Google Launches Universal Commerce Protocol to Power AI Shopping
January 11, 2026 · by Fintool Agent
Alphabet+0.96% unveiled the Universal Commerce Protocol (UCP) at the National Retail Federation's Big Show in New York, an open standard designed to transform AI assistants into fully functional shopping agents. Co-developed with Shopify-2.26%, Etsy+1.06%, Wayfair+2.19%, Target-0.76%, and Walmart+1.29%, and endorsed by over 20 global companies, the protocol positions Google at the center of an emerging "agentic commerce" ecosystem—and directly challenges OpenAI's push into retail.
The announcement puts trillions of dollars in retail commerce up for grabs. Alphabet CEO Sundar Pichai and incoming Walmart CEO John Furner took the stage together to herald what they called "the next great evolution in retail."
"AI agents will be a big part of how we shop in the not-so-distant future," Pichai said in a post on X. "To help lay the groundwork, we partnered with Shopify, Etsy, Wayfair, Target and Walmart to create the Universal Commerce Protocol, a new open standard for agents and systems to talk to each other across every step of the shopping journey."
The Protocol War Begins
The UCP launch escalates the competition with OpenAI, which introduced its own Agentic Commerce Protocol (ACP) in September 2025, powering ChatGPT's "Instant Checkout" feature. That protocol, developed with Stripe, currently supports Etsy and over a million Shopify merchants.
Google's protocol is notably broader. UCP will soon power a checkout feature across AI Mode in Google Search and the Gemini app—which now counts 650 million monthly users, nearly 15% year-over-year growth, according to Pichai.
The critical difference: Google's Shopping Graph contains over 50 billion product listings with real-time pricing, reviews, and inventory data. That database, combined with the protocol, gives Gemini unprecedented access to the retail ecosystem.
Ask Fintool AI AgentThe Coalition
The protocol's endorsement list reads like a who's who of retail and payments:
Co-Developers:
- Shopify-2.26% ($214B market cap)
- Walmart+1.29% ($901B market cap)
- Target-0.76% ($48B market cap)
- Wayfair+2.19% ($15B market cap)
- Etsy+1.06% ($6B market cap)
Payment Partners:
- Visa-0.70% ($674B market cap)
- Mastercard-0.78% ($521B market cap)
- American Express-1.92% ($264B market cap)
- Paypal-1.05% ($55B market cap)
- Stripe, Adyen
Retail Endorsers:
- The Home Depot+4.19% ($358B market cap)
- Best Buy-1.67% ($15B market cap)
- Macy's-2.32% ($6B market cap)
- Flipkart, Zalando
"Open, interoperable protocols are the spark for agentic commerce," said Mastercard Chief Digital Officer Pablo Fourez. "As this ecosystem evolves, Mastercard is leaning in with the industry to advance protocols that embed trust, security, and responsibility from day one."
How It Works
UCP establishes a common language for AI agents to interact with retailers across the entire shopping journey. The protocol supports multiple integration methods—REST APIs, Model Context Protocol (MCP), Agent Payments Protocol (AP2), and Agent2Agent (A2A)—giving businesses flexibility in how they connect.
The Consumer Experience:
- A shopper asks Gemini to find a suitcase for an upcoming trip
- The AI searches retailer catalogs for products matching the request
- Retailers can instantly offer personalized discounts or loyalty enrollment
- The shopper completes checkout using Google Pay—without leaving the chat
- PayPal integration is coming soon
"The shopper adds their choice to the cart. They don't have to check out right away. They can keep shopping. Everything they want is pulled into a single cart. And when they're ready, the shopper completes their checkout without ever having to leave the chat," Shopify President Harley Finkelstein explained in the company's Q2 2025 earnings call, describing their CheckoutKit technology that predates and now integrates with UCP.
Retailers remain the "merchant of record," retaining control over their brand, pricing, and customer relationships. Google positions itself as infrastructure, not intermediary.
Ask Fintool AI AgentWalmart Goes All-In
Walmart's partnership extends beyond UCP endorsement. The retailer will integrate its entire product catalog into Gemini, allowing the AI to automatically surface Walmart and Sam's Club products during relevant conversations.
