Microsoft Corporation (Nasdaq: MSFT) is developing technology that would automate shopping and eliminate the need for cashiers and checkout lines in stores. Walmart ( WMT) is reportedly exploring a collaboration with Microsoft as both companies try to keep pace with Amazon.com ( AMZN).
Reuters reported that several people familiar with the matter say Microsoft has been demonstrating its technology to a number of global retailers and has held talks with Walmart about a potential partnership. Microsoft’s technology is likely similar to the technology used by Amazon in its recently opened Amazon Go automated store in Seattle. Amazon Go customers simply scan their phones when they enter the store and their purchases are tracked and charged automatically using cameras and sensors.
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Amazon is already planning on expanding its Amazon Go concept to two additional cities, and Walmart may be feeling the heat to increase its own shopping automation. Amazon’s AWS cloud services business is also Microsoft Azure’s main competition, so both Walmart and Microsoft have a common foe.
Loup Ventures analyst Gene Munster visited the Amazon Go location in February and says store automation is a massive opportunity. Munster estimates cashiers alone cost companies roughly $50 billion in potentially unnecessary expenses per year.
“The automated retail space is getting more and more crowded, but the Go store suggests that Amazon has the pole position,” Munster says.
Munster said Amazon likely intends to eventually license its technology to other retailers.
“While larger stores like Walmart and Target ( TGT) may not want to use the technology for competitive reasons, branded retail stores may be a fit if Amazon can create a product that helps save the retailer labor and processing costs,” Munster says.
With Amazon already seemingly out to an early lead in automated shopping, Microsoft and Walmart are logical partners. Last year, CNBC analyst Jim Cramer said if Walmart and Microsoft want to seriously threaten Amazon, they should think even bigger than a partnership.
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“You want to defeat Amazon? You merge Microsoft with Walmart,” Cramer says. “The combination would crush Amazon, pulverize it, destroy the dominance of Jeff Bezos.”
So far in 2018, Amazon has once again outperformed both Walmart and Microsoft in the market. AMZN stock is up 74 percent in 2018 compared to a 43 percent gain for MSFT and a 6 percent gain for WMT.
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Microsoft Corporation (MSFT) Targets Amazon With Automated Shopping originally appeared on usnews.com
