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Microsoft throws down big challenge to Amazon with checkout-free retail

The Redmond-based software giant has been talking to Walmart about using the tech, which will rival Amazon’s own Go initiative
A Microsoft office building
In addition to developing retail technologies, Microsoft ranks No. 2 behind Amazon in selling cloud services

Microsoft Corp. (NASDAQ:MSFT) is reportedly working on technology that could be used to power check-out free retail stores, in a big challenge to Amazon.com Inc’s (NASDAQ: AMZN) automated grocery shop, people familiar with the matter told Reuters.

The Redmond, Washington, software giant has reportedly been talking to Walmart Inc. (NYSE:WMT), the world’s largest retailer, about using the tech, which will rival Amazon’s own Go initiative. There was a big buzz when Amazon first launched its cashier-free convenience store in the company’s hometown in Seattle in January.

Amazon is hoping that by making convenience store trips even faster, it will raise the bar for brick-and-mortar shopping in much the same way that Amazon Prime did for online shopping and delivery. But competition is rearing its head.

Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart about a potential collaboration,” reported Reuters.

READ: Amazon unveils Alexa-enabled smart homes in marketing plug

At the futuristic Amazon Go convenience store in Seattle, customers simply scan their phone to enter. The store is outfitted with a cocktail of modern technology including cameras and sensors that enable shoppers to simply grab items off shelves and automatically get charged the right amount without stopping to pay upon exit.

“Amazon Go, which will soon open in Chicago and San Francisco, has sent rivals scrambling to prepare for yet another disruption by the world’s biggest online retailer,” reported Reuters adding that some retailers have “tested programs” where customers scan and bag each item as they shop, with mixed results.

Now Microsoft is stepping in to become “a strategic ally” to retailers which is big business. 

In addition to developing retail technologies, Microsoft currently ranks second, behind Amazon, in selling cloud services that are key to running e-commerce sites.

Microsoft was up 0.3% to US$101.10, while Amazon also rose slightly in morning trade.

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