Outside a closed empty parking lot is a blue stand full of provisions including over-the-counter painkillers, caffeine-laden drinks and quick, easy snacks. It’s a convenient stop for those stocking up before a Hollywood Bowl show, for tourists strolling through the city to see the Hollywood Walk of Fame, or for locals needing some first aid to ease a splitting headache at 2 a.m.

Whoever the customer may be and at whatever time, they will see Barb and Peter “manning” the store, fulfilling orders and dispensing them into lockers that open to customers outside.

Barb and Peter are the two robots, created by the Pasadena-based robotic smart store VenHub and situated at the company’s Hollywood-based location. Unlike the conventional convenience store where shoppers are greeted by cashiers and can peruse store aisles for their items, VenHub’s retail locations operate as futuristic vending machines, where users pay for their goods via an app and receive them through an automatic door.

VenHub is part of a growing legion of unattended retail concepts, where stores operate more like self-service kiosks. They use robotics, artificial intelligence and autonomous technology to run operations remotely. Unattended retail is one of the many proposed solutions to fix problems with brick-and-mortar retail: the rising cost of labor, theft and crime, and thinning profit margins.

“We have smart cars, and we have smartphones; we have smart homes, but we don’t have smart retail,” said Shahan Ohanessian, the chief executive and co-founder of VenHub. “…It’s time for us to change the retail world.”

A rocky start

Retailers have tried for years to leverage technology to make the in-person shopping experience easier and cheaper, as part of an effort to shrink operating costs, with varying levels of success.

Retailers like CVS Health and Target Corporation that adopted self-checkout machines in 2014 have now been scaling back the technology. Target announced in 2024 it will limit self-checkout lanes to customers with less than 10 items at almost all of its stores. Todd Vasos, the chief executive at Dollar General Corporation, said in a fourth-quarter 2024 earnings call it will be returning to hiring cashiers and relying less on self-checkout technology.

In an effort to curb theft at self-checkout kiosks, the city of Long Beach unveiled a measure in June that would require retailers to better staff self-serve lanes. A similar measure failed in the California State legislature in 2024. According to the California Chamber of Commerce, that policy would have cost stores around $497 million a year.

“While it is important to consider the potential effects of new technologies on employees and consumers, overly burdensome regulations, such as those proposed in this bill, may stifle business growth, innovation, and competitiveness in an increasingly digital economy,” the state chamber said in a statement.

When Ohanessian launched VenHub, he and his team spent years at Amazon.com Inc. experimenting with ways to update the retail experience. They either worked on same-day delivery, making alcohol delivery more convenient, or avoiding long lines at the pharmacy by delivering prescriptions to the patient. The team also had a hand in the creation of Amazon Go stores, a convenience store experiment that allowed customers to grab what they needed without the hassle of having to pay for their items at a checkout line. Intuit Dome in Inglewood opened last year with a similar “contactless” arrangement for its concession areas.

But like the self-checkout experiment, Amazon’s Just Walk Out technology proved to have mixed results. The company began phasing it out at some of its stores. The technology that powers Just Walk Out tech still requires human beings to train and validate AI’s object recognition data, rendering its play as a low-cost autonomous option useless. Similarly, the automated checkout technology company Grabango shut down in 2024, after being deployed in the likes of Aldi, 7-Eleven Inc. and Circle K.

“One of the barriers is that the investment cost of these robotics is very high and these industries are very low margin,” said Joe O’Donnell, the board chair of the California Restaurant Association.

Forging a new path

Global trends in automated retail technology reached its peak in 2023, when the sector raised more than $517 million in funding, only to tumble to $99.47 million a year later, according to PitchBook. But while the U.S. is still finding its footing when it comes to automated retail experiences, Asia has largely embraced the trend – in 2024, Asia dominated funding in the space, taking part in 82% of global deals in the sector.

VenHub’s pre-orders for the smart-store kiosk have exceeded $400 million in value. Hollywood is VenHub’s fourth location in Los Angeles. They also have sites in Glendale, North Hollywood and the new L.A. Metro Transit Center that will connect to Los Angeles International Airport.

Prospective customers for the company include retailers in major cities that cite theft and cost as a reason for wanting to work with them, but there is also a smattering of other use cases. One example is a small community in East Texas, with about 200 residents who don’t want to drive miles away to pick up sundries. There is also a gated community in Connecticut of parents who want a safe and walkable option for their children.

“There are smart cities being built, there are smart buildings being built and smart communities being built, but there’s no smart retail behind it,” Ohanessian said. “A lot of the large property developers are looking for a way to provide safety, security and convenience for their tenants or property owners and this is a solution for them.”

As labor costs continue to rise and stores operate on thinner profit margins, companies are still experimenting with ways to boost volume and speed without the need to hire more workers. Santa Monica-based Robomart’s smart stores use driverless, on-the-road vehicles stocked with corner store provisions that approach the customer and allow them to buy what they need, all without interacting with a worker. Downtown-based Rotender, which makes simple mixed drinks, has set up shop in multiple bars, arenas and casinos.

Similarly, Ohanessian sees VenHub expanding. He hopes to open mobile locations at music festivals, selling concert t-shirts for artists on tour and expanding the use cases of its robotic technology.

“I think the solution that we have today is the early stage of retail,” Ohanessian said. “Our vision is not only to grow the retail side of the convenience store, but also prescription, smart pharmacies, smart lockers, smart stores.”