AVA retail .Ai opening Choice market stores to public soon with frictionless shopping

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DENVER — Choice Market will be the latest convenience store retailer to enter the autonomous checkout space with the opening of its third location.

The new, 2,700-square-foot format will open during the second half of 2019 at 2200 East Colfax and feature fuel pumps, electric vehicle supercharging, a bike share terminal, electric scooter charging stations and solar collection on the canopy.

It will also offer autonomous checkout, order and pay ahead via the Choice mobile app and traditional checkout.

"There's nothing more valuable than our customer's time and we are really excited to offer this new format which allows them to combine several different shopping occasions in one stop, while providing them the option to skip the checkout process all together," said Mike Fogarty, founder and CEO of Choice Market. "If customers cannot make it to the store, we will deliver any of our products to their doorstep within 45 minutes. That is true convenience."

Fogarty was a featured speaker at the 2018 Convenience Store News Convenience Foodservice Exchange in September.

To enable the autonomous checkout, Choice partnered with Ava Retail, which uses artificial intelligence, computer vision and internet of things to track customer's purchases within the store. This platform uses less hardware and infrastructure than other competitors while still leveraging the powerful Microsoft Azure cloud, according to the company.

"Real convenience is what Choice Market is doing using our technology — offering their customers a truly automated experience," said Ava Retail CEO Atul Hirpara. "Retail is undergoing a major transformation. With the power of Ava's technology, Choice Market is pioneering this transformation."

Choice currently has one location open in downtown Denver. A second store, which is under construction, is set to open in the second 2019 in south Denver. With the upcoming changes to liquor laws, Choice will also be one of the first companies in Colorado to offer delivery of prepared foods, groceries, and full strength beer in one transaction, according to the company.

To facilitate the company's growth, the company hired industry veteran John Varsames as its chief operating officer. Varsames has more than 30 years of experience with opening and operating natural groceries, including leadership positions at Wild Oats, Whole Foods and Alfalfas.

"I am thrilled to be joining the Choice Market team to help lead business operations and grow this exciting brand," Varsames said. "Healthy convenience is a fast-growing segment and our innovative approach will be a great addition to Colfax."

"We're honored to partner with Choice Market to create a fresh, new concept at the intersection of healthy living and convenience. Chute Gerdeman and Choice Market share similar brand values — belief in doing good for the people and communities that we serve," said Chute Gerdeman CEO Brian Shafley.

"As creators of brand experience and customer engagement, we look forward to our collaboration with this future-looking brand partner, and are confident our work together will further propel the mission of Choice Market," he added.

For this project, Choice has partnered with local developer St. Charles Town Co., which has a history of adaptive reuse and urban revitalization in the Denver area.

"A contemporary, fresh, and local market will fill a huge void in this dense part of the city. It has been nearly two decades since we had Wild Oats next door to this site," said Charlie Woolley, principal at St. Charles Town Co. "We are pleased to partner with Choice to bring fresh food and innovation to the neighborhood."

Denver-based Choice Market combines the operating hours, store size and transaction times of a traditional convenience store with the product selection of a natural grocery and fast casual restaurant.

AVA Retail’s CEO Shares What Drives Home Improvement Shoppers… and It’s Not Necessarily Price

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Lowe’s is testing augmented reality and virtual reality tools it says helps customers visualize and “feel” a large home improvement product in the context of the customer’s living space.

“We look at age-old customer problems,” said Josh Shabtai, Lowe’s director of lab productions at Lowe’s Innovation Labs. “These are problems that keep resurfacing that folks haven’t solved yet. Our hypothesis is that as we move people closer to realizing their visions, they’ll feel more confident.”

Lowe’s Innovation Labs, with offices in Kirkland, Washington, Mooresville, North Carolina and Bangalore, India, were established four years ago to delve deeper into these questions, said Shabtai. Often working with startups, the company has since rolled out several pilot projects to test customers’ comfort with virtual and augmented reality, including Holoroom How-To, which immerses a customer in a DIY project – such as tiling a shower – and gives them step-by-step instruction to complete the task; employee training programs that involve virtual reality; Holoroom Test Drive, a feature that uses VR to offer customers a chance to sense the feeling they are actually holding and using a power tool; and “View in Your Space,” a mobile app feature which lets customers visualize how a piece of furniture may fit within the physical dimensions of their own living spaces. Of these pilots, two currently are still in market, including Holoroom Test Drive in Charlotte and the AR feature which went live for Android users in March.

