Microsoft Aiming at Amazon in Checkout-Free Retail Push

Microsoft Corp. is developing technology to eliminate the need for cashiers as well as checkout lines at stores, in a direct challenge to the automated grocery store of Inc. said people familiar with this situation.

The software giant based in Redmond, Washington is developing a system that tracks what shoppers put into their carts, said the sources. Microsoft has shown retailers sample technology and has had discussions with Walmart Inc. about the possible of a collaborations, said the same sources.

Microsoft’s goal for the technology is to help the retailers maintain pace with the highly automated store Amazon Go that opened in January. Customers at that store can scan their smartphones at one of the turnstiles when entering.

Cameras and sensors then identify what is removed from the store shelves. When the customer finishes his or her shopping they just leave and Amazon sends a bill to the credit card they have on file.

Amazon Go will be opening soon in San Francisco and Chicago and has sent its rivals frantically trying to prepare for another disruption from the largest online retailer in the world.

Some of the retailers have tested different programs where the customer scans and then bags each item purchased and results have been mixed.

In Microsoft’s case, becoming an ally to different retailers has meant a great deal of business. Besides developing retail tech, Microsoft ranks as No. 2 behind just Amazon in cloud service sales. Cloud services are important in the operation of e-commerce websites.

It is unclear how quickly Microsoft will bring the service of automated checkouts to market or whether the technology is the answer that retailers need.

However, some consider this technology to be the next big innovation for shopping and one that Amazon’s competitors will be unable to afford to just ignore.

This will be the future of how shoppers check out at grocery and convenience stores, said a research analyst in the industry. One venture capital company has estimated that the U.S. market involving automated checkout is worth as much as $50 billion. One of the jobs most common in the U.S. is cashier.

Microsoft said that it does not make comments on speculation or rumors.

Microsoft’s efforts thus far have come via its Business AI team which deals in AI (artificial intelligence), and consists of between 10 and 15 people working on several technologies for retail stores, with some of their efforts being proposed directly to Satya Nadella the CEO.