Inside Google's UCP playbook — why OpenAI CAN'T catch up

Google just quietly won the agentic commerce war — and most ecommerce retailers haven't even noticed. In this episode of Growing Ecommerce, Mike Ryan and Chris break down the three UCP (Universal Commerce Protocol) updates Google just shipped, why OpenAI's ACP is already falling behind, and the structural advantages that make Google's lead almost impossible to catch.

If you run Performance Max campaigns, sell on Google Shopping, or want to understand where ecommerce is headed in the AI era — this is the episode that connects the dots.
Inside this episode:

• The 3 new UCP capabilities that just went live: cart building, catalog capability, and identity linking — and why "boring" updates matter more than hype
• Why OpenAI's ACP dropped to single-item checkout while Google moved ahead
• The Walmart Sparky chatbot inside ChatGPT — the workaround that proves OpenAI's pipeline is broken
• How Google Pay and Google Wallet quietly lock retailers into a walled garden
• Google's flywheel: how the shopping graph + audience graph + structured knowledge graph data create a moat LLMs can't replicate
• Why this time is different from Buy on Google's 2018 failure — and what changed in Google's leverage over retailers
• Why pipeline-based agents (UCP) will win over browser-based agents — and how this is really the logical endpoint of headless commerce
• The only thing that could realistically stop Google: regulators

Topics covered: UCP, Universal Commerce Protocol, agentic commerce, Performance Max, PMax, Google Shopping, AI mode, ChatGPT shopping, OpenAI ACP, agentic checkout, Google Pay, Google Wallet, headless commerce, Merchant Center, knowledge graph, shopping graph, Walmart Sparky, AI overviews, conversational attributes.

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Transcript

SPEAKER_00 0:09

Welcome to another episode of Growing E-Commerce. I'm one of your hosts, Mike, and with me as always, Chris. Chris. Chris, we're on a bit of a tight time schedule today due to my bad planning.

SPEAKER_02 0:29

But it will be a rather quick one today.

SPEAKER_00 0:32

Yeah.

SPEAKER_02 0:32

Well, we've got some But the topic is hot.

SPEAKER_00 0:34

Exactly. We're talking about UCP again, Google's uh uh Universal Commerce Protocol. So uh a coup we want to approach this from two angles. So a couple of updates to UCP, um, and also thinking through about what's in it for Google and yeah, why they do this. Exactly. You know, we talked last episode about how we we don't want to be the guys who just shit on open AI all the time. We'd actually like them to exceed to succeed. And I think you see why when we talk about the effects of Google being successful here. Yes.

SPEAKER_02 1:07

Uh I co-sign that. And um I I I just can tell you again uh that UCP and all the implications which might be real or which might be only some noise. I still can tell you that it's a a massively big topic for for all the online retailers I talked to. I it it seems like there's so much so much questions out there. And it's not about the questions which can't be answered yet, but it's also about the questions no one knows to ask, right? So I love that episode, even if if it will be a quick one because UCP is really something that people want to know more about. Yeah, for sure. So Mike, man. Let's get into it. Share your wisdom with my wisdom.

Three UCP Updates Go Live

SPEAKER_00 1:55

Yeah, wisdom, I don't know about that, but facts. I'll share what I have, yeah. I mean, actually, I wanted to so I think there's been a perception that nothing has happened with UCP since it was announced. That's what we're wrong. And yeah, I mean, this is uh somehow true, somehow not, but um updates were announced over a month ago at this point by the time we're airing this episode. And I just want to highlight those a little bit. Um so there were three big updates that were announced, and and then something, uh a fourth thing as well. Um, I just feel like these were partly, these were things that were always hinted at as being on the road. Regarding the roadman. Yeah, so they don't feel that they're not like groundbreaking new, but the things are going live. This is real, it's being built, it's progressing. And it's a typical thing of like, you know, we live in this announcement-rich environment, lots of press releases, tweets from founders. A lot of noise. Yeah, there's a lot of noise because sometimes it feels like things are changing constantly, and then sometimes it feels like things aren't changing at all, and it's somewhere in the middle. But um, so updates to UCP. Google announced three core updates. Um, first off, it's pretty basic, but there it is. It's cart building. Yes. Yes, cart building. No surprise, yeah.

SPEAKER_02 3:09

But it's important.