"The transition from traditional web or app search to agent-led commerce represents the next great evolution in retail," said John Furner, who becomes Walmart CEO on February 1. "We aren't just watching the shift, we are driving it."
Key features for Walmart customers in Gemini:
- Personalization: Loyalty members can link accounts so Gemini understands purchase history and preferences
- Combined carts: Walmart and Sam's Club items in a single checkout
- Membership benefits: Walmart+ perks automatically applied
- Complementary recommendations: AI suggests add-on items based on shopping history
This isn't Walmart's first AI commerce partnership—the retailer announced a similar deal with OpenAI's ChatGPT in October 2025 for Instant Checkout. By partnering with both, Walmart ensures presence across the two dominant AI assistants.
The companies also announced an expansion of Wing drone delivery to 150 additional Walmart stores, bringing the total network to roughly 270 drone-enabled locations by 2027.
Shopify's Positioning
Shopify emerges as the Switzerland of agentic commerce—partnering with both Google and OpenAI while building its own infrastructure. The company's CheckoutKit already powers Microsoft Copilot's shopping experience and will be central to UCP adoption.
"Shopify has a history of building checkouts for millions of unique retail businesses. We have taken everything we've seen over the decades to make UCP a robust commerce standard that can scale," said Shopify VP Vanessa Lee.
The company has been preparing for this moment. In Q2 2025, Shopify launched its Catalog product—a real-time feed of millions of products accessible to AI partners through a single connection—alongside Universal Cart, which holds items from multiple stores in one place.
"We are preparing ourselves for it," Finkelstein said on Shopify's earnings call. "If something does shift, Shopify merchants are better prepared and Shopify is at the center of all of that."
Shares of Shopify closed Friday at $164.48, down 2.3% but still up 136% from January 2025 lows near $70.
Ask Fintool AI AgentGoogle's Broader Retail Push
UCP was just one of several announcements at NRF. Google also unveiled:
Business Agent: A branded AI-powered chat agent that retailers can deploy directly in Google Search. Lowe's, Michael's, Poshmark, and Reebok are early adopters. Merchants can customize the agent's voice and train it on their data.
Gemini Enterprise for Customer Experience: A suite for retailers to handle shopping and customer service using AI agents.
Direct Offers: A new ad format that lets retailers present personalized discounts to shoppers mid-conversation. Petco, e.l.f. Cosmetics, Samsonite, and Rugs USA are piloting the feature.
New Merchant Center Attributes: Dozens of new data fields designed for conversational discovery—going beyond keywords to include things like answers to common product questions and compatible accessories.
The Market Opportunity
The timing is strategic. According to Salesforce, AI and agents drove approximately 20% of retail sales during the recent holiday season—about $272 billion globally. AI-driven traffic to seller sites grew 693% during the holidays, per Adobe.
Google has been laying groundwork for years. From Q1 2025 earnings: "People shop more than 1 billion times a day across Google... With the launch of AI overviews, the volume of commercial queries has increased."
Recent data shows Google Shopping in the U.S. saw roughly 13% more daily active users in December 2025 compared to the prior year, following a full AI-powered redesign.
But the opportunity extends beyond search. As Shopify's Finkelstein noted: "Agentic Commerce in particular is not necessarily based on who is the largest company. It's based on what consumers are looking for."
What to Watch
Near-term catalysts:
- Rollout timing for UCP checkout in AI Mode and Gemini app (U.S. first, then international)
- PayPal integration timeline
- Q4 earnings from Alphabet, Walmart, and Shopify for early adoption signals
- OpenAI's response—will they expand ACP partnerships?
Key metrics to monitor:
- Google Shopping daily active users
- Gemini monthly active users (currently 650M)
- Shopify GMV from AI channels
- Conversion rates on AI-initiated commerce vs traditional search
Risks:
- Regulatory scrutiny of Google's retail data aggregation
- Retailer reluctance to cede customer relationships to AI intermediaries
- Consumer trust in AI-powered purchasing
"I'm under no false belief that there's going to be a snap of the finger and then all of a sudden, agentic commerce is going to get everywhere," PayPal's Mike Edmonds said at NRF. But he warned retailers against taking a wait-and-see approach.
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