Amazon is set to open a second location for its radical Amazon Go concept store.

The store, the second in Amazon's hometown of Seattle, will be a mile away from the original location, reports the Daily Mail.

Amazon confirmed the new store in a statement, saying "We are excited to bring Amazon Go to 920 5th Avenue in Seattle. The store will open in Fall 2018."

Since the system is tracking their purchases as they move around the store, customers simply leave when they're finished shopping, with Amazon billing the credit cards on file for any products its cameras identified.

Advertisement

Amazon Go, which is set to open stores in Chicago and San Francisco, has sent rivals scrambling to prepare for yet another disruption from the online retailer.

It comes after claims Microsoft is working on technology that would eliminate the need for cashiers and checkout lines in supermarkets.

Other rival stores have purportedly tested programs where customers scan and bag each item as they shop, with mixed results.

In the UK, Waitrose already allows customers to scan products customers to scan purchases as they pick them off the shelf.

However, they still need to pay at a till.

For Microsoft, becoming a strategic ally to retailers has resulted in big business.

In addition to developing retail technologies, it ranks second, behind only 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 US market for an automated checkout system is worth some US$50 billion ($73.9b).

Microsoft said it "does not comment on rumours or speculation".

Walmart and Amazon have declined to comment.

Amazon Go is also set to open stores in Chicago and San Francisco. Photo / AP
Amazon Go is also set to open stores in Chicago and San Francisco. Photo / AP

So far, Microsoft's attempt at developing the checkout-free supermarket has largely fallen under its Business AI (Artificial Intelligence) team, one source said.

A group consisting of 10 to 15 people have worked on a slew of retail store technologies, and they have presented their efforts to 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, they added.

Making its technology cheap enough so it does not shrink 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 Centre 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.

The secretive team 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 almost 14 months before opening 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 is "one that Amazon is uniquely positioned to solve."