Microsoft is working on technology that will eliminate cashiers and checkout lines from stores, posing a potential challenge to Amazon’s automated grocery shop efforts, Reuters reports, citing people familiar with the matter.
The Redmond-based software giant is developing systems that track what shoppers add to their carts, sources were quoted as saying.
Microsoft has shown sample technology to retailers from around the world and has had discussions with Walmart about a potential collaboration, according to the report.
Microsoft’s technology aims to help retailers keep pace with Amazon Go, a highly automated store that opened to the public in Seattle in January.
At Amazon Go, customers scan their smartphones at a turnstile to enter. Cameras and sensors identify what they remove from the shelves. When customers are finished shopping, they simply leave the store and Amazon bills their credit cards on file.
Amazon Go, which will soon open in Chicago and San Francisco, has sent rivals scrambling to prepare for yet another disruption by the world’s biggest online retailer, Reuters noted.
It is not clear how soon Microsoft will bring an automated checkout service to market, if at all, or whether its technology would be the answer retailers are looking for.
But some see the technology as the next big innovation in shopping, one that Amazon’s competitors cannot afford to ignore.
Microsoft’s effort to date has largely fallen under its Business AI, or artificial intelligence, team, according to the Reuters report.
A group consisting of 10 to 15 people has worked on a host of retail store technologies, and they have presented some of their efforts in front of CEO Satya Nadella, a source was quoted as saying.
In a meeting with the team several months ago, Nadella is said to have recommended an “intelligent edge” device that can manage connected gadgets such as cameras on site with minimum data transfers to the cloud, which would cut down on costs.
Making its technology cheap enough so it does not eviscerate grocers’ already thin profit margins is a major challenge for Microsoft.
Microsoft already showcases the basics for automated checkout at its Retail Experience Center in Redmond.
It has half a dozen partners, including Redmond-based AVA Retail, that are building their own checkout-free or related services atop Microsoft’s cloud.
Meanwhile, Microsoft’s internal team, including a computer vision specialist hired from Amazon Go, has worked on attaching cameras to shopping carts to track customers’ items.
And it has studied novel ways for smartphones to play a role in the shopping experience, according to the report.
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