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Store employees help customers with their purchases during the grand opening of a flagship Microsoft Corp retail store in New York
Image: Store employees help customers with their purchases during the grand opening of a flagship Microsoft Corp retail store in New York. REUTERS/Lucas Jackson

Microsoft to Rival Amazon Go with Tech That Removes Retail Cashiers

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Image: Store employees help customers with their purchases during the grand opening of a flagship Microsoft Corp retail store in New York. REUTERS/Lucas Jackson

Microsoft will rival Amazon’s automated grocery shop with its own retail technology that would eliminate cashiers and checkout lines from stores.

Six people familiar with the matter told Reuters that the software giant is developing similar technology to that used in Amazon Go stores, with the systems being able to track what shoppers add to their carts automatically. They went on to claim that Microsoft has shown sample technology to retailers across the world, and intriguingly has had talks with US retail juggernaut Walmart about a collaboration.

Microsoft versus Amazon again?

Amazon Go has one store in Seattle, with others set to open in Chicago and San Francisco. It enables customers to scan their smartphones at a turnstile when they enter, then a combination of cameras and sensors identify what they remove from the shelves. Instead of then having to queue up to pay, customers can just leave the store, as Amazon uses their credit card on file to pay off the bill.

Microsoft, which already competes with Amazon in the cloud computing services market, would need to play catch-up to Amazon in this space. It’s unclear whether Amazon would tout its own technology to retailers; the company has insisted it won’t roll out the Amazon Go technology in its newly-acquired Whole Foods stores.

While it’s unclear whether retailers are crying out for the technology, it’s no surprise that they would be keen to see what technology options they have going forward, particularly because of the disruption Amazon’s e-commerce operation has caused to the entire market.

Nadella-approved tech

A Reuters source said that a group consisting of 10 to 15 people had worked on a number of retail store technologies, with the best of the bunch being presented to CEO Satya Nadella. Nadella himself has recommended an ‘intelligent edge’ device that could manage Internet of Things (IoT) devices such as cameras on site with minimum data transfers to the cloud, reducing costs.

A shopper is seen using his phone in the line-free Amazon Go store in Seattle
Image: A shopper is seen using his phone in the line-free Amazon Go store in Seattle. REUTERS/Jeffrey Dastin

Costs are a huge factor – whether Microsoft or indeed any other technology company can provide this sophisticated technology at a price which does not erode retailers’ already razor thin profit margins will be interesting. This would have to take into account a reduction in retail workers, as well as how much value this kind of technology would actually bring in the long-term. Would, for example, the additional data collected, and the customer experience benefits make the investment worth it for a retailer? These are questions that retailers will need to answer swiftly.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.