Reports: Microsoft Looks to Partner with Walmart in an Effort to Block Amazon

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Thu. June 14th, 2018 - by Robert Schaulis

SAN FRANCISCO, CA - As the grocery battle continues, news emerges everyday about retailers trying to combat Amazon’s increasing influence on the grocery market. This time, software giant Microsoft Corp is throwing its hat in the ring. According to a report from Reuters, the software giant is working on technology that would eliminate cashiers and checkout lines from stores. Six people familiar with the matter told Reuters this seemed like a potential challenge to Amazon’s automated grocery store, Amazon Go, which opened to the public in Seattle in January.

Amazon Go, which will open soon two new stores in Chicago and San Francisco, has many retailers wondering how they can keep up with the world’s biggest online retailer. Shoppers at Amazon Go experience a style of shopping they'd be hard pressed to find elsewhere: Consumers scan their smartphones at a turnstile to enter the store; cameras and sensors identify what they put into their shopping bags, and when they’re finished shopping, they simply leave the store, and Amazon bills their credit card on file.

Microsoft’s latest technology aims, ostensibly, to help retailers compete against Go. The company is developing systems that track what shoppers add to their carts, Reuters' sources shared, explaining that Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart about a potential collaboration.

Walmart storefront

For Microsoft, becoming a strategic ally to retailers means big business. In addition to developing retail technologies, it ranks No. 2 behind Amazon in selling cloud services that are key to running e-commerce sites. Microsoft is also working on Business AI, or an artificial intelligence team, one person said, a group consisting of 10 to 15 people that has worked on a host of retail store technologies. The team has reportedly presented some of their efforts in front of Microsoft’s CEO Satya Nadella.

It is not clear how soon Microsoft would 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, according to Reuters, Amazon’s competitors cannot afford to ignore.

Gene Munster, Technology Analyst & Co-Founder, Loup Ventures“This is the future of checking out for convenience and grocery stores,” said Gene Munster, Head of Research at Loup Ventures in Minneapolis. The venture capital firm estimates the U.S. market for automated checkout is worth $50 billion.

One of the problems Microsoft faces is making its technology cheap enough so it does not gut grocers’ thin profit margins, one of the six people talking to Reuters explained.

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, sources said.

Microsoft told Reuters that the company “does not comment on rumors or speculation,” and both Walmart and Amazon declined to comment.

Will Microsoft's retail store technology soon enter the fray? What will this mean for Amazon's supposed long-term reign over the grocery kingdom? AndNowUKnow will continue to report the latest.

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