Microsoft exploring checkout-less technologies

Photo: Getty Images
Jun 18, 2018
Tom Ryan

Microsoft is working on autonomous-checkout technologies that could help retailers compete with Amazon’s cashierless stores.

Sources told Reuters that Microsoft is testing attaching cameras to shopping carts in order to track purchases as customers walk stores. Amazon Go’s system requires hundreds of cameras installed in the ceiling and Microsoft’s cart-camera set-up could prove to be more cost-effective.

Microsoft is also reportedly exploring options around smartphone checkout.

A computer vision specialist from Amazon Go has been hired for the project. The technology has been shown to retailers and discussions have taken place with Walmart about a potential collaboration, according to the Reuters.

The Seattle Times wrote, “Amazon could sell that technology to other retailers. But a competing technology from Microsoft could be an attractive option because retailers might see Microsoft as less of a competitive threat than Amazon.”

The first Amazon Go opened in Seattle in January, with future openings planned in Chicago and San Francisco.

Microsoft ranks second behind Amazon in cloud services that help support e-commerce sites and the clerk-less checkout is being supported by Microsoft’s cloud. In the past, the tech giant has also showcased how its Kinect motion sensor can track the location of shoppers in stores as well as what they’re looking at and picking up.

Retail and supply chain consultant Brittain Ladd told USA Today, “Microsoft especially has an opportunity to leverage their technology prowess to not copy Amazon Go but instead go after the big prize – duplicate the Amazon Go experience in much larger retail formats such as supermarkets.”

Kroger, Meijer and Sam’s Club are among the chains using scan & go technologies to avoid cashier-checkouts while JD.Com in China is using facial-recognition technology as a checkout-free solution. Walmart recently discontinued its second test of the technology as consumers chose to stick with the traditional shopping and checkout process rather than making the switch.

DISCUSSION QUESTIONS: Is Microsoft investing in automated checkout technology good news for retailers and the evolvement of the technology? Does the rollout of the technology seem more imminent now or is it likely years down the road? What are some unknowns that may be holding back the technology’s effectiveness?

Please practice The RetailWire Golden Rule when submitting your comments.
"The more legitimate tech players with viable cashier-less solutions, the merrier."
"...the technology is not in hot demand because, as far as the customer is concerned, the friction of paying at the register is not particularly great."
"From what I have read, Amazon Go’s technology is quite extensive and expensive. This opens the door to competition and to Microsoft."

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24 Comments on "Microsoft exploring checkout-less technologies"

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Jon Polin

My highly unscientific research — i.e. talking to numerous friends — confirms that many consumers are happy to still shop in stores but that 0 percent of consumers like waiting in checkout lines. The more legitimate tech players with viable cashier-less solutions, the merrier.

Sterling Hawkins

Survey says: yes! Shoppers will inevitably move to faster, easier (and cheaper) options. It is just a matter of time before this it widely available. And I think it’s smart for Microsoft and a number of other startups to be stepping into the space. It’s so new there are likely a few ways to coming at it (cameras in ceiling, on carts, etc.) that will achieve an effective end result.

Bob Amster

Any innovation is always welcome and it makes the marketplace more competitive, bringing the cost of acquisition lower for retailers. The Amazon Go solution appears to be capital intensive and, therefore, a solution begging for a competitive offering. Nothing concrete is likely to happen in less than two years. These companies are investing in R&D because they can. Cost, speed and, above all, accuracy are the critical hurdles to overcome.

Charles Dimov

This is great news for retailers. Retailers will be pleased to catch up with similar technology to Amazon but NOT have to purchase it from their competitor. Whether this is an immediate play or not — remember that Amazon Go is not rolling out on every corner yet. So it will be important to taper our expectations. On a five year horizon, we should start seeing these tech options in nearby stores.

Lyle Bunn (Ph.D. Hon)

When tech providers provide cross-device, friction-less, secure automated checkout that integrates with a back office we will have arrived. Given the complex bundle of functionality that must be delivered, it seems we are still in the customized application phase. The good thing is that lots of learning and insights come forward. No we are not there yet.

Larry Negrich

Reducing friction and waiting times can be an important component of improving the customer experience. These technologies may also free up store management and associates to improve customer services and attend to other important activities in the store. A number of tech vendors have started initiatives in this area in the past, including Microsoft. Amazon’s foray into the space is perhaps driving some additional interest and investment.

Shep Hyken

First, the idea of automated checkout or “cashierless” stores is here, just not at a point where it’s mainstream. Some version of this will be a part of the fabric of retail in the not-to-distant future. I like the idea of a competing technology (to Amazon) from a company as powerful and as big as Microsoft. It means everyone will up their game to provide the best solution.

