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Cashier-less: The Microsoft-Walmart talks explained

A possible collaboration between the tech giant and the brick-and-mortar king is a shot across Amazon's bow and the surest sign yet that cashiers are being phased out of retail

Last month, Reuters broke news that Microsoft has been working on technology to remove check-out lines and clerks from grocery stores.

On the heels of fanfare around Amazon Go convenience stores, Microsoft's entry into the space could set up a showdown between corporate giants.

Taking on Amazon in any retail environment is difficult, to say the least, but Microsoft may have an important brick-and-mortar ally. As Reuters reports, Microsoft has been in talks with Walmart to implement its technology.

To get some perspective on the possible Microsoft-Walmart alliance and what it could mean for Amazon, I reached out to Omri Mendellevich, CTO and Co-Founder of Dynamic Yield, a machine learning and personalized marketing company.

How big do you think the potential Microsoft-Walmart partnership is being viewed within Microsoft right now?

After news of discussions about a payments collaboration between Microsoft and Walmart broke, I'm positive all hands from the tech giant's business-AI team are on deck. If the deal goes through, Walmart will want Microsoft to roll out its cashier-less technology as quickly and efficiently as possible in order to best capitalize on the head start its mass retail reach affords them while Bezos gears up to launch its Amazon Go stores in Chicago and San Francisco.

Is this a compelling rejoinder to Amazon's march into brick-and-mortar retail?

According to Loup Ventures, cashier-less checkout is estimated to evolve into a $50 billion market in the U.S. alone. This partnership signifies a massive advantage for Walmart over Amazon, truly level-setting in terms of the innovation and insights we thought Amazon Go stores would spearhead. Walmart would immediately gain access to vital customer experience data that would allow it to continue iterating on an entirely new way of shopping -- all of this happening as Amazon fights to catch up in a few stores across the US, where the amount of data would pale in comparison.

What capabilities might the proposed partnership give Walmart when it comes to understanding its customers, serving them better, and offering more competitive prices?

While we aren't sure how exactly the various technologies come together and manifest within the shopping experience yet, it's safe to assume the mobile phone will play a huge role in enabling customers to bypass checkout. A direct gateway to the customers' wants, needs, interests, and, more importantly, location, leveraging mobile as a tool for self-service payments opens the door to huge opportunities for refining the entire customer journey with more relevant communication, products, promotions, and services.

If the partnership goes forward, what is retail going to look like in 10 years?

In-store experiences have needed to evolve with the rise of mobile and digital experiences for some time now. The problem with achieving that has historically been due to an over reliance on maintaining the status quo -- the mentality that if it's not broken, don't fix it, even though many of these systems have been broken or quite dated for some time.

But then Bezos came in and began disrupting all of these different markets, forcing every industry, including retail, to get innovating or fear the wrath of Amazon. And today, the fact that this partnership is set to pose a significant threat to Amazon means the next 10 years are destined to look completely different than what we picture now -- instead of scrolling through Facebook on our phones while we wait in line for a cashier to scan, bag, and charge us for our items, we'll be using them to check ourselves out and be on about our day.

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