While quick turnaround trials may suggest there are challenges getting customers to comfortably use the technology on a regular basis, Shabtai said the timing is part of Lowe’s approach to test new use cases, study the outcomes, and apply the lessons to future releases. Other retailers are also jumping on the VR/AR bandwagon, including Home Depot and Walmart.

“We’re trying to refine the experience and move on to an application that will be better and ready to scale,” Shabtai said.

Shabtai said early results are showing that VR-and AR-enabled tools offer two key use cases: helping customers better navigate how they’ll use tools or whether products are physically compatible with their homes; and helping employees learn more quickly to offer more personalized expertise, and ultimately, add more value to the in-store experience.

“When [customers] come into a Lowe’s store, they want to talk to an employee who is a real expert in the space,” said Shabtai. According to company proprietary data, employees who are trained on machinery using VR are 76 percent more likely to try out a piece of machinery compared to those who were trained using conventional methods; and customers have 42 percent greater recall with VR tools compared to YouTube how-to videos.

He conceded that the biggest challenge standing in the way of more mainstream adoption is cost, while AR can be more quickly deployed given the ubiquity of smartphones that are already equipped with enabling technology. Retailers’ advantage — particularly those whose core product offerings are big-ticket home appliances — is to tie the customer closer to the brand through these types of immersive efforts. Tactile experiences through virtual and augmented reality ways legacy retailers can keep customers loyal, especially with competition from Amazon.

“Amazon wins on convenience and selection, so how can retailers combat that?” said Jim Cusson, president of retail marketing agency Theory House.”A lot of this has to do with the experience and brand engagement [derived from immersive tools like VR and AR].” Morningstar analyst Jaime Katz wrote in a recent report that Lowes’ business model is built off of customer service, knowledge, and innovation; using VR and AR could help augment its reach.

Despite larger retailers’ shift to AR and VR as differentiators, there’s a risk customers may preview items within the VR and AR interfaces and simply buy them on Amazon, so retailers like Lowe’s need to focus on those customers whose core goal is the pride they derive from carrying out hands-on home improvement projects. These customers aren’t necessarily motivated by price, said Atul Hirpara, CEO of AVA Retail.

“DIY shoppers enjoy visiting stores and build things that make them proud,” he said. “It’s not necessarily about money; what AR can do is augment their imaginations.”

Microsoft’s Partnerships with Walmart and AVA Retail Bigger News Than Prime Day?

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Prime Day, Shmime Day.

Amazon dominated the headlines this week with its annual July holiday. But I, for one, did not give it much notice. It has become de rigueur for Amazon. In fact, whatever hiccups Amazon did encounter this week will only make it stronger in the long run and possibly better prepare Amazon for what I fear more than anything else in the world—a last-minute preemptive Prime Day a week or two before Black Friday somewhere down the line. Such a move would be the Death Star, planet-destroying blow to traditional holiday retail. Even a minuscule 0.000001% chance of this happening frightens the hell out of me.

So, until then, July is just an amuse-bouche and not a time to get overwhelmed with Amazon-related Prime Day shenanigans. It is far more important to keep one's eyes on the prize each week, to look past Prime Day, and to maintain focus on who (and who is not) planning ahead for the future and going after the next great innovation in retail—the personalized physical store—so as not to be left in a cloud (pun intended, as you will see) of dust ten years down the road.

The most important news of this past week was therefore not Prime Day, but Walmart's clear decision to throw its hat into the next-generation retail ring with its new long-term partnership with Microsoft.

As I wrote recently, Amazon and Alibaba have both been doing their damnedest to begin defining what the future world of retail looks like: Amazon with Amazon Go and Alibaba, most specifically, with its Hema grocery store in China. While the physical superstructures of these installations are almost irrelevant, the technical operating platforms for data capture atop which both of these concepts sit are vitally important.