The unknowns are exactly that: unknowns. We don’t know all the nuances and problems yet. But that’s why we beta test, take surveys, experiment, etc. Look how online retail has evolved over the years.

Neil Saunders

I have no doubt that automated checkout options will become more commonplace over the next 10 years. However the technology is not in hot demand because, as far as the customer is concerned, the friction of paying at the register is not particularly great. Indeed, there are many who actually welcome and enjoy the interaction with staff.

Adrian Weidmann

The opening of Amazon Go should have shown us all the future of brick-and-mortar retail. The technology superpowers certainly know this and they are all experimenting and developing their answers to this reality. I have been using vision science technology for more than 10 years as a data source but I believe the entire supply chain including checkout will be solved by RFID-based technologies. This technology when integrated into a different workflow paradigm can transform the retail landscape. This will require a collaborative effort by both brands and retailers along with an acknowledgement that retail is, and has always been, a consignment business.

Chris Buecker

This is good news. Amazon Go’s current technology will not be the standard model, as it is too complicated and very cost-intensive. We will see different models and technologies being applied in the coming years. I believe the driver will not be Amazon but more the Chinese giants such as Alibaba or And it is a playing field for disruptors. Maybe the standard will come from a startup of which we have heard very little so far.

Brandon Rael

The move to automated checkout experiences is gaining momentum, however the business case for Amazon Go and Microsoft’s latest innovation really will resonate in certain segments, such as convenience and grocery. Any high touch or service segment requires the human connection, and consumers by nature still want to have that advisory experience.

It’s amazing how fast technology and innovations are changing how we live and shop. What better example of innovation and automation than Amazon Go? Yet despite all this disruption, store associates will remain as important as ever. There’s no question in my mind that the physical retail store is really where brands come to life, where stories are told and where a closer connection to the local communities are built.

Ken Lonyai

This is definitely a future direction for retail so having multiple vendors is always good for competition. However, I’ve worked with these technologies and automated checkout using cameras is very difficult to master and prone to higher rates of shrinkage and over-rings, especially via the Amazon Go system — but the press won’t hear about that.

In keeping with Friday’s BrainTrust Live discussion, RFID scan and go checkout has existed at least 15 years and is an alternative with supply chain benefits. So given that these shopper conveniences are capital intensive, even when cart-mounted, a retailer has to really evaluate pros and cons of technology they want to invest in and not be influenced by media hype, especially if they don’t have a cloud computing platform to underwrite their shiny new technology forays.

Ralph Jacobson

Many tests have been going on for years in this area. I do see more and more pilots succeeding in the near term, however widespread adoption is most likely a few years away. That doesn’t mean this won’t happen, it just has to go through several more refinements to be able to be implemented at scale.

Lee Kent

From what I have read, Amazon Go’s technology is quite extensive and expensive. This opens the door to competition and to Microsoft. They are not new to the checkout process or to retail so they are already in a good position to address all the moving parts. As many have said, we are not there yet however, Microsoft is more ready than most. For my 2 cents.

Roy White

Current store formats do not appear to be working as well as they used to, and prototypes of new configurations are an absolute necessity if the brick-and-mortar store is to evolve into something that will appeal to the 21st century shopper. The availability of cashier-less technologies besides those from Amazon is a highly positive step that opens more opportunities for retailers to begin designing a more technology-oriented store and changing the time-worn footprints of today. While this may or may not be the way to go, experimentation is essential to find out what will work in the future.

Ken Morris

Making cashier-less technology accessible to the retail industry is a good thing. Once the technology and processes for cashier-less technology get perfected and it becomes more pervasive, consumers will appreciate the friction-less checkout. With more technology options available, retailers will have choices and the competition will drive further innovation — which is a great for the industry.

It is hard to predict how fast Microsoft will perfect the new technology, but they have the cloud technology and extensive resources to make it happen. The other element that makes this possible is the advanced network solutions that optimize application performance on the network.

The two biggest things that hold back these advanced technologies are solving for all of the nuances and tricky situations with cashier-less processes and user acceptance. It will be interesting to see how this unfolds.

Steve Montgomery

Other options for this technology will be welcomed for all the reasons that have been noted. IMHO Amazon Go is, and will remain, a test concept. As it exists today it is not something that Amazon will be rolling out across the country. Nor is it ready for prime time as a product or service for Amazon to sell or lease to other retailers. Unless there is a major breakthrough in cost and/or technology it will be years before it’s more than a test. To be widely adopted it needs to prove it can work in larger formats, with more SKUs and a lower per-square foot cost.

