Happy Sunday. I’m here with the rare weekend newsletter as Google, Walmart, and Shopify are utilizing the start of this week’s National Retail Federation’s Retail Big Show to announce what they are billing as big news.
I’ve outlined the basics below, but will be back in your inbox by mid-week with more analysis and takeaways on this and more.
On to the good stuff…
The new AI checkout flow from Google, starring Shopify luggage brand Monos. Courtesy of Google.
The Center Aisle
Google, Walmart, and Shopify are rolling out a new way for shoppers to check out directly inside AI experiences, allowing purchases to happen within Google’s Gemini assistant and AI Mode in Search rather than on a retailer’s website.
This new buying experience has been more of a “when” than “if,” following similar embedded checkout efforts from other AI assistants like ChatGPT, Perplexity and, just last week, Microsoft Copilot.
This new checkout capability was set to be discussed this morning by incoming Walmart CEO John Furner and Alphabet CEO Sundar Pichai onstage at the NRF conference.
Like with the other AI checkout launches, Google’s new shopping experience is limited by support for single-item purchases only, with payments flowing through Google Pay using credentials stored in Google Wallet. Google says PayPal support is coming, with other payment options expected later. No word on exact timing.
As with the other checkout efforts from rival AI firms, the retailer or brand remains the merchant of record, not the AI platform itself. That means everything after the transaction is controlled by the retailer or brand.
Representatives for Walmart said that the mass retailer and its membership club Sam’s Club will offer a wide array of merchandise excluding fresh groceries and those sold by Walmart Marketplace third-party sellers.
The new Google online shopping experience is built on the Universal Commerce Protocol (UCP), an open standard co-developed by Google and Shopify that’s designed to eliminate the need for one-off integrations between retailers and AI shopping tools. UCP is meant to work alongside other commerce and payment protocols, the companies said.
Have you lost track of all the protocols being released? I sure have. More on this later.
Shopify also said it’s going to for the first time allow non-Shopify merchants to add their product catalogs to the “Shopify Catalog,” a product database the company runs that standardizes merchant listings so they can easily be fed into AI-driven search and checkout tools.
Google is also pairing embedded checkout with at least one monetization effort. A new Direct Offers pilot allows advertisers to surface personalized promotions directly inside AI conversations. The advertisers define the promotions they want to run, and Google says it uses AI to determine when those offers should appear. The initial focus is on discounts, with plans to expand to other offer types including free shipping.
Three big questions I have for now:
Is Google finally serious about turning its massive search traffic into a true shopping experience? I’ve been covering e-commerce for almost 13 years and the company has flip-flopped on this front many times.
How big of a barrier to success is the limitation of one-item checkout and how will brands and retailers prioritize the merchandise they make available to avoid creating a new unprofitable sales channel?
Will Shopify’s decision to help non-Shopify merchants surface their product catalogs in AI-powered checkouts actually lead more merchants to run their entire e-commerce operation on Shopify?
I’ve spoken with senior executives from Google and Shopify over the last week, including Shopify CEO Tobi Lütke, and will be publishing more from those conversations soon.
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