Just as e-commerce debuted in the late 1990s, nearly 30 to 40 years after the last large-scale innovation in retail, quite soon a new technological operating system for retail will also emerge on the same time trajectory, sometime between 2020 and 2030. The race is on to see who cracks the code first and who then benefits from selling this system to the countless other retailers that could never develop something so advanced on their own.

Sound familiar? It should. It is the same mousetrap Amazon laid with its e-commerce browser at the turn of the century, when Amazon powered many retailers' e-commerce businesses. No one should be surprised that Amazon is at it again and that Alibaba is thinking the same way.

Enter Walmart.

Walmart smartly realizes that it cannot lay dormant while Amazon and Alibaba chase this Holy Grail, which is why the announcement of its partnership with Microsoft this week was so important.

Walmart inked a partnership with Microsoft for a five-year, full-suite cloud deal. According to Retail Dive, Walmart will "capitalize on Microsoft's artificial intelligence, machine learning and data solutions for cloud innovation projects, including building out its global IoT platform on Azure."

Effectively this statement means that the deal could begin to give Walmart the three legs to the stool it needs to compete effectively in the world of next-generation retail: cloud commerce, mobile applications and location analytics (aka the Holy Trinity).

The intersection of these three technological capabilities is what will give retailers an unprecedented level of data capture within a physical retail store. It is what will turn physical stores into the analytical equivalents of e-commerce browsers. It is what will enhance not only the science of physical retailing, but the artistic expression of it as well.

Harnessing these three technologies will give retailers, all things being equal, an almost regression-like understanding of the value or impact in real-time of every action and reaction within a store, meaning physical experiences will be able to be tailored uniquely to each individual who decides to enter a retailer's four walls.

The days of a "mass" experience will be over. Every experience from one individual to the next will be different.

Microsoft is a strong partner to help Walmart pull something off within this realm. Microsoft's Azure cloud services give Walmart the speed, scale and security to process the data required in real-time; Microsoft's stable of mobile application partners, often on display annually in Microsoft's booth at NRF, is incredibly formidable; Microsoft's recently announced Partner of the Year, AVA retail .AI , also happens to specialize in location analytics and visual recognition technology, which, for those scoring at home, happens to be similar to the components within Amazon's Go concept; and Microsoft, unlike other cloud providers not named Amazon, actually runs its own stores.

Everything within this potential partnership just passes the smell test.

But keep in mind, Walmart is only through mile one of the next-generation retail marathon.

While partnering with Microsoft is the right move by Walmart, Walmart's next-generation life will only take shape once the company pushes itself to the edge of its current comfort zone. Amazon and Alibaba likely both have a leg up in the race because of their lack of existing physical retail operational, technological, architectural and cultural debt, so Walmart will, in many ways, have to work harder than the next guy.

The greatest barriers to entry for new retailers are physical stores themselves. Physical stores are expensive for upstarts to build. What matters, then, is not so much the Walmart stores that people know today, but the Walmart stores that people will know 10 to 20 years from now.

Future Walmart stores will need to look vastly different, regardless of how ready the Baby Boomers and Generation X are for the eventual transformation. Transforming Walmart stores for future generations will require thinking similar to how Apple designs its products. Just as Apple removes features that customers love in nearly every new product release—things like disk drives, earphone jacks, etc.—so too must current aspects of Walmart's business go away in the aim of long-term generational progress.

Will Walmart have the grit and determination to keep at it?

Yes.

Doug McMillon has thus far shown that he is the right man for the job. The partnership with Microsoft signals that he is taking the right approach and will not go down without a fight. While many retailers find themselves in a position unable to fight or are even happy treading water in the hopes of riding out what is, in reality, an insurmountable storm, McMillon appears to be willing to make the tough choices required to move Walmart forward.

McMillon appears to be playing the long game—selling off assets to sharpen the company's focus (Asda), bringing in new talent and perspectives (Marc Lore, Valerie Casey and others), focusing more on R&D (Store No. 8), and finding the right partners that could be essential to survival (Microsoft).

