy some products through ChatGPT, taking a fee from transactions it helps orchestrate. OpenAI’s Agentic Commerce Protocol developed in partnership with Stripe, is open source and could compete with UCP.

Perplexity in May said it’s partnering with PayPal to let users buy products, book travel and secure concert tickets directly in its chat without leaving the platform, and in November said it will roll out a free agentic shopping product for U.S. users ahead of the holiday season.

And earlier last year, Amazon launched “Shop Direct,” a feature that lets consumers browse items from other brands’ sites on Amazon. Some of those items include a button labeled “Buy for Me,” an AI agent that can purchase products from other websites on a shopper’s behalf.

By 2030, the retail market could represent a $3 trillion to $5 trillion opportunity globally due to AI-powered tools and agentic commerce, according to a report in October from McKinsey.

Google said UCP was co-developed with companies including Shopify, Etsy, Wayfair and Target. The protocol will soon power a new checkout feature allowing users to buy direct from Google’s AI Mode or Gemini App. They can pay via Google Wallet, but Srinivasan said the company plans to include other payment methods like PayPal in the future. 

Srinivasan said UCP will be compatible with other existing protocols.

As part of Sunday’s announcements, Google also introduced a feature called Business Agent, allowing shoppers to chat with brands.

“This is to address the newer consumer behavior which is shifted toward more conversational commerce,” Srinivasan said. “We want retailers to be able to connect to users on our surfaces but using their own voice.”

Then there’s Google’s core market: advertising.

Google said it’s testing “Direct Offers,” which will let retailers promote unique discounts, such as 20% off of a product, if a user of the AI Mode chatbot expresses intent to buy something.

“Our role in the ecosystem is that of a matchmaker and one way is with ads,” Srinivasan said. “It’s a really big focus for us to innovate in the space that adds value to both retailers and buyers.”

WATCH: Alphabet tops Apple by market cap