SPEAKER_00 3:10

Exactly. Well, it's one of the, you know, if if we if you remember um when we talked about the way UCP is built, it has these capabilities, which are like the core building blocks of it. And then it has things called extensions, which are, you know, what they sound like. They're little add-ons. Um and and carts, checkout, these are these are core building blocks. So in cart building, you can now save multiple items from a single store. Yeah. Yes.

SPEAKER_02 3:39

Um it it sounds basic, yeah, but it is. I mean, referencing back to open eye, the last time I checked, I think there was they hadn't made progress here and they dropped out.

SPEAKER_00 3:49

Still bound bound to one product. Yeah, it was a single um single item checkout. And you know, every that will all make progress, but you can just kind of shop like normal, basically. Which is which is yeah, because you know, we talked about a couple a couple episodes back about you know these bad conversion rates in these environments and stuff. They have to at the whole promise is that this will be better than e-commerce. But we're not there yet. We you you just you can shop like normal. Yeah, we're trying to get on par with e-commerce first. That's the first step. Um, the next one, again, sort of table stakes.

SPEAKER_02 4:26

Sell it. Sell it to us.

SPEAKER_00 4:27

Sell it. Yeah, sell it like I'm Sam Altman. Send me this pen. No, what I like about Google, by the way, is they are very compared to others, they are very no-hype about this stuff. They're very matter-of fact. Um, but catalog capability. So again, this is a capability, a core function, and it is the ability um to reference your product catalog for details. In other words, you feed, basically. And this is stuff we've talked about on here as well. How important feeds are going to be, um, how important these new things like conversational attributes. Enchantic layers, yes. Yeah. This conversational layers. This is where it all comes to play. Like the the UCP, um, the architecture, the infrastructure that's being built, it needs to be able to talk to the feed in order for that to be valuable.

SPEAKER_02 5:13

And the feed has to be as sharp as possible. Um I think this for me, this is more more telling about yes, the the feed will be in the center. Also for your UCP uh more or less related actions. Um but again, yeah, a basic feature, checkbox, tickets.

Cart Building Finally Looks Normal

SPEAKER_00 5:34

Great. Exactly. And this, you know, the if you jump in the documentation that this gets into stuff like about product variants, um inventory, pricing and price ranges. Yeah. So these are um in many cases, this would be stuff that on a on a conventional e-commerce website would be handled with product filters, for example. Um, or you'd have a layer in there to show variants. Um so that you know, that could all be built into the landing page. The variants could be shared in there or whatever. So um yeah. And then the next thing is um identity linking. Yes. And this is another That's interesting. Yeah, this is an existing, it's not a new capability, it's an existing capability, but it's coming live. And it's very interesting, especially here in Europe. Yes.

SPEAKER_02 6:24

Safe to say. But give us some some perspective on it. What what's what's what's the advantage of this feature for for me as an online retailer?

SPEAKER_00 6:32

Yeah, well, I mean, the use case here, um, well, we can debate if it's an advantage to you or not. But the It's certainly an advantage for Google. The use case here would be that um, you know, this person is logged into Google when they're in AI mode. Um, and then they can end up having an experience similar to if they would be logged into your website. Because uh otherwise, you know, imagine they're logged into your website, they have loyalty points or member prices. I get the person the less price, basically. Exactly. Any anything like this, normally that's stuff there, that would be broken. But with the identity linking, the bridge exists. And so they can now have an equivalent experience as if they'd be on your website. Which I think is an advantage for me at the end of the day. Yeah, it it totally depends how you how you view it. Because if you're a brand and this is another distribution channel for you, like Amazon, um, and you know, we talked recently about Alberts, and you don't you're not believing in the Bible of direct to consumer or whatever, um, then certainly an advantage. Um but if you're a retailer, there could have been an incentive for them to visit your website still. From that perspective, you're right. But uh it's very well, we just don't know, yeah.

SPEAKER_02 7:42

Uh but we can agree on probably the the hypothesis that it's an advantage for the for the online shopper because it's a consistent purchasing experience.

SPEAKER_00 7:50

For the user experience. No, it's it's good that this is happening. Yes, yeah.

SPEAKER_02 7:53

So a great feature. Yeah.

Catalog Feeds Become The Backbone

SPEAKER_00 7:54

At the end of the year, exactly. Um yeah.

SPEAKER_02 7:57

Let's We found an agreement, mate. Let's see. Let's move forward.

