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Microsoft Ups the Game in Retail Services With New Offerings

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Microsoft MSFT is focused on supporting retailers to keep up with the evolving demands of consumers amid ongoing digitization in the sector.

Recently, the company announced a slew of latest cloud retail services and product enhancements that will enable its retail clientele to boost sales. Notably, the company’s CEO, Satya Nadella, is set to deliver a keynote regarding the latest services at National Retail Federation (NRF) 2020 on Jan 12.

These services are expected to strengthen the company’s competitive position against peers like Amazon AMZN, CRM, Oracle ORCL, SAP, Adobe (especially after Magento acquisition) and others.

Strength in Retail Services Across Products

Microsoft has unveiled advanced retail offerings across Teams, Dynamics 365, Office 365 and Azure to boost customer base with advanced services and deliver engaging experience.

For instance, Azure Synapse Analytics aids retailers to analyze vast amount of data, apply ML and derive data-driven insights to enhance business processes.

Dynamics 365 Customer Insights provides a comprehensive view that enables retailers to enhance customer lifetime value and deliver customized services to boost engagement.

Moreover, services like Dynamics 365 Connected Store, is being utilized by Marks & Spencer to analyze data from smart devices that include IoT sensors and video cameras as well as offer useful insights in real time to improve decision making.

With an aim to aid retailers adopt ‘commerce anywhere’ (or aCommerce), Microsoft has upgraded Dynamics 365 Retail service as Dynamics 365 Commerce. The new multi-channel solution consolidates retailers’ back-office, call center, in-store and e-commerce business processes. This enhances customers’ experience as it provides unified shopping experience across all channels. Notably, Dynamics 365 Commerce is in preview and slated for general availability to the company’s retail customers on Feb 3.

Moreover, the latest Azure IoT Central Micro Fulfilment Center template aids retailers to optimize fulfilment processes to efficiently manage supply chain.

Microsoft PromoteIQ enables retailers with effective marketing capabilities that facilitates increase in digital sales. Management is elated that PromoteIQ helped Home Depot to witness double-digit growth in sales for promoted products.

AI-driven Microsoft Bing for Commerce solution is integrated with visual search innovation capabilities that offer seamless product search and personalized recommendations.

The company is also enhancing Microsoft Teams with more capabilities to boost workforce productivity.

Digitally Evolving Retail Sector Holds Promise

Microsoft is making every effort to improve retail portfolio to include more AI-engineered offerings. This is helping the company to aid its retail clientele that comprises Walmart, GAP, Kroger and Walgreens Boots Alliance, among others, to boost sales.

We believe that increased spending by retailers on digitally transforming their business processes will bolster adoption of the latest services focused on omni-channel strategy, supply chain and in-store mobility.

Also, integration of the company's in-house offerings is expected to expand retail clientele. This will likely generate incremental revenues in the days ahead.

For instance, apart from Azure, Walgreens Boots Alliance is reportedly set to utilize Microsoft 365, HoloLens 2 mixed reality glasses, among others, to enhance end-to-end business processes.

Expansion of utility of Microsoft’s offerings is instilling investors’ optimism in the stock, as evident from its robust price performance.

Notably, shares of Microsoft hit a 52-week high of $162.22 on Jan 9, closing marginally lower at $162.09. Notably, the company has a market capital of $1,236.55 billion.

The company’s shares have returned 58.8% in the past year compared with the industry’s growth of 43.8%. Meanwhile, the S&P 500 index has rallied 27.9% in the same timeframe.

Markedly, per ‘Global Unified Commerce Forecast’ report from 451 Research, digital commerce transactions are envisioned to witness a CAGR of more than 20% globally and reach $5.8 trillion in 2022.

Microsoft’s move to ramp up cloud-based retail services is in sync with the company’s strategy to capitalize on the digital commerce market.

Zacks Rank

Microsoft carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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