Alphabet (GOOGL) Stock: Google Rolls Out AI Shopping Agents for Retailers

TLDR

• Google launched Gemini Enterprise for Customer Experience, a new set of AI agent tools designed to help retailers deploy shopping assistants and customer support systems.
• Major retailers including Lowe’s, Kroger, and Papa Johns are already testing Google’s AI shopping agents to help customers find products, compare items, and place orders.
• Google introduced the Universal Commerce Protocol (UCP), an open-source standard developed with Shopify, Etsy, Wayfair, and Target to create a unified AI shopping system.
• The new tools allow retailers to build their own AI agents rather than relying on third-party chatbots like ChatGPT or Copilot, giving them more control over customer interactions.
• Google is testing Direct Offers, an advertising feature that lets retailers promote discounts when AI Mode chatbot users show intent to purchase products.

Google unveiled new AI tools for retailers at the National Retail Federation’s annual show on Sunday. The announcement marks the tech giant’s entry into purpose-built AI agents for retail shopping.

The new suite of tools, called Gemini Enterprise for Customer Experience, helps retailers deploy AI agents for shopping assistance and customer support. These agents can help customers find products, answer questions, and complete purchases.

Alphabet Inc., GOOGL

Lowe’s, Kroger, and Papa Johns are already testing the technology. Kroger launched a shopping agent through its mobile app that helps customers compare grocery items and personalize their shopping experience.

The agent understands context like time constraints and meal plans. It combines this with customer data Kroger already has, including price preferences and brand choices.

Retailers Build Their Own AI Shopping Channels

Google also introduced the Universal Commerce Protocol (UCP), an open-source standard for AI shopping agents. The company developed UCP with Shopify, Etsy, Wayfair, and Target.

UCP creates a unified system from product discovery through payment. Retailers can use it to build their own AI agents without starting from scratch.

The protocol will soon power a checkout feature in Google’s AI Mode and Gemini App. Users can pay through Google Wallet, with plans to add PayPal and other payment methods later.

Building their own AI agents gives retailers more control than relying on third-party chatbots. When retailers make products available in ChatGPT or Copilot, they risk losing customer loyalty and add-on sales.

Lauren Wiener from Boston Consulting Group noted a shift in the market. “There’s a market shift across the spectrum of retailers who are investing in their own capabilities rather than just relying on third-parties,” she said.

Competition Heats Up in AI Commerce

Google faces competition from OpenAI, which released Instant Checkout for ChatGPT last fall. Microsoft launched a similar feature for Copilot in January.

Walmart partnered with OpenAI to let shoppers buy products through ChatGPT. Perplexity partnered with PayPal to enable direct purchases in its chat interface.

McKinsey estimates the retail AI market could reach $3 trillion to $5 trillion globally by 2030.

Lowe’s is using Google’s shopping agent as the backend for its virtual assistant called Mylow. When shoppers use Mylow online, it more than doubles the company’s conversion rate.

Seemantini Godbole, Lowe’s chief digital officer, said the technology moves so quickly that systems can become outdated in two weeks. The company works with multiple vendors including OpenAI to support its AI agents.

Papa Johns is testing Google’s food ordering agent. The agent can detect how many pizzas a group needs based on a photo.

Google is also testing Direct Offers, an advertising feature for the AI Mode chatbot. Retailers can promote discounts when users show buying intent.

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