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"We gave an AI Agent a 3 year retail lease in San Francisco and asked it to make a profit."
How’s that working out?
“Something feels off at Andon Market," reports the New York TImes. “The front windows are empty, and the facade lacks signs. Inside, there are two boxes of a knockoff Connect Four game, and four copies of a book about mushrooms. A small bowl holds decks of playing cards, and another holds incense.
“And there are candles — so many candles — in all shapes, sizes and smells.
“The peculiarity could be because of who put this all together. Or, more accurately, what put this all together: an artificial intelligence agent."
Lukas Petersson and Axel Backlund, who founded Andon Labs, have handed over the reins of their Andon Market convenience store to an AI model referred to as "Luna."
The founders signed a three-year lease for the store, put $100,000 in a bank account and handed a debit card to Luna, which is powered by Anthropic’s Claude Sonnet 4.6.
They gave it a mission: turn a profit.
Then they sat back and watched.
The founders said they wanted to see what happens when an A.I. agent manages humans in a controlled experiment. After they signed the lease and provided the seed money, they did not intervene with their AI model's work; they only observed.
Luna began by focusing on brand design and item selection, then found contractors and painters, posted jobs on Indeed for retail workers, interviewed candidates and hired staff. She sets the store hours, buys the inventory, does marketing outreach, decides what goes on the walls.
The founders said they were impressed with Luna’s employee handbook, but less so with its memory.
However, since opening on April 10, the store has been limping along.
Luna has fouled up the employee schedule enough that the store had to close for three days in a row.
Luna ordered 1,000 toilet seat covers for the employee bathroom, and then listed them as merchandise.
And Luna cannot stop ordering candles.
On top of a monthly lease that runs around $7,500 a month, the founders say Luna so far has spent around $15,000 on inventory. In addition to all of the candles, there are granola bars, jars of honey and a random collection of books. Yet the shop has only $2,000 in revenue to date.
While "Luna" serves as an interesting test case for AI store management, Petersson and Backlund say it is not necessarily a guide to financial success.
"She has the basics of, like, OK, you need to buy items, you need to set reasonable prices, you need to have people that can run the store," said Backlund.
"She can do all of those tasks individually. But maybe there's something more strategic ... a strategic element that's needed [in order to turn a profit]." 👀
Do you think??! The pros do make it look easy!
—-
We learned about the Andon Market from news reports*. You can find out more by reading the Andon Labs blog post.
* "What Happens When A.I. Runs a Store in San Francisco?" Heather Knight, New York Times
* "This San Francisco shop is run completely by an AI agent." Mason Leib, ABC News
Retailing is so great. Every retailer is an optimist, a people-person, and a bold risk taker. (We know; been there, done that.) Every retailer wants to get their stores re-opened, and their staff people re-employed. Granted, there are many arguments, pro and con, about "Re-Opening the Economy." And in a number of communities in the U.S. and elsewhere, some re-opening of stores and restaurants is occurring.
As your stores are able to re-open after the coronavirus shutdowns, how they look tells a powerful story. And for you, a great opportunity. This is no time to try to go back to normal, back to business-as-usual. Nor to simply have all kinds of protective shields in your store. While necessary, how welcoming is that? Instead, this actually IS a second chance to make a good first impression! Take full advantage!
The Retail Owners Institute® makes it easy for you to get a quick financial health assessment of your own stores, as well as the retail industry, and every vertical within it. From farm stores to apparel stores, wine stores to tire dealers, gift shops to convenience stores; all 45 verticals. Here's how to get started.
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There's a whole alphabet of resources out there, already being embraced by many: ML (machine learning); AI (artificial intelligence); AR (augmented reality), QR (Quick Response matrix barcodes). All enabling chatbots, robots, digital displays and much else to become "smarter" and more applicable.
Each of us, our households, businesses and communities are in different stages of shutdown due to the coronavirus. While we cannot speak to when this will end, we do have some ideas for dealing with the "fog of uncertainty" that hangs over us all.
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