2019 could be the watershed year for McMillon and for Walmart. It could be the year that the seeds of his hard work, firmly planted in the ground, take root, begin to sprout and give the public a glimpse of Walmart's own Amazon- and Alibaba-like vision of what the future could be.

Until now, the public has seen only small, incremental tidbits of what Walmart's store of the future could look like, but this new partnership with Microsoft likely portends that there is far more on the horizon, that Walmart too will dream the American dream of entrepreneurship and do all that it can to lead retail through the next great innovation cycle in retail.

The clock is ticking. Now is not the time to follow. Now is the time to lead. America needs Walmart to do exactly what it appears to be doing.

AVA CEO Talks Creating a System to Compete with Amazon Go

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AVA retail, utilizing the “internet of things” has created a smooth, quick and easy solution that transforms store visits for the customer and the retailer. Our frictionless experience allows the customer to check in, shop and automatically check out without ever having to stand in line.

Once a customer enters the store, checks in via the AVA SmoothShop app, (or through the retailer’s app) AVA SmoothShop does the rest. Our system validates every item selected and holds them in our SmoothShop Cart, intelligently removing any products that may have been placed back on the shelf. Once the customer has left they instantly receive a confirmation and receipt on their smartphone. It’s that easy! AVA SmoothShop enables friction free, self-checkout!

AVA SmoothShop puts the customer first, offering a convenient and time saving option for shopping on the go.

What Sources are Saying about How Microsoft and AVA Could be Taking on Amazon

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Microsoft is testing technology that will track what items people pick up while shopping, and another Redmond company is working with Microsoft on the technology for physical stores, news services reported.

Microsoft may be gearing up to challenge Amazon on its home turf — the world of retail shopping — by developing cashier-less technology for grocery stores.

Six people told Reuters news service that the Redmond software company is testing technology that will track what items people pick up while shopping, something that could eliminate or reduce the need for cashiers.

Redmond-based AVA Retail, which develops technology to collect data about shoppers in stores, also told The Associated Press it is working with Microsoft on the technology for physical stores.

Amazon’s convenience store that uses cashier-less technology, Amazon Go, opened to the public in Seattle in January.

That store requires shoppers to swipe an app when they walk in, then uses computer-vision technology to track them and their purchases around the store. When people are done shopping, they can walk out and are charged through the Amazon app.

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.

A Microsoft spokeswoman declined to comment.

Microsoft’s interest in the technology is hardly a secret. Microsoft for years has operated a Retail Experience Center from a nondescript building near its Redmond headquarters campus, meant as a showcase for Microsoft products as well as an experimental environment for the company’s business-sales groups to try out emerging technologies and show them to potential customers.

During a media tour in 2015, Microsoft showed how a big-box electronics store could keep track of where customers were and what items they were looking at or picking up by using technology borrowed from Microsoft’s Kinect motion sensor.

A tour of the same Microsoft retail facility in 2016 showed Bluetooth beacons that could track customers’ movement, Redmond Magazine reported. At the time, the company was partnering with AVA Retail to pinpoint what a shopper was reaching for on a shelf.

AVA Retail CEO Atul Hirpara said Thursday that the company is using Microsoft’s Azure cloud to develop technology that will enable stores to have a clerk-less checkout experience. AVA’s technology could roll out in the next six to eight months, he said.

The company plans to co-sell the product with Microsoft, but the clerkless techology is owned by AVA, Hirpara said.

Reuters reported that Microsoft’s technology could be getting closer to deploying in stores. Microsoft could be in talks with Amazon rival Walmart, Reuters’ sources said.

AVA’s Hirpara declined to disclose if his company has any ongoing talks with Walmart.

Microsoft looks to compete with Amazon with cashier-less stores

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Microsoft is working on automated checkout technology that could help retailers compete with Amazon’s new cashier-less stores.

One firm building automated checkout systems, Ava Retail, said Thursday it is working with Microsoft on the technology for physical stores. Both companies have headquarters in Redmond, Washington.

