Microsoft is Working with Retailers to Eliminate Checkout … And Amazon

Posted on June 14, 2018 by Paul Thurrott in Cloud, Microsoft with 41 Comments

Microsoft is Working with Retailers to Eliminate Checkout ... And Amazon

A report in Reuters claims that Microsoft is working on technology to eliminate cashiers and checkout lines—and Amazon.com—from the retail shopping experience. The report cites six sources, a curiously specific number.

“Microsoft is developing systems that track what shoppers add to their carts,” the Reuters report notes. “Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart about a potential collaboration.”

Reuters says that this move is a “nascent challenge to Amazon.com,” though it’s designed for physical retail stores and most of Amazon’s business is done online. Amazon does own Whole Foods and operates a handful of its own retail stores. But Microsoft’s system seems to threaten Amazon Go, which is a single automated store location in Seattle. Amazon plans to open more Go stores soon, however.

Microsoft’s system, of course, will likely see broader use. And given the animosity that retailers have for Amazon, it’s unlikely that the automated shopping system it uses will be adopted by any competing retailers. It’s possible that Microsoft is showing off this system now to prevent desperate retailers from considering a potential Amazon offering.

“Making its technology cheap enough so it does not eviscerate grocers’ already thin profit margins is a major challenge for Microsoft,” one source told Reuters.

 

Join the discussion!

BECOME A THURROTT MEMBER:

Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Register
Comments (41)

41 responses to “Microsoft is Working with Retailers to Eliminate Checkout … And Amazon”

  1. djncanada

    Hi,


    I do not work in retail or Amazon.


    What are companies like Amazon, Microsoft and Walmart doing to retrain people affected by these changes.


    I appreciate as much as anyone automation of tasks, who will be the consumers if people are not retrained?


    Maybe the Walton's or Jeff Bezos will ante up a few billion each for retraining!!

    • jimchamplin

      In reply to djncanada:

      This is always the issue, and it’s the #1 reason there’s such inequity in these times. Jobs keep getting eliminated, but the people who lose those jobs just lose them. They’re then left to fend for themselves while the shareholders pat each other on the back because they improved their stock prices by .05%.

    • GarethB

      In reply to djncanada:

      It's an interesting topic. You might want to check out Episode 326 of TWiT.tv's Triangulation podcast. (https://www.twit.tv/shows/triangulation/episodes/326). They speak to Nigel Cameron who wrote 'Will Robots take my job'.

      It sure makes you think that there is going to be (more) serious disruption unless our society reconsiders how our economies work.

    • karlinhigh

      In reply to djncanada: who will be the consumers if people are not retrained?


      Maybe it's time to re-think the idea that an economy must be so focused on consumption.

      • Mark from CO

        In reply to karlinhigh:

        Or perhaps re-think the idea that the idea of the economy and technology is all about getting rid of overhead, which translates into getting rid of people. Perhaps the economy is really to provide us humans useful work and to help make our lives more complete. Agree with Jim Champlin above - technology may well be the divider in today's society, not the unifier that everyone wants you to believe.

    • lvthunder

      In reply to djncanada:

      Nothing. That's what they are doing. Soon what we think of as entry level jobs will be gone. The $15 an hour minimum wage effort is only going to shorten the timetable.

  2. karlinhigh

    Tracking what shoppers add to their carts? This reminds me of a Popular Mechanics story from 2009.


    https://www.popularmechanics.com/military/a2398/4236865/


    I cruised the aisles of the neighborhood grocery store, a Pathmark, tossing items into my cart like a normal shopper would—Frosted Mini-Wheats, Pledge Wipes, a bag of carrots. Then I put them on the belt at checkout. My secret was on the lower level of the cart: a 12-pack of beer, concealed and undetectable. Or so I thought. Midway through checkout the cashier addressed me, no malice in her voice, but no doubt either. "Do you want to ring up that beer?"


    My heist had been condoned by Pedro Ramos, Pathmark's vice president of loss prevention, though he didn't know precisely when or where I was going to attempt it. The beer was identified by an object-recognition scanner at ankle level—a LaneHawk, manufactured by Evolution Robotics—which prompted the cashier's question. Overhead, a camera recorded the incident and an alert was triggered in Ramos's office miles away on Staten Island. He immediately pulled up digital video and later relayed what he saw. "You concealed a 12-pack of Coronas on the bottom of the cart by strategically placing newspaper circulars so as to obstruct the view of the cashier."


    Busted.


    Pathmark uses StoreVision, a powerful video analytic and data-mining system. There are as many as 120 cameras in some stores, and employees with high-level security clearances can log on via the Web and see what any one of them is recording in real time. An executive on vacation in Brussels could spy on the frozen-food aisle in Brooklyn.

  3. AnOldAmigaUser

    It is all about the cloud. This article from CNBC points out that Amazon's purchase of Whole Foods has pushed many retailers into Google's sphere.

    It helps Google with product search, offers a different revenue stream (cut of sales vs. ad payment), and some of the retailers are adopting Google's cloud offerings as well. Consumers can order through Google Home Assistant or Google Now.

    Without a viable home assistant, Microsoft cannot offer this sort of partnership, so, they are choosing to stake out the bricks and mortar approach tied to their cloud services. It makes sense, though I doubt it will be successful, since Google and Amazon will have defined this in consumers' minds before Microsoft can make a dent in the stores. The Microsoft approach will also require investment from the retailers, whereas what they are doing with Google just becomes part of their expenses.