SPEAKER_00 8:01

Or we can disagree and commit to Amazon stop. Yes. No, but from Mr. Bezos. But um, yeah, so these things, they're all none of it is quite new. It's stuff we expected, but it shows that stuff is happening. Um and by the way, I mean, maybe I'll just call out like if we compare this to like um right now uh on OpenAI or ChatGPT, um, Walmart put their Sparky chatbot live in there. We talked about this a few episodes ago. It's a little embarrassing in a way. You have to have a chatbot inside of a chatbot. But that is due to these kind of problems because you know the advantage for Walmart of having Sparky first-party data. Exactly. Sparky knows Walmart's inventory data, Sparky knows um a person's loyalty or member pricing, whatever. That's exactly the reasons why they do that.

SPEAKER_02 8:52

Uh and again, this this this is, I think um I mean you you you I think you're uh clearly in the in the UCP camp and on and and not ACP camps. Yes, yes. These things will matter. These these details, right? Yeah. If if I have my loyalty points and I have my my my shopping assistant uh does the thing for me, um of course I want this consistency in my my purchasing journey. And um yeah, I think again, uh a sign that Google is doubling down on that and probably they are out executing all the others.

SPEAKER_00 9:25

Yes, yeah.

SPEAKER_02 9:26

Basic features, but it's progress, important progress.

Identity Linking And Loyalty Pricing

SPEAKER_00 9:29

Exactly. This is this is um, you know, we we said uh recently the ad networks can't be built overnight, and neither can a whole new way of shopping that's going to take on. Yeah. So um I I mean w yeah, one thing here um before we just move on to the next topic. Um, you know, six months ago or something, I told you I was very bearish on ingenic commerce. And um and I I still am, but I could because I I think that this is not there are different kinds of um of ways of approaching this. And I I would actually say that this is basically an evolution of headless headless commerce, which has been a trend for years. Um I feel like it's the kind of the logical endpoint of that. Because you know, Google is still not going out and like browsing your website and clicking on stuff like that. Um they this is basically a whole pipeline that has been built. And it it is it is agentic in the sense that it has agency, it has your permission or authorization to do these things, but then it just moves through a series of pipelines, more or less, this new infrastructure that's being built. And um, and I still contend that this is uh this is actually to me good. This is the way I would have wanted. I I I I was like, this it will never be a scaled model that, you know, these things are actually browsing websites for you or stuff like that. They've tried models like this, and it takes minutes to return to like to make a purchase. This stuff hasn't worked, and I don't think it will work. So I I think this is the right direction that things are headed in. Um and on this model, if we that it's what we're gonna call agentic, and I do think there's a there's a future here.

SPEAKER_02 11:19

The the question of scope, yeah, we we we relate to to agenti, but uh with that statement, I've I would fully agree.

SPEAKER_00 11:26

Yeah. And I I I still I still think the idea of like, you know, AI operating browsers for you and operating this stuff, everything that we've said in the past are huge secure security problems. Um there's all kinds of an adoption risk.

SPEAKER_02 11:41

I at the end of the day, we don't know yet if the the consumer wants it like that. Yeah. I mean, let's face it, this is the big question, the biggest one. Um and and that's why I love this this incremental approach. Yeah. If we call it if we might might call it like this. Yeah, step by step. Step by step, and let's see how the market reacts. So I I like the strategy.

SPEAKER_00 12:02

Yeah. And you know, Google has been this is in some ways something they've wanted for over a decade because they had buy on Google since what? When was that, 2018, 19?

SPEAKER_02 12:14

Certainly before 20. I think France, right, was was the biggest market to tested it?

Why UCP Beats Browser Agents

SPEAKER_00 12:18

Yeah, in Europe here and then in the US. Before then, yeah. But in Europe, I think it was France. Yeah, exactly. Completely failed. I mean, let's face it. Um Yeah, and you know, they they had been working on different building blocks and things in this direction going back to probably like 2013 or something. But um this has been a big reset for them. And um, I think, you know, something that I have to remember back on back in the days of buy on Google, Bill Reddy was in charge of commerce and payments at Google. And Bill Reddy was formerly the CEO of uh Venmo and Brain Free. Then he was at PayPal for years, and I always thought that linking of commerce and payments in his role was very interesting. And I, you know, it the timing wasn't right then. But it was assigned what to come. Yes. But they they've arrived at that place now. Yes.