Ava Retail CEO Atul Hirpara said Microsoft could become a leader in the field because it has a strong cloud computing platform. That technology would power the retail system by pulling in data from in-store cameras or sensors.

Amazon opened its first cashier-less Amazon Go store in Seattle this year and plans more locations in Chicago and San Francisco. Overhead cameras and other technology help keep track of customers and what they're buying.

Microsoft's interest in working with retailers on similar technology was reported earlier by Reuters. It remains unclear how far along Microsoft is in the project. The report of its involvement didn't surprise others in the fast-growing automated checkout industry.

Michael Suswal, co-founder of San Francisco-based startup Standard Cognition, said Microsoft has the teams capable of developing the software and the infrastructure needed to deploy it broadly.

Suswal said his firm is also working with retailers — but not currently with Microsoft — on its own automated checkout system using overhead cameras.

"Within five years, everyone in the country will have visited an autonomous checkout store," Suswal said.

Microsoft follows Amazon in pursuit of cashier-less stores

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Microsoft is working on automated checkout technology that could help retailers compete with Amazon’s new cashier-less stores.

One firm building automated checkout systems, Ava Retail, said Thursday it is working with Microsoft on the technology for physical stores. Both companies have headquarters in Redmond, Washington.

Ava Retail CEO Atul Hirpara said Microsoft could become a leader in the field because it has a strong cloud computing platform. That technology would power the retail system by pulling in data from in-store cameras or sensors.

Amazon opened its first cashier-less Amazon Go store in Seattle this year and plans more locations in Chicago and San Francisco. Overhead cameras and other technology help keep track of customers and what they're buying.

Microsoft’s interest in working with retailers on similar technology was reported earlier by Reuters. It remains unclear how far along Microsoft is in the project. The report of its involvement didn’t surprise others in the fast-growing automated checkout industry.

Michael Suswal, co-founder of San Francisco-based startup Standard Cognition, said Microsoft has the teams capable of developing the software and the infrastructure needed to deploy it broadly.

Suswal said his firm is also working with retailers — but not currently with Microsoft — on its own automated checkout system using overhead cameras.

“Within five years, everyone in the country will have visited an autonomous checkout store,” Suswal said.

Microsoft follows Amazon in pursuit of cashier-less stores

Source:

Microsoft is working on automated checkout technology that could help retailers compete with Amazon’s new cashier-less stores.

One firm building automated checkout systems, Ava Retail, said Thursday it is working with Microsoft on the technology for physical stores. Both companies have headquarters in Redmond, Washington.

Ava Retail CEO Atul Hirpara said Microsoft could become a leader in the field because it has a strong cloud computing platform. That technology would power the retail system by pulling in data from in-store cameras or sensors.

Amazon opened its first cashier-less Amazon Go store in Seattle this year and plans more locations in Chicago and San Francisco. Overhead cameras and other technology help keep track of customers and what they’re buying.

Microsoft’s interest in working with retailers on similar technology was reported earlier by Reuters. It remains unclear how far along Microsoft is in the project. The report of its involvement didn’t surprise others in the fast-growing automated checkout industry.

Michael Suswal, co-founder of San Francisco-based startup Standard Cognition, said Microsoft has the teams capable of developing the software and the infrastructure needed to deploy it broadly.

Suswal said his firm is also working with retailers — but not currently with Microsoft — on its own automated checkout system using overhead cameras.

“Within five years, everyone in the country will have visited an autonomous checkout store,” Suswal said.

Exclusive: Microsoft takes aim at Amazon with push for checkout-free retail

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SAN FRANCISCO (Reuters) - Microsoft Corp (MSFT.O) is working on technology that would eliminate cashiers and checkout lines from stores, in a nascent challenge to Amazon.com Inc’s (AMZN.O) automated grocery shop, six people familiar with the matter told Reuters.

The Redmond, Wash.-based software giant is developing systems that track what shoppers add to their carts, the people say. Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart Inc (WMT.N) about a potential collaboration, three of the people said.

