Recently, several people familiar with the matter told Reuters that software giant Microsoft is working on creating systems that track what shoppers include into their carts. The Redmond, Wash-based company has displayed sample technology to retailers across the world and has held talks with Walmart Inc. regarding the potential partnership.
Microsoft’s technology is geared towards assisting retailers in staying up to speed with Amazon Go, which is a highly automated store that opened its doors to the public back in January. Before entering the store, Amazon’s customers first scan their smartphones at the entrance. What’s more, sensors and cameras recognize what they get from the shelves. Consequently, after they are done shopping, they simply leave while Amazon bills them through their credit card details on file.
Amazon Go intends to open soon in both San Francisco and Chicago. As such, it has caused a lot of panic among rivals as they prepare for another disruption by the largest online retailer in the world. For software giant Microsoft, becoming a strategic partner to retailers means big business. Even so, the company ranks behind Amazon in cloud service sales.
Although it is still unclear how soon Microsoft may introduce an automated checkout service or whether the company’s technology could be the solution that retailers need, some people view the technology as the next massive innovation in shopping. Therefore, Amazon’s rivals ought to be concerned.
Gene Muster, head of research at Minneapolis-based Loup Ventures, said that this situation is the future of checking out for both grocery and convenience stores. Also, the VC firm approximates that the automated checkout market in the United States is worth $50 billion with cashier being the most commonly-held position in the country.
One of the individuals behind the information said that Microsoft’s efforts till now have considerably revolved around its Business AI team. A group made up of 10-15 individuals has dealt with numerous retail store technologies and have tabled some of these efforts to CEO Satya Nadella. The person also added that during a meeting with the team, Microsoft’s CEO suggested an intelligent edge gadget that has the power to manage connected devices like on-site cameras with limited data transfers to the cloud. This device would assist in minimizing costs.
Microsoft already displays the basics for automated checkout at its Redmond-based Retail Experience Center. The company prides itself on having half a dozen partners such as AVA Retail, a Redmond-based company that is creating its own checkout-free services over Microsoft’s cloud. In turn, Sales of such a partner’s services would generate cloud revenue for Microsoft coupled with an understanding of the market for the creation of new retail technologies.
For the time being, Microsoft’s internal team comprising of a computer vision expert recruited from Amazon Go, has focused on fixing cameras to shopping carts to keep track of customers’ items. The team has also studied new ways for smartphones to impact the shopping experience.
Amazon spent about four years creating Amazon Go secretly, before finally launching an employee-based pilot in 2016 on its Seattle campus. The company gathered data for approximately 14 months before opening its first store in Seattle.