Retailer Adoption And Google Leverage

SPEAKER_02 13:09

And what I think, Mike, just just to add my my my take on this, uh, because we're always talking about the the the adoption risk uh on on the consumer side. So do I'm as Christian Tramwilla, do I want uh a shopping assistant to to make this purchasing journey end-to-end? Yes. That's one risk, but there's of course the risk are the online so the the retailers, online retailers, the band the the the D2C players adopting them. And I think what I would say as of today, the timing is way better for Google now. Yes. And I think the risk of the adoption risk on the on the retail side is is is significantly lower compared to 2018-19, yeah, when they failed with the buy on Google. Exactly. Like I I think that they And they do it smart m better now, right? In a in a smarter way.

SPEAKER_00 13:57

Yeah, they have they have they have leverage now that they didn't have back then. Because retailers didn't want that. Even on a zero commission model, they didn't want that. Probably they don't want it today, but but that they have more leverage now, yeah.

SPEAKER_02 14:09

Yeah. I'm talking about Google, yeah.

SPEAKER_00 14:10

Yeah, this it's because they're dictating, you know, they dictate how much like how they're going to present AI mode relative to Google search, how often they're gonna, you know, uh take um a search that starts on Google, answer it with an AI overview, which then you click to expand, and suddenly you're actually inside AI mode, and then all of a sudden there's a gentic checkout. They can they can play all kinds of games here. All kinds of games. Yeah.

SPEAKER_02 14:36

And I tell you what, on a very on a very human level, that the smartest C C level players out there, they are all driven by one big bias, which is FOMO.

SPEAKER_01 14:51

Yeah.

SPEAKER_02 14:52

And and and and and the fear of missing out and new incremental demand happening on AI, on in this enchantic commerce sphere. That's what what's what's on Google's side now. And uh that's why I think the adoption will be there on the on the retail side. Yeah. The question is, is Mike Ryan adopting and uh how how deeply you're adopting this enchanted commerce features?

Payments Lock In With Google Pay

SPEAKER_00 15:15

Yes, we'll find out. Yeah. I mean, I think everyone is afraid of losing traffic or and ultimately losing revenue. Like market share. If they're gonna if they're gonna lose the traffic to their website, then they need to offset this. Yes. They understand that they have to do this. And so, yeah, I mean, it is a it is a lot of leverage that Google has. And um, we talked previously on an episode about like the war of the standards. Um, and so I just want to return to that a little bit and think about what are like the spoils of war here. What does Google stand to gain um if we look at UCP versus ACP and all this stuff? Um, and you know, uh we were we're just talking about that a bit, but to spell this out um uh a little more, I'll actually start speaking of Bill Mar um Bill Reddy and that title that he had, Commerce and Payments. Um there is an eco an ecosystem lock-in that occurs here. Um and one way that that happens, like on the consumer side, because this whole Agentic checkout, right now, it's powered by Google Pay. Um they'll they'll they'll take on more payment partners, I'm sure, but it's primarily powered by Google Pay in AI mode um and Google Wallet, anything that you have saved in your Google wallet. So it's very much oriented around, you know, Apple Pay is not in there.

SPEAKER_02 16:36

No, for sure. By the way, I think they took took a page out of of Apple's lock-in strategy book. Yeah. Because it it's just it it's just a lock-in if the payment of a huge chunk of your revenue at some point of time is within the in the Google tech stack, it's a great move.

Shopping Graph And Audience Graph Flywheel

SPEAKER_00 16:55

And I don't even I don't know for sure, but I don't think that there's some kind of a transaction fee play here, which I think I think that is a revenue stream for Apple Pay, but I I think they just want to lock the lock the the retailer in. Yeah, keep it all locked in because you know it's just if you're if everything's in Google services and Google's owned and operated, it's just this giant walled garden, as we and the bigger the leverage is, the easier it is to implement a transaction fee at some point of time.

SPEAKER_02 17:24

I mean Google knows how to make money, so maybe maybe it will will happen. But from that perspective, it's a that's why I think the the war of standards is a is a huge one. Yeah. I don't know how many people realize uh how big this war actually will be. Um and Google is set up the right way.