Microsoft’s technology aims to help retailers keep pace with Amazon Go, a highly automated store that opened to the public in Seattle in January. Amazon customers scan their smartphones at a turnstile to enter. Cameras and sensors identify what they remove from the shelves. When customers are finished shopping, they simply leave the store and Amazon bills their credit cards on file.

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. Some have tested programs where customers scan and bag each item as they shop, with mixed results.

For Microsoft, becoming a strategic ally to retailers has meant 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, for instance.

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 Amazon’s competitors cannot afford to ignore.

“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. Cashier is one of the most commonly held jobs in the United States.

Microsoft said it “does not comment on rumors or speculation.” Walmart and Amazon declined to comment.

● EXPENSIVE EQUIPMENT

Microsoft’s effort to date has largely fallen under its Business AI, or artificial intelligence, team, one person said. A group consisting of 10 to 15 people has worked on a host of retail store technologies, and they have presented some of their efforts in front of CEO Satya Nadella, the person said.

In a meeting with the team several months ago, Nadella recommended an “intelligent edge” device that could manage connected gadgets such as cameras on site with minimum data transfers to the cloud, which would cut down on costs, said the person.

Making its technology cheap enough so it does not eviscerate grocers’ already thin profit margins is a major challenge for Microsoft, another person said.

Microsoft already showcases the basics for automated checkout at its Retail Experience Center in Redmond. It has half a dozen partners, including Redmond-based AVA Retail, that are building their own checkout-free or related services atop Microsoft’s cloud, some of the people said. Sales of partners’ services result in cloud revenue for Microsoft, along with insight into the market for new retail technologies.

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, people said. Still, the industry is playing catch-up to Amazon.

The company spent four years building Amazon Go in secret, before launching an employee-only pilot on its Seattle campus in 2016. It collected data for nearly 14 months more before opening the doors to its first Seattle store. Amazon has said it has no plans to introduce checkout-free technology to its Whole Foods Market grocery chain, which it acquired last year.

The company is still hard at work improving the service. Amazon Vice President Dilip Kumar told Reuters in an interview earlier this year that the company is training computers to identify items or activities with as little information as possible. “It’s a really hard problem,” said Scott Jacobson, managing director of Madrona Venture Group, adding it’s “one that Amazon is uniquely positioned to solve.”

Microsoft could be aiming at Amazon with its own push for checkout-free retail

Source:

• Microsoft is reportedly working on technology that would eliminate cashiers and checkout lines from stores, in an early challenge to Amazon's automated grocery shop, Amazon Go.

• Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart about a potential collaboration, according to sources.

• 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.

• Microsoft said it "does not comment on rumors or speculation." Walmart and Amazon declined to comment.

SAN FRANCISCO (Reuters) - Microsoft is working on technology that would eliminate cashiers and checkout lines from stores, in a nascent challenge to Amazon's automated grocery shop, six people familiar with the matter told Reuters.

The Redmond, Washington-based software giant is developing systems that track what shoppers add to their carts, the people say. Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart about a potential collaboration, three of the people said.

Microsoft's technology aims to help retailers keep pace with Amazon Go, a highly automated store that opened to the public in Seattle in January. Amazon customers scan their smartphones at a turnstile to enter. Cameras and sensors identify what they remove from the shelves. When customers are finished shopping, they simply leave the store and Amazon bills their credit cards on file.

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. Some have tested programs where customers scan and bag each item as they shop, with mixed results.

For Microsoft, becoming a strategic ally to retailers has meant 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, for instance.

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 Amazon's competitors cannot afford to ignore.

"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. Cashier is one of the most commonly held jobs in the United States.

Microsoft said it "does not comment on rumors or speculation." Walmart and Amazon declined to comment.

● Expensive equipment

Microsoft's effort to date has largely fallen under its Business AI, or artificial intelligence, team, one person said. A group consisting of 10 to 15 people has worked on a host of retail store technologies, and they have presented some of their efforts in front of CEO Satya Nadella, the person said.

In a meeting with the team several months ago, Nadella recommended an "intelligent edge" device that could manage connected gadgets such as cameras on site with minimum data transfers to the cloud, which would cut down on costs, said the person.

