Innovation

Why AI-powered, cashier-free stores are the unavoidable future of retail

Microsoft is going head to head with Amazon, developing checkout-free retail technology of its own.

Microsoft is developing a system that tracks what items shoppers in a store place in their carts, eliminating the need for cashiers and putting the company in direct competition with Amazon in the retail space, Reuters reported Thursday.

Microsoft's system follows Amazon Go, Amazon's fully-automated grocery store with no cashiers or checkout lines that formally opened in Seattle earlier this year. Amazon confirmed in May that it would roll out two more stores in Chicago and San Francisco.

Now, Microsoft has shown sample technology that does the same thing to retailers around the world, according to sources cited by Reuters. The tech giant has been in talks with Walmart, which has been testing its own fully-automated stores, about a potential collaboration, according to the report.

SEE: IT leader's guide to the future of artificial intelligence (Tech Pro Research)

It's not yet known how soon this technology could be available, if at all, Reuters noted. However, it's another sign that the future of retail is moving more toward automation and cashierless stores, raising concerns about potential job losses and the future of automation in retail.

Microsoft and Amazon are far from the only retailers experimenting with artificial intelligence (AI). McDonald's announced plans last year to replace cashiers with digital ordering kiosks in 2,500 of its restaurants, and a local grocery store in Wisconsin features a mobile shopping experience that allows customers to scan items as they shop and pay on the way out without needing a cashier.

"This is the future of checking out for convenience and grocery stores," Gene Munster, head of research at Loup Ventures, told Reuters. The US market for automated checkout is worth $50 billion, the firm estimated.

As automated stores begin opening their doors, many have raised concerns about the possibility of tech replacing human workers in retail jobs. However, the impact of automation remains unclear. While some argue that AI will lead to new types of jobs for displaced workers, other say that it will destroy more jobs than it creates.

As noted by TechRepublic's Conner Forrest, automated stores and other businesses will require technical experts to repair and maintain the hardware, as well as human store managers. However, it may not be realistic to assume that every displaced cashier can be trained to work with AI-powered machines, or that such training would be available. While companies like Microsoft and Amazon could take on this task, it will likely need to have a positive impact on their bottom line before it happens.

The big takeaways for tech leaders:
  • Microsoft is reportedly developing a system that tracks what items shoppers in a store place in their carts, eliminating the need for cashiers in stores.
  • This technology would put Microsoft in direct competition with Amazon Go stores, and shows how the future of retail is likely to be automated.

Also see

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Image: iStockphoto/Kwangmoozaa

About Alison DeNisco Rayome

Alison DeNisco Rayome is a Senior Editor for TechRepublic. She covers CXO, cybersecurity, and the convergence of tech and the workplace.

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