SPEAKER_00 17:44

Yes, for sure. And um they also have two other big oils of war here. Um, and it's both of their their main graphs, their audience graph and their so-called shopping graph, which is a product graph. Um these are um, you know, it's just a classic now. Is there a word besides synergy? Because I hate that word so much. Let's go for synergy. Yeah, I mean it's it's a uh uh self-reinforcing. It's a one plus one equals three situation. Yeah, exactly. It's a f you maybe it's a flywheel, I don't know, but it's a self-reinforcing loop here. Um because it, you know, their audience graph and their product graph are both big assets and big beneficiaries as well. And just to spell this out, because um, I mean, we've we've also hinted toward this in the past, but like uh these are both types of knowledge graphs. And a knowledge graph is similar to but also very different from like what a large language model is. Um, because a knowledge graph is basically explicitly mapped data. So there are all these nodes and lines like relationships. You can picture this big cluster, um, uh like just a classic network diagram of nodes and links between them. Um and this could be, for example, like uh products get linked with all different kinds of things. Um, like and they also put in their review data and every kind of data that they can get from the merchant center all feeds into here. Um so this is like structured, explicit, verified, traceable, all those things that a large language model is not because there everything is implicit somehow, right? Yes, it's these mappings. And it's like I, you know, they call it like it's vectorized or whatever. So it it's it is similar in a way. There is this um, you know, there are all these connections, but it's all in the model weights and things like that. So it's very implicit. Um, it has its own advantages, and you know, this kind of creativity type thing can pop out of there, um, but also hallucinations and stuff like that. So these two things are much stronger together. And that's why Google pushes hard on like enriching feed attributes with conversational attributes. They want more of that structured, verified data in.

SPEAKER_02 20:10

Grounded data, right?

SPEAKER_00 20:11

It's grounded, yeah. And that grounds then the capabilities of the model. So these two things together can be extremely powerful.

SPEAKER_02 20:18

And a question here, Mike, is is this a unique position Google is in here or so can can the the advantages Google have with with the with the crafts, is this something I don't know, OpenAI could could create on their own, or is this a very unique advantage with regards to it it is it can be replicated, but it is it's much more in the direction when you talk about motes.

SPEAKER_00 20:45

To me, this is much more in the direction of a technological moat because Google's shopping graph is massive and they've been building. And that has has been growing right over there. And you have to think of how many merchant centers they have and all this stuff. Um even I mean the the master stroke was.

SPEAKER_02 21:00

Yeah, makes make sense.

SPEAKER_00 21:03

Yeah, makes sense. Yeah, but I'll I'll have to leave it at that. But um, you know, and now they Amazon also has a massive product graph, so they're not fully unique in this. But um and you know, the the product graph also benefits from the this AI environment because in the past Google only knew about like the ad click and then the order value. Um but now they can have awareness of the items that were purchased, the price. Because of the cart filling? Exactly. They know what the cart was. And so this helps massively, yes, massively to get this data into their product graph. Yes. Then the other area here, of course, is the audience graph. Um, because again, um, this supports the personalization that they can offer and have a superior experience to others. Um, but also that graph benefits then from this intent. You know, people people like their their audience graph is largely based on like search history and things like that. But the data is much richer inside of an AI conversation. So they can get a lot more.

SPEAKER_02 22:01

And I know you hate the word synergy, but that's the probably the broader typical definition of a synergy. Yes. It's kind of of a flywheel. And the the person the capability to really personalize the result for me as an end consumer. You brought up the example of Walmart, you know, having the chatbot in within the chatbot. I think this will be a hell of a driver for adoption on that consumer side.

SPEAKER_01 22:27

Sure, sure.

SPEAKER_02 22:27

So we can talk all day long about Google, but they are we are bullish on them, right?

Regulators And Final Takeaways

SPEAKER_00 22:35

The only thing that will stop them would be regulators. Regulators, yes. Because from a market dynamic, this is incredibly powerful what they're building. And OpenAI doesn't have an answer. Amazon might.

SPEAKER_02 22:48

But man, you know where the Europeans are good at regulating regulating the shit out of an actually very, very good and positive thing. So we'll we'll show Google WoW. Just kidding. Just kidding. Let's see.

SPEAKER_00 23:03

No one likes to laugh about EU regulation more than me.

SPEAKER_02 23:05

But on that note, why that, by the way. Yeah, we we talked about that in another one. I think we're tied on time.

SPEAKER_00 23:11

Thanks everyone for joining us. We sadly have to wrap it up. Um, but this has been another episode of Growing E-Commerce. Brought to you as always by Smarter Ecommerce. If you want to learn more, you can visit Smarter ecommerce.com. And as always, we really appreciate it. If you give us a shout out on social media, click like on our YouTube videos. Anything you can do to support us, it means a lot. Thank you. See you next time. Enjoy the week.