  4. robincapper

    I'd hoped a Microsoft specialist site would have more info than just Reuters quotes

  5. TroyTruax

    The self serve checkouts are fine but stores still have to get past the "organic" problem. Since the customer is telling the machine what type of vegetables to ring up they can take less expensive options. Ringing up expensive vegetables as carrots works as long as nobody is paying attention (or the system doesn't announce what you just purchased), however, even then will the system catch the fact that you are ringing up organic tomatoes using the regular code? Before you think most people won't be that dishonest the excuse that's used is, "since the store is making me do the work I should get organic tomatoes at the regular price."

  6. glenn8878

    Seems only natural to be the first. Then retreat under pressure.

  7. nbplopes

    Waiting to see when people leave package of toilet paper coupled with a $1000 of bills payed automagically because of a bug in the MS system or it was just tagged erroneously. The bill was sent electronically where an LCD item was marked as bought. Than the customer comes back to complain and .... how to prove it was not the case? CCTV cameras?


    Humn. Maybe the shopping cart will have an LCD screen displaying the price of stuff put? That would facilitate immediate cross checking.


    .....

  8. Garrett

    Tommy get out of the cart! I'm not going to pay for you again.

  9. Chris Payne

    I can see it now.. in a few years MS will have revolutionized retail check-out and have put thousands or millions of cashiers out of a job. The next GOP candidate will campaign on "bringing those retail jobs back" and MAGA pt 2.


    Or it's all a pipe dream.

  10. Waethorn

    Considering all of the past failures that Microsoft got rid of (Commerce Server, Dynamics Retail POS, Office Small Business Accounting, etc.) I don't see this being any different.

  11. Tony Barrett

    Yeah, good luck with that one MS. Like, you're really in tune with retail and the consumer aren't you? Is that why Microsoft's own stores are often empty of customers and badly laid out? Amazon are retail whore's who know exactly how to 'work the customer'. MS don't have a clue, but have obviously decided they want a slice of that pie too. Maybe Amazon will give them a crumb!

    • Robert Wade

      In reply to ghostrider:

      Ah, but you see this ISN'T a consumer issue. It's a business issue. This whole system is something Microsoft is marketing to retail BUSINESSES. Now, having said that, I think it's hard to say if this takes off. It depends on, as the article says, how inexpensively retail shops can acquire and use it. It also depends on what ultimately is going to happen with physical retail businesses altogether. Brick and mortar places shutter all the time. This system might help them, or it may simply be too late. It's hard to say right now.

  12. ncn

    At least in the grocery business, you can't easily eliminate the cashier...some products are sold by weight or quantity and that has to be talleyed. (Yes, you could pre-package, but that would increase costs on that end). I've noticed the greatest amount of time is spent in the payment phase, not checkout. I usually hit the 20- or 14-items or less lines or sometimes self-checkout. It might take 30-seconds to checkout and bag but another couple of minutes to pay. Presumably the payment side is being attacked for classical retailers and this tech would do wonders for grocery. (If you could somehow segregate the cashier-required items from everything else in the cart, the savings would be even bigger.)

    • Jeffery Commaroto

      In reply to ncn:

      You no longer need cashiers to weigh/tally items. All the major grocers in my area Wegmans, Wal-Mart, Tops let you check out at automated lanes for everything in store.


      At Wegmans you weigh/tally your own items and print out a sticker with a bar code for produce. They also have a scanner that can look at items and identify them for you and do everything. However IMHO it doesn't work incredibly well just yet.


      They sell a great deal of prepared foods at Wegmans so the store just gives you containers that have tar numbers on them. At checkout you enter the number on a touch screen, it weighs the item and you are done. For bakery etc you just tape on screen what you are buying (they have pictures along with the names), the number you have and you are done. You can basically walk in and walk out without ever having to talk to anyone.


      On the payment side, one of the things Wegmans and Wal-Mart have done is remove the need to sign for any credit card purchases helping to further cut down on time.


      For both Wal-Mart and Wegmans there is usually a person who oversees the automated lanes but one person can monitor 4+. At most of the Wal-Marts have one person overseeing what is probably about 15 lanes.


      I could easily see the entire process going even further. Wegmans has a great app where you can make your shopping list and it tells you exactly what things cost, where to find them etc. Would be easy to just extend this out to finish paying and have it scan as you move along. It also has location awareness so the app can easily switch you to the store you are in. All your coupons are in the app, loyalty cards etc.


      The hard part is in training customers but traffic to the automated lanes has significantly increased over the last 10 years or so from when I first started seeing them really pop up to now. I would imagine any new developments like the ones talked about here would follow a similar pattern where consumers would need to be trained.

    • cyloncat

      In reply to ncn:

      Apple Pay with Apple watch reduces payment time to essentially nothing. It's fun to watch a checkout clerk experience this for the first time - they're ready to start processing payment, and it's already done.

  13. Mike Brady

    It's not about the stores. It's all about the cloud.

  14. JustMe

    I dont know that 'threaten' is the right word to use. I think 'leverage' would better suit. You said it yourself - the chance that major retailers fall in step with Amazon is relatively small. Microsoft undoubtedly knows this. What I see this as is Amazon 'proving a concept', and Microsoft potentially 'running with it.' Even if Microsoft is wildly successful at this, they arent threatening Amazon's core, Surely even Amazon realizes retailers will be loathe to 'do things Amazons way' if an alternative exists.

  15. welein

    This is pretty awesome. Now all Wegmans employees can make use of MyWegMansConnect portal to get all the benefits.

Leave a Reply