Making its technology cheap enough so it does not eviscerate grocers' already thin profit margins is a major challenge for Microsoft, another person said.

Microsoft already showcases the basics for automated checkout at its Retail Experience Center in Redmond.

It has half a dozen partners, including Redmond-based AVA Retail, that are building their own checkout-free or related services atop Microsoft's cloud, some of the people said. Sales of partners' services result in cloud revenue for Microsoft, along with insight into the market for new retail technologies.

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, people said.

Still, the industry is playing catch-up to Amazon.

The company spent four years building Amazon Go in secret, before launching an employee-only pilot on its Seattle campus in 2016. It collected data for nearly 14 months more before opening the doors to its first Seattle store. Amazon has said it has no plans to introduce checkout-free technology to its Whole Foods Market grocery chain, which it acquired last year.

The company is still hard at work improving the service. Amazon Vice President Dilip Kumar told Reuters in an interview earlier this year that the company is training computers to identify items or activities with as little information as possible.

"It's a really hard problem," said Scott Jacobson, managing director of Madrona Venture Group, adding it's "one that Amazon is uniquely positioned to solve."

Microsoft is working on a way to track what shoppers add to their carts as it takes on Amazon Go

Source:

• Microsoft is working on technology that would eliminate cashiers and checkout lines from stores.

• It would be a nascent challenge to Amazon.com's automated grocery shop.

• The Redmond, Washington-based software giant is developing systems that track what shoppers add to their carts.

Microsoft is working on technology that would eliminate cashiers and checkout lines from stores, in a nascent challenge to Amazon.com's automated grocery shop, six people familiar with the matter told Reuters.

The Redmond, Washington-based software giant is developing systems that track what shoppers add to their carts, the people say. Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart about a potential collaboration, three of the people said.

Microsoft's technology aims to help retailers keep pace with Amazon Go, a highly automated store that opened to the public in Seattle in January. Amazon customers scan their smartphones at a turnstile to enter. Cameras and sensors identify what they remove from the shelves. When customers are finished shopping, they simply leave the store and Amazon bills their credit cards on file.

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. Some have tested programs where customers scan and bag each item as they shop, with mixed results.

For Microsoft, becoming a strategic ally to retailers has meant 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, for instance.

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 Amazon's competitors cannot afford to ignore.

"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. Cashier is one of the most commonly held jobs in the United States.

Microsoft said it "does not comment on rumors or speculation." Walmart and Amazon declined to comment.

● Expensive equipment

Microsoft's effort to date has largely fallen under its Business A.I., or artificial intelligence, team, one person said. A group consisting of 10 to 15 people has worked on a host of retail store technologies, and they have presented some of their efforts in front of CEO Satya Nadella, the person said.

In a meeting with the team several months ago, Nadella recommended an "intelligent edge" device that could manage connected gadgets such as cameras on site with minimum data transfers to the cloud, which would cut down on costs, said the person.

Making its technology cheap enough so it does not eviscerate grocers' already thin profit margins is a major challenge for Microsoft, another person said.

Microsoft already showcases the basics for automated checkout at its Retail Experience Center in Redmond.

It has half a dozen partners, including Redmond-based AVA Retail, that are building their own checkout-free or related services atop Microsoft’s cloud, some of the people said. Sales of partners’ services result in cloud revenue for Microsoft, along with insight into the market for new retail technologies.

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, people said.

Still, the industry is playing catch-up to Amazon.

The company spent four years building Amazon Go in secret, before launching an employee-only pilot on its Seattle campus in 2016. It collected data for nearly 14 months more before opening the doors to its first Seattle store. Amazon has said it has no plans to introduce checkout-free technology to its Whole Foods Market grocery chain, which it acquired last year.

The company is still hard at work improving the service. Amazon Vice President Dilip Kumar told Reuters in an interview earlier this year that the company is training computers to identify items or activities with as little information as possible.

"It's a really hard problem," said Scott Jacobson, managing director of Madrona Venture Group, adding it's "one that Amazon is uniquely positioned to solve."