Microsoft Aims to Automate Retail Experience to Compete with Amazon Go

Microsoft Corporation (NASDAQ: MSFT) is developing systems to eliminate the need for cashiers and checkout lines in stores in order to challenge Amazon’s automated grocery shop. They have shown sample technology to retailers globally including Walmart Inc, possibly looking for a collaboration.

Microsoft’s technology wants to keep pace with Amazon’s Amazon Go feature, which was opened to the public in January at Seattle. Amazon Go works with consumers by allowing them to scan their smartphones at a turnstile to enter, while cameras and sensors identify what they remove from the shelves at the warehouse. When customers are done shopping, they can leave the store and Amazon bills their credit cards on files. Amazon will be expanding the service soon in Chicago and San Francisco, while competitors are trying to keep up with the e-commerce titan with mixed results.

Microsoft is right behind Amazon at number 2 in selling cloud services for e-commerce sites and now they’re looking for strategic allies in retailers to compete. It’s unclear how long it will take Microsoft to release an automated checkout service for customers, but the innovation is necessary if they want to compete with Amazon. Venture capitalist Gene Munster, head of Loup Ventures, estimates the automated service to be worth $50 billion as cashiers are one of the most commonly held jobs in the United States.

Microsoft’s efforts have mostly been focused toward artificial intelligence in business as a group of 10-15 people worked on a host of retail store technologies and presented efforts toward CEO Satya Nadella. Nadella recommended after a meeting with the group for a device that could connect gadgets such as camera on site with minimal data transfers to the cloud to cut down on costs in order to make the technology cheap enough for the thin profit margins Microsoft has already had to deal with. Microsoft has showcased the basics of automated checkout at its Retail Experience Center at Redmond and has half a dozen partners building their own checkout-free services on top of Microsoft’s cloud. A computer vision specialist hired from Amazon Go is also working with Microsoft’s internal team to help attach cameras to shopping carts to track customers’ items while studying new ways for smartphones to aid consumers in the shopping experience. This still results in Microsoft playing catch-up with Amazon taking the lead.

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