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Google is escalating its push into AI-powered commerce with the launch of a new open protocol designed to standardize how shopping agents operate across the entire retail journey. The initiative underscores Google’s ambition to anchor itself at the center of a rapidly evolving market where artificial intelligence increasingly shapes how consumers discover, buy, and manage products.

The company unveiled the Universal Commerce Protocol, or UCP, at the opening of the National Retail Federation’s annual conference, positioning it as a common framework retailers can use to connect AI agents across discovery, checkout, payments, and post-purchase support. As more retailers deploy AI tools to automate customer service and streamline transactions, Google is betting that a shared technical foundation will accelerate adoption and reduce fragmentation across the industry.

A Standardized Backbone for Agent-Led Commerce

At its core, UCP is designed to remove complexity for retailers that would otherwise need to build and maintain multiple AI systems for different stages of commerce. Google says the open-source protocol creates a unified layer that allows AI agents to move seamlessly from product search to payment confirmation, without requiring retailers to stitch together disconnected tools.

Vidhya Srinivasan, Google’s vice president of ads and commerce, said the goal is scalability and flexibility. Retailers can adopt only the components they need while still ensuring compatibility across platforms. According to Google, this approach makes it easier for businesses of all sizes to participate in agent-led commerce without significant upfront technical investment.

Intensifying Competition in AI-Driven Retail

E-commerce has become one of the most competitive arenas in generative AI, with technology companies racing to become the starting point for shopping journeys. Google is facing growing pressure from rivals that are embedding commerce directly into conversational interfaces.

OpenAI introduced Instant Checkout last year, enabling users to purchase products directly within ChatGPT while collecting transaction fees. Its Agentic Commerce Protocol, developed with Stripe, is also open source and could emerge as a direct competitor to Google’s UCP.

Perplexity has moved aggressively as well, partnering with PayPal to let users buy products, book travel, and purchase event tickets inside its chat interface. The company has also announced plans to roll out a free agentic shopping tool for U.S. users, timed around peak retail seasons.

Amazon, long dominant in online shopping, has taken a different but equally strategic approach. Its “Shop Direct” feature allows consumers to browse products from external brand websites within Amazon, while a “Buy for Me” AI agent can complete purchases on a shopper’s behalf, even when the transaction occurs off Amazon’s own storefront.

A Multi-Trillion-Dollar Opportunity

The stakes are significant. Consulting firm McKinsey estimates that AI-powered tools and agentic commerce could unlock between $3 trillion and $5 trillion in global retail value by 2030. That projection helps explain why major platforms are racing to define standards and capture early mindshare among retailers and consumers alike.

Google says UCP was co-developed with a group of major retail and e-commerce players, including Shopify, Etsy, Wayfair, and Target. The protocol is expected to underpin a forthcoming checkout feature that allows users to complete purchases directly from Google’s AI Mode and the Gemini app.

Initially, transactions will run through Google Wallet, though the company plans to support additional payment options such as PayPal over time. Srinivasan added that UCP is designed to remain compatible with other existing commerce protocols, signaling an effort to position it as complementary rather than exclusionary.

Conversational Commerce and Brand Engagement

Alongside UCP, Google introduced a new tool called Business Agent, which enables shoppers to chat directly with brands through Google’s AI surfaces. The feature reflects a broader shift toward conversational commerce, where customers expect real-time, personalized interactions rather than static product pages.

Google says Business Agent allows retailers to communicate in their own brand voice while meeting customers where they increasingly spend time, inside AI-driven interfaces. The company views this as a way to strengthen relationships between brands and consumers while keeping Google’s platforms central to those interactions.

Advertising Remains a Core Pillar

Commerce innovation also feeds directly into Google’s advertising business, which remains one of its largest revenue drivers. The company announced it is testing a new format called Direct Offers, enabling retailers to surface targeted discounts when an AI chatbot detects strong purchase intent.

For example, a shopper researching a specific product could be presented with a limited-time offer, such as 20 percent off, directly within the AI conversation. Google describes its role as a matchmaker, using AI to connect buyers and sellers at the most relevant moment.

As AI reshapes how shopping decisions are made, Google’s strategy is clear. By setting technical standards, embedding payments, enabling brand conversations, and integrating advertising, the company is positioning itself not just as a search engine, but as a foundational layer for the next generation of digital commerce.