Mohamed Amer
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
11 months 30 days ago
Technology R&D does not turn into real-world applied processes without serious investment and a healthy dose of trial and error combined with suitable market timing. That requires either addressing a known unmet need or creating a completely new product/process for a still undefined need. Microsoft’s and other companies’ investments in automated checkout adds momentum to a technological shift that addresses consumers’ complaints about the inherent high friction of queuing up, the cumbersome and time wasting item loading/unloading processes and the payment process. When was the last time you picked the shortest checkout line only to have the person in front of you pull out a handful of paper coupons to be scanned and validated? Paradoxically, what makes it even worse is that the bigger your purchase basket is (the more valuable you are as a customer), the more that the hassle of these antiquated processes becomes exaggerated. We are in the early innings for these technologies but the game will accelerate quickly as the artificial intelligence tied to new sensors quickly learn through massive data… Read more »
Gene Detroyer

IMMINENT! By the end of the year, Hema will have 60 cashier-less stores in China. And is not a small convenience-type store, it is a sophisticated supermarket.

Any tech company should be looking at this technology. It is the future. While there are certainly technical hurdles to jump, tech experience has told us that those hurdles will in fact disappear.

The biggest hurdle will be the reluctance of retailers to change. U.S. traditional retailers are historically slow to adapt.

James Tenser

You can bet that every major digital tech company is looking hard at retail store automation in the wake of the Amazon Go revelations. Not just Microsoft, but Google, Apple, Intel, Cisco and most of the larger store systems companies.

Competing retailers are likely to be suspicious of using Amazon’s technology (ask a large chain whether they would dare host their cloud systems on AWS). Amazon has plowed the ground for Microsoft and the others by demonstrating the potential for WIWO (walk-in-walk-out) store tech.

It’s worth noting that Microsoft says its solution locates a significant share of the computing power on the “intelligent edge” — that’s jargon which in this instance means it runs on connected hardware in the stores as opposed to entirely in the cloud. What an amazing bit of newspeak for the digital era! It confirms that some cutting edge solutions still need to be implemented at store level to be effective. Are you listening CIOs?

Harley Feldman

Microsoft investing in automated checkout is a good thing. Maybe the technology being developed today will be successful or not, but the research and testing will move the needle toward a solution that will be effective and liked by consumers. The technology is more imminent now due to smaller more powerful processors, better web software and faster networks. One unknown is how consumers will embrace the technologies and providing an interesting way to use automated checkout in a method that is consistent across retailers.

Matthew McAlister
As someone who has never shopped in a store that uses automated checkout technology, these are the unknowns I believe hold back the technology’s effectiveness and will reduce the rollout timeline compared to other checkout technologies: Do customers actually enjoy the experience? What is the percentage of customers who are returning to the location 3-4 months from first visit? If a store with automated checkout technology existed next to a traditional store, would consumers choose one over the other? How long does set up/ registration take, and is that a major blocker from getting in quick foot traffic in the first place? Does the technology lower prices in the store due to lower operational costs? Does the customer experience suffer from decreased store staff? I remember first seeing self-checkout lines in Kroger when I was in high school, and my family and I always preferred those methods over a traditional check out. The reasons being: sometimes you simply don’t want to make shallow conversation, when you feel that you have control over the speed of… Read more »
Tony Orlando

This technology all sounds great, but it will be difficult for an independent operator to afford the upfront costs to do this. I see many large regional chains looking at this, but even they will test it in a few stores to work out the issues before a massive changeover occurs.

What about the friendly associates who handle not only the transaction, but engage with customers to make sure their needs are all met, including carry outs, and specialty orders? We’ll see how this goes, and it will move forward at a steady pace. If costs continue to drop, then smaller businesses may adopt it as well.

We talk a lot about outstanding customer service. This could possibly backfire for some stores who make the changeover without shifting the front-end staff to other positions — such as customer service concierge agents — which would be wise.

Min-Jee Hwang

Microsoft’s investment in checkout technology is great news for retailers. Their product will be more cost-efficient and shoppers will move quickly and easily through the checkout process. Additionally, there isn’t a threat in purchasing technology from Microsoft as it would be to install a potential Amazon Go product. Retailers will be excited to catch up with Amazon without actually having to buy a product from Amazon, their competitor. However, some shoppers enjoy interacting with employees and this product may be unappealing to them. I could see this product being integrated into stores within the next ten-years, but it’s ultimately up to customers on whether it will be looked at as frivolous technology or groundbreaking innovation.

"The more legitimate tech players with viable cashier-less solutions, the merrier."
"...the technology is not in hot demand because, as far as the customer is concerned, the friction of paying at the register is not particularly great."
"From what I have read, Amazon Go’s technology is quite extensive and expensive. This opens the door to competition and to Microsoft."

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